PURPOSE
The purpose of this notice is to provide relief to and guidance for Single Family Housing Guaranteed Loan Program (SFHGLP) borrowers impacted by the COVID-19 pandemic.
Moratorium on Foreclosures and Evictions
The U.S. Department of Agriculture (USDA) Rural Development is extending its moratorium on foreclosures and evictions through June 30, 2021 for SFHGLP properties. After the moratorium ends, if the lender decides to proceed with foreclosure, the time for initiating or continuing foreclosure proceedings is extended from 90 days (as specified in 7 CFR 3555.307(a)) to 180 days. The moratorium does not apply in cases where the servicer has documented the property is vacant or abandoned.
Forbearance Policy
For borrowers who request an initial forbearance on or before June 30, 2021, lenders are expected to grant payment forbearance based on a borrower’s attestation (verbal or written) to financial hardship caused by the COVID-19 emergency. The initial forbearance period may be up to 180 days and the borrower may request an extension of up to an additional 180 days.
Borrowers who received an initial CARES Act forbearance before June 30, 2020, may be granted up to two additional three-month payment forbearances. The borrower must request each extension individually.
The term of the initial forbearance and any extension may be shortened at the borrower’s request.
Fees, penalties, or interest (beyond the amounts calculated as if the borrower had made all contractual payments in a timely fashion) should not accrue during the forbearance.
Upon completion of the forbearance the lender should communicate with the borrower and determine if they are able to resume making regular contractual payments. If so, the lender may offer the borrower either a written re-payment plan to resolve any amount due or at the borrower’s request, evaluate the borrower for one of the three options outlined in Chapter 18.15 of the Handbook-1-3555.
