Has the Coronavirus impacted your ability to pay your mortgage? If so, you could soon have your past due payments covered by the VA, giving you years to slowly repay them back.
The Department of Veterans Affairs recently announced a proposal to help 60,000 veterans who are behind on their loan payments.
To do this, the VA plans to cover missed payments on VA mortgages that were put on hold due to the coronavirus.
The VA’s proposed plan is called the COVID–19 Veterans Assistance Partial Claim Payment Program.
If the proposal is passed, it would make the repayment plan easier for veterans who have overdue mortgage payments.
Under the proposal, any overdue mortgage payments that the holder of the VA-back mortgage has run up over the last nine months will be paid to the lender by the VA. The veteran will then have to pay back that money to the VA while they continue to make their regular mortgage payments.
Those borrows will have up to 10 years to repay any VA funds used for this program, with an up to five year delay before payments kick-in. VA plans to charge 1% interest on the loans.
Those receiving this assistance from the VA will still have to work with their lender to figure out a mutually agreeable payment plan (forbearance) for future payments, and they will have to stick to that payment plan if they wish to remain in their homes.
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There are certain criteria you will need to meet in order to be qualified if the proposal is adopted:
- You missed at least one monthly payment since receiving CARES Act forbearance.
- As of March 1st, 2020, borrowers must have been less than 30 days late with their mortgage payments.
- You must have sufficient income to make payments on your mortgages post-forbearance.
- Your debt-to-income ratio must be adequate.
Additionally, prior to the pandemic you must have been in good standing with your VA loan.
The number of veterans that are estimated to qualify for relief is between 33,000 and 60,000.
