This bill allows homeowners with federally backed mortgages who have property damage from a declared disaster to request a forbearance on their mortgage payments for up to 360 days, during which time no fees, penalties, or interest will accrue.
Judy Chu
Representative
CA-28
The "Mortgage Relief for Disaster Survivors Act" allows homeowners with federally backed mortgages who have property damage from a declared disaster to request a forbearance on their mortgage for up to 180 days, with a possible extension of another 180 days. During this forbearance period, no fees, penalties, or interest will accrue. Borrowers must submit a written request and documentation of damage to their loan servicer to qualify. This act aims to provide financial relief to disaster survivors by temporarily suspending mortgage payments.
New Bill Offers Up to 360-Day Mortgage Pause for Disaster Survivors with Federal Loans
This proposed legislation, the 'Mortgage Relief for Disaster Survivors Act,' aims to give homeowners and property owners a crucial financial breather after a major disaster. If your property gets damaged in an area officially declared a disaster under the Stafford Act, and you have a specific type of mortgage loan, this bill lets you request a pause on your payments.
Hitting Pause When Disaster Strikes
Here’s the core idea: If you're eligible, you can ask your loan servicer in writing for a 'forbearance' – basically, a temporary stop on payments. You'll need to provide proof that your property suffered 'verifiable damage or destruction.' Once approved, your payments are paused for 180 days. Importantly, during this time, the bill states no fees, penalties, or extra interest can be added to your account, regardless of whether you were already behind on payments (Section 2).
Need more time? The bill allows borrowers to request one extension for another 180 days, potentially giving up to a full year of payment relief. You can also choose to end the forbearance early if you get back on your feet sooner.
The Nitty-Gritty: Who Qualifies and What Loans Count
This relief isn't for every mortgage. It specifically applies to 'Federally backed' loans (Section 3). What does that mean? We're talking about loans for 1-to-4-family homes or larger 5+ unit residential properties that are bought or guaranteed by Fannie Mae or Freddie Mac. If your loan isn't connected to Fannie or Freddie, this particular bill wouldn't apply.
The relief period, called the 'covered period,' lasts as long as the official disaster declaration is active. The process kicks off when a disaster is declared by the President under the Stafford Act, which is the standard way major disasters get federal recognition and aid. While the bill provides a clear path to relief, borrowers will need to ensure they have and can submit the required documentation proving damage to their loan servicer to access this pause.