The Biden administration on Friday unveiled plans to expand aid for homeowners with government-backed mortgages, an effort to stave off a wave of foreclosures for Americans who fell behind on payments during the coronavirus pandemic.
The White House announced the new assistance as other pandemic relief programs for homeowners are set to expire: A federal ban on foreclosures will lapse on July 31, while a similar program that granted a reprieve to individuals with mortgages backed by Fannie Mae and Freddie Mac ends on Sept. 30.
The latest steps are intended to allow homeowners who lost their income as a result of the pandemic to extend their monthly government-backed mortgage with lower payments, according to a White House fact sheet.
The three government agencies that back mortgages – the Departments of Housing and Urban Development, Veterans Affairs and Agriculture – will provide homeowners with a roughly 25% reduction in monthly principal and interest payments. The move is designed to bring the options available to homeowners with government-backed mortgages in line with what’s offered to homeowners with mortgages backed by Fannie and Freddie.
