The United States Department of Housing and Urban Development has issued instructions regarding loss mitigation options for covered single family borrowers that are in the CARES Act.

For borrowers experiencing financial hardship because of COVID-19 which impacts their ability to make mortgage payments on time, the mortgagee must offer a forbearance which allows for one or more periods of reduced or suspended payments without specific terms of repayment.  The mortgagee may use any available method for communicating with a borrower regarding forbearance.  The initial forbearance period may be up to 6 months.  If needed, the borrower can request an additional 6 months forbearance period.  The mortgagee must waive all late charges, fees, and penalties as long as the borrower is on a forbearance plan.  Any borrower granted forbearance and is otherwise performing as agreed is not delinquent for purposes of credit reporting.  This provision is effective immediately.

The CARES Act established the COVID-19 National Emergency Standalone Claim.  Borrowers are eligible if the mortgage was current or less than 30 days past due as of March 1, 2020, the borrowers states they can resume making mortgage payments on time, and the property is owner occupied.  If this claim is granted, the borrowers accumulated late fees are waived, and the claim only includes arrearages, consisting of principal, interest, taxes and insurance.  The mortgagee is also automatically granted a 90-day extension to the 6-month deadline for recorded mortgages.  All borrowers who receive a forbearance must be evaluated for the National Emergency Standalone Claim.  This program starts no later than April 30, 2020 but mortgagees can start it sooner.

The mortgagee must evaluate any borrower not brought current by a National Emergency Standalone Claim for other loss mitigation options.

These remedies do not affect the terms of the mortgage.

For Home Equity Conversion Mortgages, upon request of the borrower, the mortgagee must delay submitting a request to call a loan due and payable.  The initial extension period may be up to 6 months.  If needed, an additional 6 month period can be approved by HUD.  The mortgagee must waive all late charges, fees, and penalties as long as the borrower is in an extension period.  For loans that have become automatically due and payable, entered into a deferral period, or become due and payable with HUD approval, the mortgagee may also take an automatic extension for any deadline for foreclosure and claim submission for up to 6 months.  If needed, HUD can approve an additional 6 month extension.  (Mortgagee Letter 2020-06, April 1, 2020.)

The Center for Disease Control (CDC) has issued guidance regarding steps to protect people experiencing homelessness from COVID-19.  CDC recommends partnerships across local sectors including homeless outreach teams, state and local health departments, hospitals and law enforcement.

CDC’s prevention measures are not to clear encampments during community spread of COVID-19 unless individual housing units are available because doing so increases risk of disease spread.  CDC also recommends ensuring restrooms near encampments have functioning water, hand hygiene materials and bath issue, and they remain open 24 hours per day to people experiencing homelessness.  If toilets or handwashing facilities are not available nearby, portable toilets with handwashing facilities should be brought for encampments of more than 10 people.

Persons experiencing unsheltered homelessness with suspected or confirmed COVID-19 should be provided isolation housing.  Behavioral health teams should be involved in the planning for these sites to facilitate access to community support.  If they need to be hospitalized, a discharge plan should be in place.  (CDC COVID-19 Interim Guidance, March 22, 2020.)

The California Tax Credit Allocation Committee (TCAC) has issued guidance for compliance monitoring and management functions because of COVID-19.  TCAC is cancelling all scheduled inspections until April 30, 2020.  Starting in May, 2020, TCAC will conduct desk audits with physical inspections to occur at a later date.

Day-to-day operation of a property is considered an essential business practice that must continue despite shelter in place and stay at home orders.  TCAC has several recommendations to perform essential business functions and protect the safety of on-site staff and residents including having an emergency protocol plan, limiting office hours and having a sign-up sheet, posting a sign on the window or door of the office about how to apply, and having an online application or drop box to pick up and drop off applications.  (Tax Credit Allocation Committee Memo, March 24, 2020.)

The California Tax Credit Allocation Committee (TCAC) has issued guidance for recertifications, services and work orders because of COVID-19.  For households that start their 120 day certification/recertification period on or after March 20, 2020, management should provide households with a certification/recertification packet containing all TCAC required forms.  Third party verifications should be sent to employers directly.  Tenants should be able to return document via mail or drop box.  TCAC strongly suggests giving tenants 60 to 90 days to gather and return information.  Management agents can sign forms after the date the tenants signs and returns the forms if it is within the normal 120 day certification/recertification period.

For certifications and recertifications that were in process on March 19, 2020, management should provide households with a certification/recertification packet containing all TCAC required forms. Tenants should be able to return document via mail or drop box.  Management agents can sign forms after the date the tenants signs and returns the forms if it is within the normal 120 day certification/recertification period.

Initial tenant income certification meetings and other necessary meetings will continue in person.

Any documentation signed after the normal 120 day certification/recertification period must have  a statement in the tenant file stating why the recertification was completed late.

For work orders, management should notice tenants that any non-essential work order will be postponed.  Remaining work orders should be scheduled based on need and severity.

Service amenities including access to the community room and after school programs should be limited for social distancing.  All food-related programs should be suspended except for canned or prepackaged deliveries.  For properties that cancel or postpone required service amenities, required hours must be made up before the end of 2020.  (Tax Credit Allocation Committee Memo, March 19, 2020.)

The United States Department of Housing and Urban Development temporarily changed re-verification of employment and appraisal rules for FHA Single Family programs.  Until May 17, 2020 mortgagees do not need to re-verify employment within 10 days of the Note or within 10 days of loan disbursement if there is no loss of employment by the borrower.

Appraisers may do Exterior-only (viewing from the street) or Desktop-Only (relying on various documents and not viewing the property) appraisals for FHA Single Family loans.

There changes also apply to refinances and reverse mortgages.  (Mortgagee Letter 2020-05, March 27, 2020.)