12.3.6.4.3 COVID-19 Owner-Occupant Loan Modification

Borrowers who cannot afford their current payments are evaluated for the COVID-19 Owner-Occupant Loan Modification. Under this option, the borrower’s arrears are capitalized into the unpaid principal balance, the term is extended to 360 months (unless the borrower requests a shorter term), and the interest rate is set at the current fixed market rate as defined by HUD.⁸⁸ The borrower does not submit financial information for approval, but instead “indicates they have the ability to make the modified Mortgage Payment.” Under this option, the payment is only allowed to increase for eligible borrowers if there is no available partial claim.