Sponsors (14)
The bill provides meaningful, short-term mortgage forbearance and credit protections for many disaster-affected homeowners (including multifamily renters) in exchange for costs and operational strains on lenders, coverage gaps for some loan types, potential delays tied to federal declarations, and the risk of later repayment burdens for borrowers.
Homeowners in federally declared disaster areas can pause mortgage payments for up to 180 days (plus a one-time 180-day extension) with no extra fees or penalties and forbearance available even if already delinquent, preserving credit and reducing immediate financial strain.
Borrowers have an enforceable, straightforward process to request relief—servicers must grant forbearance upon a written request with verifiable damage documentation—and protections are tied to a defined disaster window, increasing predictability for affected households.
Renters and multifamily property owners in declared disaster areas are explicitly covered because multifamily loans (5+ units) are included, extending protections beyond single-family homeowners.
Mortgage servicers and lenders may incur significant administrative and liquidity strains from mandated forbearances, which could lead to higher costs passed on to consumers or taxpayers.
Homeowners who pause payments can face lump-sum repayment, loan modification, or other downstream obligations later, creating the risk of future payment shocks if long-term loss-mitigation is not clear or available.
Requiring verifiable damage documentation to obtain forbearance may delay relief for borrowers who cannot promptly produce records, disproportionately affecting low-income and otherwise vulnerable disaster victims.
Based on analysis of 3 sections of legislative text.
Requires servicers of federally backed single-family and multifamily loans in presidential disaster areas to grant up to 180 days (plus one 180-day extension) of forbearance with no extra fees or added interest.
Allows borrowers with federally backed single-family or multifamily mortgage loans for properties in a presidentially declared disaster area that were damaged or destroyed to request up to 180 days of forbearance on loan payments, with one possible 180-day extension. Servicers must grant forbearance upon a written request and documentation of verifiable damage, and borrowers may end forbearance at any time. During forbearance the borrower may not be charged fees, penalties, or additional interest beyond what would have accrued if payments had been made on time and in full. The rule applies for the duration of the presidential disaster declaration and covers loans purchased or securitized by Fannie Mae or Freddie Mac, including 1–4 unit homes and multifamily properties of 5+ units.
Introduced April 17, 2025 by Judy Chu · Last progress April 17, 2025