The Federal Housing Finance Agency (FHFA) announced the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac will enhance their payment deferral policies to allow borrowers facing financial hardship to defer up to six months of mortgage payments.
Payment deferral allows borrowers who are able to resolve a financial hardship to keep the same monthly mortgage payment by moving past-due amounts to the end of the loan as a non-interest-bearing balance, due and payable at maturity, sale, refinance, or payoff. The GSEs’ payment deferral policies were expanded during the pandemic to allow borrowers with Covid-related hardships to utilize this solution.
Based on the success of Covid-era payment deferral, FHFA and the GSEs updated the standard payment deferral policies available to borrowers experiencing other eligible hardships. According to the FHFA, the enhanced payment deferral policies will promote sustainable homeownership while reaffirming the safety and soundness of the GSEs.
“The Enterprises completed more than one million COVID-19 payment deferrals during the pandemic, helping borrowers nationwide to stay in their homes,” said FHFA Director Sandra L. Thompson. “Based on the success of the COVID-19 payment deferral, we are making this solution a key part of our standard loss mitigation toolkit that is available to all borrowers with eligible hardships.”