A mortgage repayment plan is a written agreement with your loan servicer that lets you catch up on missed payments by adding a portion of what you owe to each of your regular monthly payments for a set number of months. Your interest rate, principal balance, and loan term stay the same. Once the missed amount is paid off, your payment drops back to normal and the loan is considered current. Most plans run three to twelve months, depending on how far behind you are and what you can afford.
How the Math Works
Your servicer adds up everything you owe beyond your normal schedule: missed principal, missed interest, unpaid property taxes or insurance premiums that came due from your escrow account, and any late fees. That total is your arrearage. The servicer divides it into equal installments and adds one installment to each regular payment for the length of the plan.
Say you missed three payments of $1,500 each. That’s $4,500 in arrears, plus $300 in late fees. On a six-month plan, an extra $800 gets added to your normal $1,500, making your temporary payment $2,300. After six months the arrearage is gone and you go back to $1,500.
Late fees on conventional mortgages can run up to 5% of the principal and interest portion of the payment and are assessed once a payment is more than 15 days overdue.1Fannie Mae. B8-3-02, Special Note Provisions and Language Requirements If your servicer had already started foreclosure-related legal work, those attorney fees are often rolled into the arrearage too. That can add several thousand dollars, so ask for an itemized breakdown before you sign anything.
When a Repayment Plan Is the Right Tool
A repayment plan is the lightest form of loss mitigation. It fits best when your hardship was short-lived and your income has recovered enough to handle a temporary bump in your payment. It doesn’t lower your interest rate, extend your term, or shift missed payments to the end of the loan. If you can’t afford your regular payment even after the hardship ends, a loan modification is probably a better fit. If you need more time before resuming payments at all, forbearance may make sense first, and a repayment plan is one of the common ways to resolve a forbearance once it ends. Some borrowers, particularly on government-backed loans, can also move the missed amount to the end of the loan through a deferral or partial claim rather than repaying it monthly.2Consumer Financial Protection Bureau. Exit Your Forbearance Carefully
Who Qualifies
The core question is whether you can afford the increased payment. You’ll need to show that whatever caused you to fall behind has passed and that your current income leaves room each month for the regular mortgage payment plus the repayment add-on. Servicers look at your debt-to-income ratio to make sure the plan is realistic.
Timing also matters. Federal rules prohibit servicers from starting the foreclosure process until your loan is more than 120 days delinquent.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures Repayment plans are most commonly offered when you’re one to four months behind. Once a foreclosure sale has been scheduled your options shrink, though a servicer is still required to evaluate a complete loss mitigation application received more than 37 days before the sale date.4Consumer Financial Protection Bureau. 1024.41 Loss Mitigation Procedures
Government-backed loans have their own rules. FHA servicers follow HUD guidelines that distinguish between informal and formal repayment plans with different duration limits. VA-backed loans may offer a partial claim option, where the VA pays the arrearage and the borrower repays it through a separate subordinate lien due when the home is sold or refinanced. Ask your servicer specifically which programs your loan type makes available.
Documents You’ll Need
The centerpiece of your application is the Uniform Borrower Assistance Form, commonly known as Fannie Mae Form 710, which servicers for conventional, FHA, and many other loan types use as their standard intake document.5Fannie Mae. Receiving a Borrower Response Package You can download it from your servicer’s website or ask customer service to send you one. Along with the form, expect to provide:
- Your most recent 30 days of pay stubs, the last two years of federal tax returns, and recent bank statements. If you’re self-employed, include a year-to-date profit and loss statement.
- A hardship letter explaining what happened, when it started, and why you can now afford higher payments. Be specific with dates. “Medical emergency from March to June 2025” is useful; “financial difficulties” is not.
- A line-by-line monthly budget covering all income, expenses, and debts. The servicer uses this to check whether the proposed installments are realistic.
Accuracy matters. Conflicting numbers between your bank statements and your budget raise flags, and applications get rejected over mismatched figures more often than over insufficient income. If your income fluctuates, explain the pattern rather than picking one favorable month.
