If you’re behind on your mortgage or about to fall behind, government mortgage help comes from two main places: your state’s Homeowner Assistance Fund program, and the loss mitigation options your loan’s backer requires your servicer to offer. Which tools you can use depends on who insures or owns your loan — FHA, VA, USDA, Fannie Mae, or Freddie Mac — and on whether your state’s aid fund still has money.1U.S. Department of the Treasury. Homeowner Assistance Fund
Start With Your State’s Homeowner Assistance Fund
The Homeowner Assistance Fund is a nearly $10 billion federal program that sends money to states, territories, and tribal governments to pay directly toward struggling homeowners’ housing costs.1U.S. Department of the Treasury. Homeowner Assistance Fund Funds can cover mortgage payments, property taxes, homeowner’s insurance, utilities, and other housing-related bills tied to a pandemic-era hardship.2U.S. Department of the Treasury. Privacy and Civil Liberties Impact Assessment for the Homeowner Assistance Fund
Each state runs its own program, so the application, payment caps, and specific rules differ by state. The Consumer Financial Protection Bureau publishes a state-by-state lookup for finding and applying to your program.3Consumer Financial Protection Bureau. Get Homeowner Assistance Fund Help Some states have exhausted their allocations; others still have money available. If yours is closed, the servicer-side options below still apply.
Two eligibility rules are consistent across state HAF programs. The hardship must have occurred after January 21, 2020, and household income is generally capped at 150% of area median income.3Consumer Financial Protection Bureau. Get Homeowner Assistance Fund Help4U.S. Department of the Treasury. Strategies for Determining Eligibility of Homeowners Based on Income The property must be your primary residence. Investment properties and vacation homes are not eligible.
Options If Your Loan Is Government-Backed
If a federal agency insures or guarantees your mortgage, your servicer must evaluate you for that agency’s loss mitigation options before pursuing foreclosure. The menu is different for each one.
FHA Loans
Federal regulations require FHA servicers to consider every available loss mitigation option and pick the one that will produce the smallest loss to HUD.5eCFR. 24 CFR 203.501 – Loss Mitigation The tools include partial claims, loan modifications, special forbearance, pre-foreclosure sales, and a newer option called a payment supplement.6U.S. Department of Housing and Urban Development. Updates to Servicing, Loss Mitigation, and Claims Home retention comes first; only if those don’t work will the servicer look at alternatives like a short sale or deed in lieu.
VA Loans
Veterans and service members with VA-backed loans can ask for a repayment plan that resumes normal payments and adds a set amount each month to catch up on the arrears. VA encourages servicers to stretch these plans up to 24 months so the added payment stays manageable.7U.S. Department of Veterans Affairs. VA Servicer Handbook M26-4 Chapter 5 – Loss Mitigation If a repayment plan isn’t enough, a VA loan modification rolls the missed payments into the balance and sets a new schedule. The VA waterfall also includes 30-year and 40-year modification options for borrowers who need a deeper payment reduction.8Veterans Affairs. VA Help To Avoid Foreclosure
USDA Loans
Rural homeowners with USDA direct loans may qualify for payment assistance subsidies that lower the effective interest rate. If you’ve already fallen behind, USDA special servicing options include moratoriums, delinquency workout agreements, and reamortization to reset the payment schedule.9U.S. Department of Agriculture Rural Development. Single Family Housing Programs
Options If You Have a Conventional Loan
Not a government-backed loan? If Fannie Mae or Freddie Mac owns or guarantees it, you still have federally standardized relief options. The two most common are payment deferrals and loan modifications.
A payment deferral moves your missed principal and interest payments to the end of the loan as a non-interest-bearing balance that doesn’t come due until you sell, refinance, or pay off the mortgage. Fannie Mae limits the deferral to between two and six months of missed payments, and no more than 12 months cumulatively over the life of the loan.10Fannie Mae. Payment Deferral Freddie Mac offers a similar structure.11Freddie Mac. Payment Deferral Solutions Once the deferral is in place, your monthly payment goes back to what it was before you fell behind.
