The need to reduce mortgage payments to make ends meet during the COVID-19 crisis is real and necessary for many people. This arrangement made with your lender/ loan servicer, called forbearance, is temporary and you must pay the money back in the future.

For many lenders/ servicers the issue of forbearance is being dealt with on an individual case by case basis. It is important that you contact your lender/ servicer of your loan to find out what they are doing for individuals who need payment relief through forbearance.

Many people are worried that if they enter into forbearance, they will be obligated to pay a large lump sum of money at the end of the forbearance period. Both Fannie Mae and Freddie Mac have stated explicitly that you are never required to make a lump sum payment at the end of forbearance. There are many options for post forbearance payment plans, that depend upon your personal situation. Here are brief descriptions of them from Fannie Mae and Freddie Mac:

• Full repayment, known as reinstatement, where you pay back the missed payments and quickly get back on track.

• A repayment plan, which allows borrowers to catch up gradually in addition to paying regular monthly payments.

• Payment Deferral or modification of the loan, to keep monthly payments consistent and add the borrower’s missed payments to the end of the mortgage.

• Modification of the loan, to reduce a borrower’s original monthly payment amount.

For more information on forbearance, including what happens during each step of the process, see this PDF from Freddie Mac.

Many renters are also fearful of being asked to pay a lump sum of back owed rent. There are stated protections in the Washington State Eviction Moratorium stating that landlords must provide a reasonable repayment plan based on the renter's circumstance. 

For more housing resources during COVID-19 be sure to visit our webpage.