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FHA Announces Temporary Partial Waivers to Its HECM Policy for Borrowers Impacted by COVID-19

September 02, 2021 Print ShareThis

On September 2, 2021, the Federal Housing Administration (FHA) issued the following temporary partial waivers to its Home Equity Conversion Mortgage (HECM) policies. These waivers provide mortgagees with expanded flexibility to help senior homeowners with HECMs who are struggling financially due to COVID-19.

  • Temporary Partial Waiver of Mortgagee Letter 2015-11: This waiver allows mortgagees to offer repayment plans to HECM borrowers with unpaid property charges regardless of their total outstanding arrearage and is effective through June 30, 2022.
  • Temporary Partial Waiver of Mortgagee Letter 2016-07: This waiver permits mortgagees to seek assignment of a HECM immediately after using their own funds to pay unpaid property taxes and insurance on or after March 1, 2020. Additionally, it eliminates the three-year waiting period for such assignments. The waiver is effective through June 30, 2022.

As the nation continues its COVID-19 recovery, these waivers offer relief to HECM borrowers who were unable to make timely property charge payments due to financial hardships resulting from the pandemic.

Mortgagees are encouraged to thoroughly review both waivers and the policies outlined in Mortgagee Letter 2015-11 and Mortgagee Letter 2016-07.

HUD certified housing counselors are encouraged to email their HUD Point of Contact (POC) or for any questions on HECM issues.

Tags: COVID-19 Housing Counseling Program