Can I Protect My Home During COVID-19?

With over 28.4 million positive cases and counting as of this post, COVID-19 has changed how we work, live, and communicate. Millions of Americans have lost their jobs and homes because of the pandemic, and without an end in sight, the hits keep coming. So, what can you do to protect your financial peace of mind during these unprecedented times?

FHA Protections During COVID-19

The Federal Housing Administration, or FHA, is offering protection for homeowners who are facing foreclosure because of the pandemic. Essentially, the FHA and the U.S. Department of Housing and Urban Development (HUD) have created a policy where loan servicers must review FHA-insured single-family mortgages that are behind or close to falling behind on their payments.

They will do this with the waterfall process. This means that the servicer's responsibility is to evaluate the borrower and determine loss mitigation alternatives to help them avoid foreclosure. In addition to the waterfall process, loan servicers have to include COVID-19 forbearance options.

To help homeowners during COVID-19, the FHA has created the COVID-19 National Emergency Standalone Partial Claim. In general terms, a partial claim is an interest-free loan to help borrowers catch up on their payments. The loan doesn't need to be repaid until the first mortgage has been paid off.

The COVID-19 National Emergency Standalone Partial Claim consolidates all overdue mortgages and puts them in a junior lien or claim of up to 30% of the mortgage's principal balance. The lien is repayable when the homeowner's mortgage ends, which usually happens when they sell or refinance their home.

Those who don't qualify for the partial claim can pursue other alternatives to help lift the burden of their mortgage debt and avoid foreclosure.

COVID-19 Loan Modification

There are three alternatives for homeowners who do not qualify for the COVID-19 National Emergency Standalone Partial Claim.

  • The COVID-19 Owner Occupant Loan Modification alters the interest rate and the term of the existing mortgage.
  • The COVID-19 Combination Partial Claim and Loan Modification option allows the homeowner to get a partial claim for up to 30% of their unpaid principal balance. Any remaining amounts are taken care of with a loan modification. Homeowners who don't qualify for a partial claim or modification separately can combine the two options for debt relief.
  • The COVID-19 FHA HAMP Combination Loan Modification and Partial Claim reduces the amount of documentation and filing necessary to get a loan modification or partial claim. Homeowners who aren't eligible for any other option can be a part of this loan modification program.

These options are available to homeowners with mortgages that are 30 days past due as of March 1, 2020. In addition to these relief options, the FHA has ordered a foreclosure and eviction moratorium, which means that evictions and foreclosures are 'frozen' effective July 8, 2020.


Another loss mitigation program for homeowners struggling with their mortgages because of COVID-19 is the CARES Act. Passed by Congress, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) gives borrowers temporary protection from foreclosure.

Homeowners with a mortgage loan backed by the FHA, VA, or USDA qualify for forbearance under the CARES Act. Fannie Mae has a helpful loan lookup tool to help you determine your loan provider. You will need to provide basic contact information and the last four digits of your Social Security number.

Homeowners who do not have a federally backed mortgage can pursue options from their state or servicer. Many states have adopted foreclosure moratoriums, and you can find information about your state's foreclosure options here.

Tips for Struggling Homeowners

The National Consumer Law Center has several tips for homeowners who are struggling with their mortgages during COVID-19.

  • Since most call centers are overwhelmed with borrowers' calls, consider applying for a COVID-19 loss mitigation program through your mortgage provider's website.
  • If you are experiencing financial hardship due to COVID-19, clearly state that to the servicer, especially if you contact them through phone or mail.
  • The forbearance period won't last forever, so keep tabs on deadlines for relief applications and the end of the government's forbearance protections.
  • Be sure to research whether you will have to make payments in a lump sum or installments.
  • If you have an escrow account, look into how your escrow items will be paid during forbearance.
  • For those who don't have an escrow account, keep paying your property taxes, insurance, and Homeowners Association fees if possible.
  • If you have been denied a forbearance or have issues with the application process, contact the Consumer Financial Protection Bureau.

These programs can provide relief for homeowners struggling with payments due to the pandemic, but the process of applying for forbearance, loan modification, or a partial claim can be complicated.

Contact experienced legal professionals at Kovacs Law, P.C. with questions about your options under the CARES Act and FHA relief programs.