On December 23rd, the Federal Housing Finance Agency (FHFA) announced that it will extend COVID-19 forbearance plans for qualifying borrowers of Fannie Mae and Freddie Mac mortgage loans. The forbearance plans, announced earlier this year, were set to expire at the end of 2020. Following the extension, forbearance plans will continue for qualifying borrowers through March 31st, 2021, and all foreclosures on FHFA regulated properties will be halted until January 31st, 2021.
What does this mean for borrowers facing financial hardship due to the pandemic? First, these plans, like all other forbearance plans, work to ensure that financial hardship does not compound upon itself. By delaying payments, suspending foreclosures, and removing late fees, these plans alleviate significant financial pressures. They not only provide borrowers with the extra time necessary to recover funds for delayed mortgage payments, but also free up personal funds for necessary expenses. In its announcement, the FHFA recognized COVID’s “disproportionate impact on renters” as a potentially devastating financial burden on families working to make ends meet.  Through forbearance, FHFA is attempting to mitigate these burdens for those most affected by the pandemic.
As such–and considering the fact that the virus is still very much in effect–the extension of these plans is no surprise. Through the first quarter of 2021, forbearance on mortgage payments will apply to qualifying families who have demonstrated a financial hardship due to COVID-19. Alongside lowering or pausing monthly mortgage payments, the forbearance plans also come with certain protections. Homeowners who are to be foreclosed upon must be given at least a 30 day notice to vacate. Further, homeowners cannot incur payment-related penalties. Lastly, homeowners will be able to negotiate gradual repayment schemes and will not have to make a lump sum payment at the end of their plan. Property owners must inform homeowners of these protections once they are put into effect.
In a similar vein, the Federal Housing Administration (FHA) announced an extension of the deadline to request a forbearance option for FHA, previously set to expire on December 31st. The new deadline is set for February 28, 2021, barring further extension. What this means is that forbearance–and the concomitant protections–can last through all of next year and even into early 2022, as plans include the option of a six month extension. 
Generally, we are seeing the housing market adapt to COVID-19 by supporting renters, landlords and homeowners. By offering plans which seek to mitigate the possibility of mass eviction, foreclosure, or loan defaults, the FHFA and FHA are attempting to preserve critical financial relationships. Ultimately, this works to the benefit of all of us, stabilizing a key sector of today’s uncertain economy. In the likely scenario of widespread vaccination being underway by the new forbearance deadline, this will be the final extension for COVID-19 forbearance plans.
 – “FHFA Extends COVID-19 Multifamily Forbearance through March 31, 2021,” Federal Housing Finance Agency, 23 Dec. 2020. Available at: https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Extends-COVID-19-Multifamily-Forbearance-through-March-31-2021.aspx. Accessed 30 Dec. 2020.
 – Kleimann, James, “FHFA extends multifamily forbearance through March 31,” Housing Wire, 30 Dec. 2020. Available at: https://www.housingwire.com/articles/fhfa-extends-multifamily-forbearance-through-march-31/. Accessed 30 Dec. 2020.