forgiveness granted by US Department of Agriculture (USDA), the U.S. Department of Housing and Urban Development (HUD) and federal housing administration (FHA) will soon be terminated due to financial difficulties related to the pandemic, according to an announcement on Tuesday.
Thank you for reading this post, don't forget to subscribe!As per the announcement, it is now expected to end on May 31.
The extension comes after the White House’s decision to end the presidentially declared emergency for the COVID-19 pandemic that has been in force for more than three years. On Monday, President Joe Biden signed a resolution advancing several weeks the state of emergency that was due to expire on May 11.
In its announcement about the policy, the USDA said, “As the national emergency may end earlier than originally expected, the USDA has determined that a short period beyond the end of the COVID-19 national emergency USDA It will be beneficial for both borrowers and service providers. “The USDA is extending the date by which a servicer may approve a borrower’s request for an early COVID-19 forbearance.”
On April 7, HUD and the FHA issued a similar policy with the publication of Mortgage Letter 2023-08, which extends the COVID-19 forbearance and home equity conversion mortgage (HECM) extension deadlines to May 31.
The bond letter language was also similar to the language used in the USDA announcement, which stated:
“As the national emergency may end earlier than originally expected, HUD determined that a shorter period beyond the expiration of the COVID-19 presidentially declared national emergency would be beneficial to both FHA borrowers and mortgagees. The purpose of this extension is to provide sufficient time for affected borrowers to request a COVID-19 Forbearance or HECM extension, and for mortgagors to submit and process these requests.
According to HUD, many of the pandemic-related relief provisions imposed by the federal government have already been phased out, but some housing relief elements have been extended for the benefit of borrowers and mortgagors.
In the mortgage letter, HUD specifies that any COVID-19 moratorium period cannot extend beyond November 30, 2023. USDA also advises servicers to explore other options for borrowers after the moratorium expires.
