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Allows borrowers with federally backed single-family or multifamily mortgage loans whose properties are in a declared disaster area to request and receive automatic forbearance. Servicers must promptly grant an initial 180-day forbearance (even if the loan isn’t delinquent) and allow a one-time extension up to 180 more days; while in forbearance no late fees, penalties, or extra interest beyond what would have accrued on on-time payments may be charged. The rule applies to disasters declared on or after January 1, 2025.
The bill guarantees time-limited, accessible mortgage forbearance for many federally backed loans during state or tribal disaster declarations—reducing immediate foreclosure and financial stress—while shifting administrative and credit risks to servicers and taxpayers, leaving owners of private mortgages unprotected and creating possible longer-term repayment burdens for some borrowers.
Homeowners with federally backed mortgages (FHA, VA, USDA, Fannie Mae, Freddie Mac) — including owners of multifamily buildings of 5+ units — become clearly eligible for disaster-related mortgage relief, protecting many borrowers and rental housing after disasters.
Homeowners in declared disaster areas can pause mortgage payments for 180 days without proving delinquency and may extend forbearance once for up to an additional 180 days (up to 1 year total), reducing immediate foreclosure risk.
No fees, penalties, or extra interest will accrue during forbearance beyond scheduled amounts, lowering disaster-related financial costs for borrowers while they recover.
Homeowners with private or non‑federally backed mortgages are excluded from these protections and therefore remain at higher risk of foreclosure after disasters.
Borrowers may accrue unpaid principal or deferred payments during forbearance that increase future monthly payments or extend the loan term if not managed, creating longer-term financial strain.
Mortgage servicers and lenders will incur administrative and credit-risk costs and may face reduced cash flow and operational strain after major disasters, which could slow servicing or be passed on to consumers through higher fees or rates.
Introduced July 31, 2025 by Adam Schiff · Last progress July 31, 2025