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People with mortgages from USDA Rural Development — who have lost 20% of their income due to the COVID-19 — can now request a new “moratorium” on their home loan payments. The moratorium stops home payments for six months.

USDA’s conditions are described as follows:

You [MAY] qualify for a moratorium based on the loss of repayment income (20% or more only for those that are a party to the Note) or an unexpected expense resulting from the illness, injury or death of the borrower or family member.

Please understand that the payments that are suspended during the moratorium will be added back into the remaining balance of the loan and re-amortized over the remaining term of the loan. Your payments will increase.  

Borrowers will be granted a six-month suspension of payments. After this period, your situation will be re-evaluated whether to continue the moratorium or to reschedule the missed payments.

Some homeowners may find that — if they have already been making loan payments for some time and the total size of their loan has been reduced — when it is re-amortized over the remaining years of their loan, even with the extra amount added, their total payments may go down. YMMV.

There are suggestions that, should a family’s income not improve during that time, they may request another moratorium. No guarantees on this. And everyone’s situations may be different, so varying options may be on offer. The USDA Rural Development home loans already offer a reduction in payments, or “subsidy,” which reduces monthly payments for homeowners who’ve lost some income.

To contact the local USDA Rural Development office for more info, call (435) 896-8250.

To apply, or get more information, contact the Centralized Support Center directly by calling 1-800-414-1226 or by emailing your info (including ID number, contact info, and whether you still live in the home) to rdquestion@stl.usda.gov.