Setting the Plan Up
Submit your application package through your servicer’s online portal or by certified mail with return receipt requested. Federal rules require your servicer to acknowledge receipt within five business days.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures The acknowledgment will tell you whether your file is complete or whether more documents are needed.
Once the application is complete, the servicer has 30 days to evaluate it and send you a written determination listing which loss mitigation options you qualify for.4Consumer Financial Protection Bureau. 1024.41 Loss Mitigation Procedures If a repayment plan is offered, you’ll receive a formal agreement listing exact payment amounts, due dates, and the consequences of missing a payment. Read every line before signing. Make the first increased payment on the date specified. There is no grace period for the first installment.
Federal Protections While You’re in the Process
Two rules under Regulation X keep foreclosure from surprising you while you’re trying to work things out.
The first is the 120-day pre-foreclosure review period. Your servicer cannot file the first legal document to start a foreclosure until your loan is more than 120 days past due.3eCFR. 12 CFR 1024.41 – Loss Mitigation Procedures That gives you roughly four months from your first missed payment to apply for help before legal action can begin.
The second is the ban on dual tracking. If you’re performing under a repayment plan, the servicer cannot simultaneously pursue a foreclosure judgment, order of sale, or foreclosure sale.4Consumer Financial Protection Bureau. 1024.41 Loss Mitigation Procedures The same protection applies while a complete loss mitigation application is being evaluated, as long as it was submitted more than 37 days before a scheduled sale. The servicer has to choose one path: work with you on a solution, or pursue foreclosure. Not both.
What Happens if You Miss a Payment During the Plan
Missing even one scheduled payment usually voids the entire agreement. The servicer can treat the plan as failed and resume foreclosure proceedings without starting the evaluation process over. This is one reason servicers scrutinize your budget so carefully upfront. They would rather deny a plan than watch it collapse halfway through.
If a plan does fail, you aren’t necessarily out of options. Federal rules still require the servicer to evaluate you for available loss mitigation alternatives when you submit a new complete application, as long as you haven’t already been evaluated for the same options in a prior application during the same delinquency. A modification or forbearance might still be available. But a failed plan will hurt your credibility with the servicer, and the arrearage will have grown while you were in it.
If you realize mid-plan that you can’t keep up, call your servicer before you miss the payment. Proactive contact isn’t a guarantee of a second chance, but it gives you a far better shot at an alternative than a silent default.
How a Repayment Plan Affects Your Credit
A repayment plan doesn’t erase the delinquency that led to it. Your servicer may keep reporting the loan as delinquent to the credit bureaus until every missed payment has been repaid in full.6Consumer Financial Protection Bureau. What Is a Repayment Plan on a Mortgage Even if you’re making every plan payment on time, your credit report may still show late payments for the months you originally missed.
Once you finish the plan and the loan is current again, the delinquency stops being reported going forward. The past-due marks stay on your history but fade in impact as you build a run of on-time payments. From a credit standpoint, a completed repayment plan looks far better than a foreclosure, short sale, or deed in lieu, any of which can hold your score down for years.
If Your Request Is Denied
Repayment plan denials don’t carry the same formal appeal right under Regulation X that loan modification denials do. That doesn’t leave you stuck. You can ask the servicer to reconsider, submit updated financial documents showing improved income, or ask to be evaluated for a different option such as a modification or deferral. If you believe the servicer mishandled your application or ignored federal servicing rules, you can file a complaint with the Consumer Financial Protection Bureau or bring in a HUD-approved housing counselor to help.
Free Help From Housing Counselors
You don’t have to negotiate with your servicer alone. HUD-approved housing counseling agencies provide free or low-cost help with mortgage defaults, forbearance, foreclosure prevention, and loss mitigation applications.7Consumer Financial Protection Bureau. Find a Housing Counselor A counselor can review your finances, help you decide which option fits, and even talk to your servicer on your behalf.
To find one near you, search by ZIP code at consumerfinance.gov/mortgagehelp or call the CFPB at 1-855-411-2372. Not every agency handles every type of counseling, so confirm that the one you contact works with borrowers facing delinquency or foreclosure.