Disaster Mortgage Relief Bill Guarantees 360-Day Payment Pause for Federally Backed Loans

The new Mortgage Relief for Disaster Survivors Act is designed to give homeowners a critical financial lifeline when disaster strikes. Simply put, if your home is in a federally declared disaster area and you have a federally backed mortgage, this bill guarantees you can pause your payments for up to a year, starting with disasters declared on or after January 1, 2025.

The Immediate Safety Net: Guaranteed Forbearance

This is the core of the bill (SEC. 3). If you have a “covered mortgage loan”—meaning it’s insured or guaranteed by agencies like the FHA, VA, USDA, or owned by Fannie Mae or Freddie Mac—you get a powerful new right. If a disaster hits your area, you can contact your loan servicer and simply confirm that you are experiencing financial hardship because of the disaster. That’s it. You don’t need to prove lost income or submit a mountain of paperwork upfront.

Crucially, the servicer must grant you an initial 180-day forbearance right away. You can then ask for an extension of another 180 days, bringing the total potential payment pause to 360 days. Think of it this way: if you’re a contractor whose tools were destroyed in a flood, or a retail worker whose store was shut down by a hurricane, this provides an entire year of breathing room to rebuild your income and your home before worrying about the next mortgage check.

The Best Part: No Hidden Costs

One of the biggest headaches with existing forbearance programs is the fine print about fees and interest. This bill cuts through that noise. During the entire forbearance period granted under this Act, you will not be charged any extra fees, penalties, or interest on your loan account (SEC. 3). This is a huge protection. It means your loan balance won't balloon out of control while you are trying to recover.

What’s more, the bill is clear that you can request this relief even if you were already behind on your payments before the disaster hit. This is important because many people living in vulnerable areas might already be struggling financially. The disaster relief is separate from any pre-existing delinquency.

Who Pays the Tab?

While this is excellent news for homeowners, it shifts the immediate financial burden. When a payment is paused, the loan servicer (the company that collects your payment) still has to manage the loan without that cash flow. Because the bill mandates that no extra interest or fees can be charged to the borrower, the cost of this deferred payment is ultimately borne by the servicer or the federal entity that backs the loan. For servicers, this means a sudden, mandatory increase in administrative work and a temporary halt in revenue stream, which could be a challenging operational lift when thousands of people request forbearance simultaneously.

The Fine Print on Eligibility

The bill is very specific about who qualifies (SEC. 2). It covers federally backed mortgages on properties from single-family homes up to large apartment buildings (5+ families). It also clearly defines a “disaster” as a major declaration by the President under the Stafford Act, or even a declaration by a State Governor or Tribal government leader. This broad definition is good news, as it covers more localized, but still devastating, events that might not always reach the full Presidential declaration level. Just remember, this relief is only for disasters declared on or after January 1, 2025—so it’s future-looking protection.