The outgoing Biden administration has made temporary mortgage relief efforts adopted during the Covid crisis “permanent” for homeowners struggling to pay Federal Housing Administration (FHA) loans.
The options intend to give mortgage services the flexibility to help homeowners to stay in their homes, the U.S. Department of Housing and Urban Development (HUD) announced on Thursday.
The measures “have proven to be effective in helping struggling homeowners avoid foreclosure and reduce losses,” FHA Commissioner Julia Gordan said.
The permanent updates are effective on Feb. 2, 2026, HUD said. Temporary provisions adopted during the Covid pandemic will remain in effect until then.
Mortgage servicers may offer a repayment plan or temporarily pause or reduce the mortgage payments for up to a year.
Servicers will make programs available to struggling borrowers to prevent foreclosures, such as modifying the loan to reduce the monthly payments.
When a borrower can’t pay the mortgage after exhausting all other options and the home appears destined for foreclosure, servicers will offer the options of a pre-closure sale or deed-in-lieu of trust foreclosure.
Borrowers affected by natural disasters, such as the fires raging around Los Angeles, have additional flexibility to stop or reduce their mortgage payments temporarily, HUD noted.
See here for more details about the updates.
