Foreclosures must be halted for at least 60 days if a borrower applied for assistance from the Homeowner Assistance Fund.

Borrowers with Fannie Mae or Freddie Mac-backed mortgages have been granted an additional two months to avoid foreclosure if they’ve applied for assistance from the Department of the Treasury.

An announcement by the Federal Housing Finance Agency on Wednesday notified servicers that they must halt foreclosure activities for up to 60 days if a borrower with a GSE-backed mortgage applied for assistance from the Treasury’s Homeowner Assistance Fund (HAF).

Under the American Rescue Plan Act of 2021, HAF provides close to $9.96 billion in financial relief for homeowners, with at least 60% of the funds being targeted to lower-income homeowners. This money is allocated to states, territories, and tribal entities and then distributed to homeowners to address housing-related costs.

Sandra Thompson, the acting director of FHFA, said in a statement that giving borrowers extra time to apply for financial relief is one of the ways that the agency is supporting sustainable homeownership.

“Today’s action will provide borrowers who need temporary mortgage assistance with additional time to be evaluated for relief through their state’s approved Homeownership Assistance Fund,” she said.

The Treasury funds can be used for mortgage payment assistance, mortgage principal or interest rate reductions. Homeowners can also use the funds to pay for flood or mortgage insurance, homeowner’s association expenses, or broadband internet.

Source: housingwire