Key Takeaway

Mortgage forbearance temporarily pauses or reduces your monthly mortgage payments during financial hardship, but it does not stop interest from accruing on your loan balance. Property taxes, homeowners insurance, HOA fees, and other homeownership costs remain your responsibility during forbearance, and you must repay the paused payments after the forbearance period ends.

What You Will Learn

This guide explains what mortgage forbearance covers and what it does not, how to request it from your lender, and what repayment options are available when forbearance ends. You will understand which costs continue during forbearance and how to plan for the repayment phase.

What Is Mortgage Forbearance

Mortgage forbearance is a temporary agreement between you and your mortgage servicer to pause or reduce your monthly mortgage payments during a period of financial hardship, such as job loss, medical emergency, or disaster recovery. According to the Consumer Financial Protection Bureau, forbearance is not loan forgiveness. The paused payments become due later, and the terms of repayment depend on your loan type and servicer.

Forbearance is available for most loan types, including conventional loans backed by Fannie Mae or Freddie Mac, FHA loans, VA loans, and USDA loans. Each program has specific eligibility requirements and repayment structures.

What Forbearance Pauses

Forbearance pauses or reduces your monthly principal and interest payment for a set period, typically three to six months initially, with possible extensions up to 12 or 18 months depending on your loan program. During this period, your servicer will not report missed payments to the credit bureaus if you are in an approved forbearance plan, and foreclosure proceedings are generally suspended.

For government-backed loans (FHA, VA, USDA), forbearance was expanded during the COVID-19 pandemic and many protections remain in place. Fannie Mae and Freddie Mac also offer structured forbearance programs for conventional loans.

What Forbearance Does NOT Pause

Forbearance does not stop several critical obligations and costs:

Interest accrual: Interest continues to accumulate on your unpaid loan balance throughout the forbearance period. This means your total loan balance increases each month, even though you are not making payments. The accrued interest is added to what you owe and must be repaid.

Property taxes and homeowners insurance: If your mortgage payment includes an escrow account for property taxes and insurance, those obligations do not pause. Your local taxing authority and insurance company still expect payment. If your escrow account runs short during forbearance, you may need to pay these directly or face a larger catch-up payment later.

HOA fees and special assessments: Homeowners association dues, condo fees, and any special assessments continue as scheduled. HOAs can place liens on your property for unpaid fees, even if your mortgage is in forbearance.

Second mortgages or home equity lines of credit (HELOCs): Forbearance on your primary mortgage does not automatically extend to other loans secured by your home. You must contact each lender separately to request forbearance.

Credit reporting for new delinquencies: If you stop making payments without first securing an approved forbearance agreement, your servicer will report missed payments to the credit bureaus and may begin foreclosure proceedings.

How to Request Forbearance

Contact your mortgage servicer directly as soon as you anticipate difficulty making payments. Do not wait until you have already missed a payment. Explain your hardship and ask specifically for a forbearance agreement. The servicer will likely ask for documentation of your financial situation, such as proof of job loss, medical bills, or disaster damage.

Request the forbearance terms in writing, including the length of the forbearance period, whether payments are fully paused or reduced, and what repayment options will be available when forbearance ends. Keep copies of all correspondence and follow up if you do not receive written confirmation within a few days.

For government-backed loans, you have the right to request forbearance if you are experiencing financial hardship. The servicer must grant it under current CFPB and agency rules, though the length and terms vary by loan type.

What Happens After Forbearance Ends

When your forbearance period ends, your servicer will contact you to discuss repayment options. You will not be required to repay all paused payments in a single lump sum, though that is one option. More common repayment structures include:

Read also: Jumbo Versus Conforming Loans in the US: Where the Limits Bite

Repayment plan: The missed payments are divided into equal installments and added to your regular monthly payment for a set period (often 12 months). For example, if you paused six payments of $1,500 each ($9,000 total), you might pay your regular $1,500 plus an additional $750 per month for 12 months.

Loan modification: Your servicer may agree to modify your loan by extending the term (such as adding the missed payments to the end of a 30-year mortgage) or adjusting the interest rate to make payments more affordable going forward.

Deferral or partial claim: For FHA and other government-backed loans, the missed payments may be deferred to the end of the loan term or structured as a separate junior lien that is due when you sell or refinance. This option allows you to resume your regular payment without a higher monthly amount.

Lump sum reinstatement: You pay all missed payments, accrued interest, and any servicer fees in one payment to bring the loan current. This is the least common option and typically only works if you have received a windfall or resolved your financial hardship completely.

As covered in Principles of Finance, loan modifications and forbearance structures are tools lenders use to manage default risk while helping borrowers navigate temporary financial disruptions.

Common Mistakes to Avoid

Assuming forbearance is automatic: You must request forbearance and receive written approval. Simply stopping payments without an agreement will result in delinquency and possible foreclosure.

Ignoring escrow shortfalls: If your property taxes or insurance are not paid during forbearance, you may face a large bill or even a tax lien. Monitor your escrow account and pay these directly if needed.

Not planning for repayment: Forbearance only postpones the problem. Before your forbearance period ends, review your budget and explore repayment options with your servicer. Waiting until the last moment limits your choices.

Believing interest is forgiven: The paused payments still accrue interest. Your loan balance will be higher when forbearance ends, and you will owe that difference.

Frequently Asked Questions

Does forbearance hurt my credit score?
If you have an approved forbearance agreement and follow its terms, your servicer will not report missed payments to the credit bureaus. However, if you stop making payments without approval, delinquencies will be reported and your score will drop.

Can I get forbearance if I am already behind on payments?
Yes. Contact your servicer immediately to request forbearance. Even if you have missed one or more payments, forbearance may still be available and can stop further damage to your credit and prevent foreclosure.

How long does forbearance last?
Initial forbearance periods are typically three to six months, with extensions available depending on your loan type and servicer policies. FHA, VA, and other government-backed loans may allow longer forbearance periods.

What if I cannot afford the repayment plan after forbearance?
Contact your servicer before the forbearance period ends to discuss loan modification or deferral options. Many servicers offer multiple repayment structures, and you may qualify for a permanent payment reduction through modification.

Conclusion

Mortgage forbearance is a valuable tool during temporary financial hardship, pausing your monthly payments and protecting you from foreclosure. However, it does not stop interest from accruing or eliminate other homeownership costs like property taxes, insurance, and HOA fees. Contact your servicer as soon as you anticipate difficulty making payments, request forbearance in writing, and plan ahead for repayment when the forbearance period ends. For personalized guidance on your specific loan and financial situation, consult a HUD-approved housing counselor or your licensed mortgage servicer.

Disclaimer: This article provides general educational information about mortgage forbearance programs in the United States and is not personalized financial, lending, or legal advice. Forbearance terms, eligibility, and repayment options vary by loan type, servicer, and individual circumstances. Contact your mortgage servicer directly to confirm your options and review the terms of any forbearance agreement before accepting it. For assistance, consult a HUD-approved housing counselor or a licensed financial professional familiar with your situation.