Dear Tatianna,

A forbearance plan allows homeowners experiencing a financial hardship due to COVID-19 to temporarily reduce or suspend mortgage payments while they regain their financial footing.

If you are on a COVID-19 forbearance plan, you will have to repay all of the unpaid amount; however, you don't have to repay it all at once unless you are able to do so. Your mortgage servicer will contact you 30 days prior to the end of the forbearance plan period to discuss your situation and possible repayment options. These options may also be available to you if you are not on a COVID-19 forbearance plan but have missed payments as a result of a financial hardship related to COVID-19.

Options after resolving a COVID-19 hardship include:

Option 1: Reinstatement

In this option, you pay back the missed amounts all at once, if you are financially able to do so. You then resume your monthly mortgage payments under the original terms of your mortgage loan.

Option 2: Repayment

With a repayment plan, you pay a portion of the missed amounts with your existing monthly mortgage payment for a set period of time, up to 12 months. Your monthly payments will be higher during the repayment plan because you are making monthly repayment plan payments together with your regular monthly mortgage payments. After completing the repayment plan, you will make your regular monthly mortgage payments under the original terms of your mortgage loan.

Option 3: COVID-19 Payment Deferral

If you are able to resume your regular monthly mortgage payments but are not able to afford Option 1 or Option 2 above, you may be eligible for a COVID-19 payment deferral that would allow you to repay your missed payments on the maturity date of the loan, or earlier when you either pay off or refinance your mortgage loan, or sell your home, whichever comes first. You will not be charged interest on missed payments.

Option 4: Loan Modification

If your hardship is permanent and you are no longer able to afford your regular monthly mortgage payments, your mortgage servicer may discuss a loan modification with you. With a loan modification, you would make several monthly payments under a trial period plan. After completion of the trial period plan, all unpaid amounts are added to the balance of the mortgage loan, and monthly mortgage payments are permanently modified to what may be a lower amount through a rate reduction and a term extension to 40 years (480 payments) from the effective date of the modification. You may pay more total interest because the loan is extended over a new 40-year term.

If at the end of your COVID-19 forbearance period you're still experiencing a financial hardship due to COVID-19, you may be able to extend the forbearance plan.

As a reminder, call your mortgage servicer to see what options may be available to you.

For more information, visit fanniemae.com/heretohelp/kyo and keep an eye out for more helpful information tomorrow.