Washington D.C. – The National Housing Conference (NHC) applauds Federal Housing Finance Agency (FHFA) Director Sandra L. Thompson for the permanent adoption of enhanced payment deferrals for borrowers facing temporary financial hardships.
“The enhanced payment deferral policy will provide critical relief for borrowers facing financial hardships outside of their control, allowing them to keep their homes and avoid foreclosure. It will reduce foreclosures, strengthen sustainable homeownership, and stabilize many at-risk neighborhoods,” said David M. Dworkin, NHC’s President and CEO.
Under the enhanced payment deferral policies, eligible borrowers facing financial hardship with loans guaranteed by Fannie Mae and Freddie Mac (the Enterprises) will be able to defer up to six months of mortgage payments. The deferred payments will be moved to the end of the loan as a non-interest bearing balance. This approach was adopted during the pandemic at the urging of NHC and other housing advocates. It proved successful in avoiding thousands of foreclosures, prompting FHFA and the Enterprises to make it a key part of their standard loss mitigation toolkit.
The Enterprises will work with mortgage servicers to implement the enhanced payment deferral policies, with a voluntary adoption date of July 1, 2023, and mandatory adoption by October 1, 2023. Borrowers facing financial hardship are encouraged to contact their servicer to discuss whether this solution is appropriate for their unique circumstances.