Can You Defer a Mortgage Payment? Hardship, Repayment, and Credit

Yes, you can defer a mortgage payment, but only with your servicer’s agreement through a formal arrangement called forbearance or a payment deferral. Skipping a payment on your own is a delinquency; a servicer-approved pause is not. The missed amount doesn’t vanish either way. It gets repaid later through one of several structured options, and interest keeps accruing on your balance while payments are paused.¹

Contact Your Servicer Before You Miss a Payment

Call your loan servicer as soon as you know a payment is at risk. Waiting until you’re already two or three months behind narrows your options and can damage your credit before any agreement is in place. Most servicers accept requests through an online portal, by phone, or by mail. If you send anything by mail, use certified delivery with a return receipt so you can prove when it arrived.

Your servicer will ask you to complete a loss mitigation application and provide a hardship letter explaining what happened, when it started, and how long you expect it to last. Have these ready before you reach out:

Recent pay stubs or, for self-employed borrowers, quarterly profit-and-loss statements covering roughly the last 60 days.
Federal tax returns from the last two years.
Two to three months of bank statements.
A breakdown of monthly expenses, including utilities, insurance, and other debts.

Make sure the income you report on the application matches what shows up on your bank statements and tax returns. Inconsistencies slow the review and often trigger requests for more paperwork. For government-backed loans, servicers can sometimes verify hardship verbally without full documentation up front.²

How Long You Can Pause Payments

The length depends on who owns or insures your loan. For conventional loans backed by Fannie Mae, a servicer can offer an initial forbearance of up to six months and then a six-month extension, for a maximum of twelve months from the start of the plan.³ Freddie Mac follows a similar structure.

FHA loans come with both informal and formal forbearance. Informal forbearance provides a shorter pause while the servicer reviews your situation; formal forbearance runs longer for borrowers with verified financial difficulties. FHA also offers a special forbearance for unemployed borrowers that can last until you find new work.⁴ VA-backed loans have their own framework, and servicers of VA loans cannot require a lump-sum payment when you exit forbearance.⁵

Any forbearance is meant to be temporary. If your hardship looks permanent, your servicer will likely steer you toward a loan modification rather than extending the pause.

What Counts as a Qualifying Hardship

Servicers approve forbearance when you can point to a specific event that disrupted your ability to pay. Common examples include job loss, a significant drop in hours or income, and a serious medical emergency affecting a household earner. Natural disasters that damage your home or shut down local employers also qualify. FHA requires servicers to offer forbearance and a foreclosure moratorium to borrowers who live or work in a presidentially declared major disaster area.⁶

The hardship generally needs to be temporary. If your primary income source is permanently gone, a short-term pause won’t solve the problem, and a modification or other long-term option will fit better.

Interest and Escrow Keep Growing

This is where a payment pause gets expensive in ways borrowers often miss. Interest continues to accrue on your unpaid balance the entire time you’re in forbearance.¹ On a $300,000 balance at 6.5% interest, six months of forbearance means roughly $9,750 in accrued interest on top of the missed principal.

Escrow is the second surprise. Your servicer keeps paying your property taxes and homeowners insurance from your escrow account even while you’re not making payments. Those advances create a shortage the servicer must address through an escrow analysis once forbearance ends. The shortage can be collected as a lump sum or spread over up to 60 months.⁷ Either way, your monthly payment after forbearance will likely be higher than before, at least until the escrow gap is closed.

How You Repay the Missed Amount

A pause is not forgiveness. When forbearance ends, your servicer must work with you on a way to address the unpaid balance, and they should reach out about 30 days before the end date to discuss which option fits your situation.⁸

Repayment Plan

The servicer splits your missed payments into smaller chunks and adds them to your regular monthly payment over a set number of months. If you missed $12,000 over six months and the servicer spreads repayment over twelve months, your monthly payment goes up by $1,000 during that stretch.¹ This works when your income has fully recovered.

Reinstatement

You pay the entire past-due balance in one lump sum and the original schedule resumes with no changes. Few borrowers coming off a hardship have that cash, but if you do, it’s the cleanest option.

