SFH Guaranteed Servicing
July 23, 2021
New COVID-19 Special Relief Measures and Existing Guidance for Servicing Impacted Borrowers
The purpose of this announcement is to provide an advance notice of Handbook updates with new COVID-19 Special Relief Alternatives and to clarify existing policies.
ADVANCE COPY NOTICE: HB-1-3555, Chapter 18 Section 5
Section 5 of Chapter 18 of the technical Handbook-1-3555 will be expanded to included COVID-19 Special Relief Alternatives. An advance copy is available for review on the USDA LINC Training and Resource Library. The COVID-19 Special Relief Alternatives include an option that target a 20% reduction in the borrower’s monthly principal and interest payments by offering a combination of interest rate reduction, term extension and mortgage recovery advance. The COVID-19 Special Relief Alternatives are immediately available and will remain in effect until December 31, 2022. To qualify, the borrower must occupy the property; was not greater than 120 days past due on March 1, 2020; and, received an initial forbearance due to a COVID-19 related hardship prior to September 30, 2021.
COVID-19 Public Health Emergency:
To provide relief to impacted borrowers, a moratorium on foreclosures and evictions is effective through July 31, 2021 and servicers are authorized to approve initial payment forbearances upon request through September 30, 2021. Servicers are expected to grant payment forbearance based on a borrower’s verbal or written attestation to financial hardship caused by the COVID-19 National Emergency. Eligibility for COVID-19 Forbearances are outlined below.
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Initial Forbearance Date
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Initial Forbearance Period
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Additional Forbearance Period
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Forbearance Extensions
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Maximum Forbearance Period
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March 1, 2020 – June 30, 2020
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Up to 6 months
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Up to 6 months
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Up to 6 months (in 3-month increments)
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Up to 18 months
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July 1, 2020 – Sept 30, 2020
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Up to 6 months
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Up to 6 months
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Up to 3 months
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Up to 15 months
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Oct. 1, 2020 – Sept 30, 2021
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Up to 6 months
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Up to 6 months
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0
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Up to 12 months
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In addition to USDA relief measures, Borrowers should be aware the American Rescue Plan Act of 2021 has established the Homeowner Assistance Fund (HAF) to provide financial assistance to eligible homeowners who have suffered financial hardships during the COVID-19 emergency. Qualified expenses may include mortgage payment assistance, mortgage reinstatement, utilities, insurance, and other housing related costs. Additional information on the HAF is available at treasury.gov. Borrowers are encouraged to explore these resources.
Questions regarding program policy and this guidance may be directed to the National Office Division at sfhglpServicing@usda.gov or (202) 720-1452.
Thank you for your support of the Single-Family Housing Guaranteed Loan Program.
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