The COVID-19 pandemic has hurt our economy and the well-being of our country tremendously. July 2021 the administration announced that there will be new loan modification options for those who have government-backed home loans. Biden’s administration wants to give borrowers the opportunity to catch up or keep paying their mortgage payments due to the struggles the pandemic has caused.
The Federal Housing Administration (FHA) insured mortgages will be eligible to receive up to a 25% reduction on their principal and interest. You do have to be impacted by COVID-19 in order to receive help. In exchange, borrowers will have the life of their loan extended in order to be able to make lower monthly payments.
Those who have a loan back from the Department of Agriculture will receive up to a 20% reduction on their principal and interest. Ways borrowers can do this is to have an interest rate reduction, term extension and a mortgage recovery advance. Again, borrowers will need to be reviewed to make sure they qualify.
For VA loans there is a new COVID-19 Refund Modification which will have many tools that can help borrowers to obtain up to a 20% savings on their monthly principal and interest.
If you are in the market for a home, now is a good time to purchase. Find a professional Realtor in your area. For more information on any relief, assistance visit consumerfinance.gov/housing.