A provision of the CARES Act lets homeowners get a forbearance on their mortgage payments for up to 12 months.

As coronavirus continues to spread across the country, millions of people have lost their jobs and are trying to get by on less. If you’re having trouble making your mortgage payment, a provision in the CARES Act or The Coronavirus Aid, Relief, and Economic Security Act, may allow you to forego making payments for up to one year. The law also halts any foreclosure sales and evictions already in progress.

How Do I Know If I Qualify?

Only loans backed by Fannie Mae, Freddie Mac, VA, FHA, and USDA qualify under the CARES Act. If your loan isn’t backed by one of these agencies, your lender may still be able to work with you. How do I know who backs my mortgage? That information could be on your mortgage statement or you can call your loan servicer to find out. If you can’t get through to your mortgage servicer, Fannie Mae and Freddie Mac have links on where you can input your information and find out.

How Does it Work?

It is important that you don’t stop making payments without informing your mortgage company. You will need to call and notify the company that you are having trouble making your payments due to illness, job loss, etc. You can ask for an initial 90-day or six-month forbearance, which can be extended for another six months, up until one year. You will also need to negotiate a plan to pay off the forbearance in the future. Some lenders may ask for a balloon payment or will tack the payments on to the end of your loan. Make sure you get any and all agreements relating to your forbearance in writing. If the servicer is not willing to work with you, request the name of the party that holds your mortgage. The servicer must give you the name of the owner within 10 days.

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Will It Affect My Credit?

The CARES Act says mortgage holders will not incur late fees on payments that are in forbearance and these missed payments should not be submitted to the credit bureaus. However, if you end up getting a loan modification, that could affect your credit. According to Experian, anything other than paid on time and in full will have a negative impact. For instance, if you had six months worth of payments in forbearance and your lender agreed to accept half of the full amount, it would appear that you paid less than you originally agreed when you took out the mortgage. That could cause a drop in your credit score.

What If I Don’t Have a Government-Backed Mortgage?

If your mortgage doesn’t fit under the programs described in the CARES Act, you should still contact your loan servicer. Let them know you are having trouble making your payments, and they may still be willing to grant you a forbearance or work with you on due dates and late fees.