Payment Deferral

The missed payments move to the end of your loan as a non-interest-bearing balance. You resume your normal monthly payment immediately, and the deferred amount comes due when you sell, refinance, or reach the end of the loan term.¹ For Fannie Mae loans, you aren’t eligible for a payment deferral if your loan is within 36 months of maturity or if you received a non-disaster deferral within the past 12 months.⁹ Payment deferral is the most popular post-forbearance option because it keeps your going-forward monthly payment the same.

FHA Partial Claim

If your loan is FHA-insured, HUD can cover the past-due amount through a partial claim. The money is secured by a zero-interest subordinate lien on your home that you repay when you sell, refinance, or pay off the first mortgage.¹⁰ The partial claim must be at least $1,000 and cannot exceed 30% of your unpaid principal balance as of the date you first defaulted. You’ll complete a trial payment plan before the claim is finalized.

Loan Modification

When none of the options above are enough, a modification permanently changes your mortgage terms. The servicer might extend the repayment period, reduce the interest rate, or add the missed payments to the principal to bring your monthly obligation down.⁸ A modification requires more documentation and a longer review, but if your income has permanently dropped, a lower monthly payment may be the only realistic way to keep the home.

What a Formal Pause Does to Your Credit

If your account was current when you entered forbearance, your servicer must keep reporting it as current to the credit bureaus for as long as the agreement is in place.¹¹ The servicer can add a notation that the account is in forbearance, but that notation doesn’t carry the same weight as a missed-payment mark.

The key word is “agreement.” If you simply stop paying without contacting your servicer, the missed payments get reported as delinquencies, and the damage can stay on your report for years. Forbearance only protects your credit when it’s formally in place before you miss a payment. Calling your servicer after you’re already 60 days late doesn’t erase what’s already been reported.

Foreclosure Protections While You’re Working It Out

Federal servicing rules keep foreclosure at bay while you try to reach an agreement. A servicer cannot begin the foreclosure process until your mortgage is more than 120 days delinquent.¹² That four-month window exists so you can apply for relief.

If you submit a complete loss mitigation application before the servicer files for foreclosure, the servicer cannot proceed with that filing until it has evaluated your application, sent a written decision, and, if you were denied, given you a chance to appeal.¹³ Foreclosure can only resume if your appeal fails, you reject every option offered, or you don’t follow through on the agreed plan.

If your servicer denies a loan modification, you have 14 days from the date of the decision to appeal, and the appeal must be reviewed by different people than those who made the original call.¹² The servicer has 30 days to decide the appeal. There is no second appeal. The denial notice itself must tell you how to file, and if it doesn’t, the servicer has violated federal rules, which may give you grounds to complain to the Consumer Financial Protection Bureau or challenge the process in court.

Buying or Refinancing Later

A payment pause doesn’t permanently disqualify you from future mortgages. For loans backed by Fannie Mae or Freddie Mac, you become eligible to refinance or purchase again three months after forbearance ends, as long as you’ve made three consecutive on-time payments under your repayment plan, deferral, or modification.¹⁴ If you kept making payments throughout forbearance or reinstated in full, you’re eligible immediately.

The practical timeline is often longer. A forbearance notation can make underwriters cautious even without any delinquencies attached to it. Six to twelve months of clean payment history after forbearance, a stable income, and a reasonable debt-to-income ratio will make a much stronger application.

1
Consumer Financial Protection Bureau. What Is Mortgage Forbearance
2
Department of Housing and Urban Development (HUD). Mortgagee Letter 2024-02
3
Fannie Mae. Forbearance Plan
4
U.S. Department of Housing and Urban Development (HUD). FHA Loss Mitigation Program
5
U.S. Department of Veterans Affairs. CARES Act Forbearance Fact Sheet for Mortgagees and Servicers
6
HUD.gov. Servicer Loss Mitigation for Major Disasters
7
Freddie Mac. Managing Escrow During a COVID-19 Related Hardship Quick Reference Guide
8
Consumer Financial Protection Bureau. Exit Your Forbearance Carefully
9
Fannie Mae. Payment Deferral
10
HUD.gov. Updates to Servicing, Loss Mitigation, and Claims
11
Consumer Financial Protection Bureau. Manage Your Money During Forbearance
12
eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures
13
Consumer Financial Protection Bureau. 12 CFR Part 1024 Regulation X – 1024.41 Loss Mitigation Procedures
14
U.S. Federal Housing Finance Agency (FHFA). FHFA Announces Refinance and Home Purchase Eligibility for Borrowers in Forbearance