HUD aids 34K Puerto Rico homeowners stay in their properties
U.S. Department of Housing and Urban Development (HUD) Secretary Marcia L. Fudge announced that through Federal Housing Administration (FHA) programs, some 35,500 homeowners with FHA mortgages in Puerto Rico were able to stay in their homes from the beginning of the COVID-19 pandemic in March 2020 through December 2022
In the last two years, FHA has helped some 1.8 million mortgage holders enter into an agreement with their mortgage servicer to have their mortgage payments paused or reduced (forbearance) due to COVID-19.
Additionally, 1.2 million — most of whom obtained this help after a forbearance — were able to resume payments and put any arrearages at the end of their mortgage or obtain a loan modification that reduced their payment to avoid foreclosure.
In Puerto Rico, 23,100 homeowners received assistance through forbearance, and 14,400 received Home Retention support, the agency noted.
During this period amid the pandemic, FHA borrowers whose ability to make their mortgage payments was impaired by the pandemic were able to obtain either a COVID-19 forbearance or a more permanent solution such as a loan modification that allowed them to avoid foreclosure.
Based on the effectiveness of these options, FHA announced last week that their COVID-19 toolkit has been extended to help all eligible borrowers who are struggling to avoid foreclosure, regardless of the reason for their hardship. These tools will be available for at least the next 18 months.
“Although the pandemic has ended, the economic effects will remain a challenge for the foreseeable future,” said HUD Secretary Marcia L. Fudge. “These impactful and effective foreclosure prevention tools will help struggling borrowers find the right option to help them get back on their feet and keep them in their homes. These tools have been so successful already, which is why FHA worked to enhance them further and include more borrowers.”
Included in these new enhancements are updates that also increase the limit on the number of interest-free arrearages that borrowers can pay at the end of their mortgage term to help maximize the number of borrowers able to retain their homes despite higher interest rates. The mandatory effective date of the changes is April 30, 2023, but mortgage servicers may begin offering these options to borrowers immediately.