If your income has permanently dropped and the old payment is no longer affordable, a loan modification restructures the terms. Freddie Mac’s Flex Modification can extend the loan term up to 40 years to bring the monthly payment down.11Freddie Mac. Payment Deferral Solutions Fannie Mae offers comparable modification programs through its servicers.12Fannie Mae. Payment Deferral
Who Qualifies
Some eligibility rules run through every program. The home must be your primary residence. You need to show a real financial hardship — a job loss, an income drop, a medical crisis, or something similar. You are either already delinquent, meaning at least one payment is due and unpaid, or at imminent risk of missing a payment.13eCFR. 24 CFR 203.330 – Definition of Delinquency and Requirement for Notice of Delinquency to HUD
Income limits work differently across programs. State HAF programs generally cap eligibility at 150% of area median income, so the same household income could disqualify you in a lower-cost area and still qualify you in a high-cost metro.4U.S. Department of the Treasury. Strategies for Determining Eligibility of Homeowners Based on Income For FHA, VA, USDA, Fannie, and Freddie loss mitigation, there is no hard income ceiling. The question is whether your current finances make it impossible to keep up with the existing payment.
How to Apply
The paperwork is lighter than it used to be, especially for Fannie Mae and Freddie Mac loans. The Federal Housing Finance Agency introduced a streamlined Mortgage Assistance Application that lets wage earners document income with just two recent pay stubs or two recent bank statements. Tax transcripts are no longer required except in limited situations.14Federal Housing Finance Agency. Simplifying the Borrower Mortgage Assistance Experience
Have your most recent mortgage statement handy so you can list the loan number, current balance, and amount past due. Be ready to describe your hardship in writing. For Fannie Mae and Freddie Mac loans, that information goes on the Mortgage Assistance Application (sometimes still referred to as Form 710), which you can get from your servicer’s website or the FHFA.15Federal Housing Finance Agency. Mortgage Assistance Application FHA, VA, and USDA loans may use their own intake forms.
Most servicers accept documents through an online portal. If you mail anything, use certified mail with a return receipt. Keep copies of everything you send and every response you get back.
Your Rights Once You Apply
Regulation X, under the Real Estate Settlement Procedures Act, gives you enforceable protections once your servicer receives a loss mitigation application.
Timelines the Servicer Must Meet
The servicer has five business days to acknowledge your application in writing and tell you whether it is complete or what is still missing. Once the application is complete, the servicer has 30 days to evaluate you for every available option and send a written decision.16eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures Missed deadlines are a regulatory violation you can report to the CFPB.
Dual Tracking Is Banned
If you submit a complete loss mitigation application more than 37 days before a scheduled foreclosure sale, the servicer cannot move for a foreclosure judgment or conduct the sale while your application is under review.16eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures The protection runs until you are notified of the decision, any appeal is resolved, or you reject the offered options.
If You Are Denied a Modification
You have 14 days from the date the servicer sends its determination to request an appeal. Different staff must review the appeal, and the servicer has 30 days to decide it.16eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures The appeal right applies when the complete application was received at least 90 days before the foreclosure sale. There is no second appeal, so include any additional documentation the first time.
Watch for Mortgage Relief Scams
Scammers follow legitimate programs. The FTC’s Mortgage Assistance Relief Services Rule makes it illegal for any company to charge upfront fees for mortgage relief work. A provider can only collect payment after it has given you a written offer from your actual lender that you have agreed to accept.17Federal Trade Commission. Mortgage Assistance Relief Services Rule – A Compliance Guide for Business Anyone asking for money before doing anything is breaking federal law.
Other warning signs:
- Falsely claiming to be affiliated with the government or your lender.
- Telling you to stop paying your mortgage without clearly disclosing that this could cost you your home and damage your credit.
- Instructing you to stop communicating with your servicer.
- Guaranteeing a specific outcome or timeline for a loan modification.
Report suspected scams to the FTC at ReportFraud.ftc.gov and to your state attorney general’s office.18Federal Trade Commission. Mortgage Relief Scams
Get Free Help From a HUD-Approved Counselor
Before filling out a single form, call a HUD-approved housing counseling agency. These agencies work through a nationwide network to walk you through your options, help you prepare your application, and negotiate with your servicer on your behalf.19HUD Exchange. Housing Counseling Search for a counselor through HUD’s online portal or call 800-569-4287.20U.S. Department of Housing and Urban Development. Housing Counseling Services The counseling itself is free. With the appeal window under Regulation X so short, getting a counselor involved early can be the difference between keeping your home and running out of time.