22.214.171.124 USDA Forbearance
USDA direct and guaranteed loans are eligible for CARES Act forbearance. With respect to guaranteed loans, the USDA essentially restates the provisions of the CARES Act. According to the USDA, “[u]pon completion of the forbearance, the lender shall communicate with the borrower and determine if the borrower is able to resume making regular contractual payments.”124 Consistent with FHA policy stated above, initial forbearances must be approved by June 30, 2021. Advocates should monitor for further updates due to the changing administration.
USDA has provided extended forbearance to guaranteed borrowers who started their plans by June 30, 2020, and who still need forbearance to manage pandemic related hardships.125 Borrowers meeting these requirements may receive an addition six months of forbearance beyond the twelve months already accessible. The six months of additional forbearance must be provided in three month increments.
For direct loans, the USDA’s guidance refers to CARES Act forbearance as moratorium assistance and states that it can be requested verbally. It recognizes though that borrowers could still receive a standard moratorium even after the CARES Act protections have ended. “At the end of the 1-year time period, these 502 Direct borrowers can request the moratorium be extended up to an additional year making it a total of 2 years. However, the borrower must submit a moratorium application and meet eligibility criteria to be granted that last year.”126
125 USDA, Press Release, Biden Administration Announces Another Foreclosure Moratorium and Mortgage Forbearance Deadline Extension That Will Bring Relief to Rural Residents, Release No. 0026-21 (Feb. 16, 2021); Federal Housing Finance Agency, News Release, FHFA Extends COVID-19 Forbearance Period and Foreclosure and REO Eviction Moratoriums (Feb. 25, 2021).