Key Takeaways
- Mortgage relief can reduce or pause payments through forbearance, loan modification, or refinancing.
- Start by contacting your lender early, since many relief options work best before you fall behind.
- Use forbearance for short-term hardship, but plan for how you’ll repay missed payments when it ends.
Speak with a lender about your options. Start here
Mortgage relief programs help homeowners who are struggling to make payments after events like job loss, medical bills, or an economic downturn. Mortgage assistance covers options such as loan modifications, forbearance agreements, and refinancing. Both aim to make mortgage payments easier to manage.
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What is mortgage relief?
Mortgage relief is help that lets you lower, pause, or restructure your mortgage payments so you can stay in your home and avoid foreclosure. It includes a variety of initiatives and measures designed to assist homeowners dealing with financial struggles in managing their mortgage payments. These difficulties can stem from unexpected life events, such as job loss, illness, or other economic hardships that reduce a homeowner’s ability to stay current on their mortgage payments. Mortgage relief aims to offer homeowners temporary or permanent options to prevent foreclosure, helping them reduce financial losses while remaining in their homes or paying off their mortgage.
Talk to a lender about your options. Start here
Where to find mortgage assistance grants and mortgage relief programs
You can find mortgage assistance grants and mortgage relief options through government programs at the state and federal level, non-profit organizations that specialize in housing assistance, and services provided directly by lenders or mortgage servicers.
Your first step in exploring mortgage assistance grants, whether at the federal or state level, should be the Department of Housing and Urban Development (HUD). HUD.gov provides a valuable resource with a complete list of HUD-approved housing agencies in every state.
You should also look into local homeowner assistance funds and housing counseling services available in your area.
Speak with a lender about your options. Start here
How does mortgage relief work?
Mortgage relief works by changing the terms of your mortgage, through forbearance, a loan modification, or a refinance, to lower or pause your payments while you recover from a hardship.
Mortgage relief works by adjusting the terms of a homeowner’s mortgage agreement to address and alleviate financial stress. The process typically begins with the homeowner reaching out to their lender or a housing counselor to discuss their situation and explore available mortgage assistance options.
For example, consider a homeowner struggling with unemployment due to an economic downturn. They could apply for a forbearance program through their lender, temporarily suspending mortgage payments while they seek new employment. During the forbearance period, interest may still accrue, but the homeowner avoids foreclosure.
Once they secure a new job, they work with their lender to resume payments and discuss options for repaying the accrued amount, possibly extending the loan term to keep monthly payments manageable.
Mortgage Relief vs. Mortgage Assistance
Mortgage relief: Helps you change or temporarily pause your current mortgage terms to avoid foreclosure. Examples include loan modifications, forbearance, and refinancing.
Mortgage assistance: Provides outside financial help or guidance (like grants, interest-free loans, or counseling programs) to support homeowners without altering the loan itself.
Both can work together to help borrowers stay afloat, depending on your finances, loan type, and program eligibility.
Types of mortgage relief programs
A number of mortgage assistance options may be available to homeowners when they encounter financial challenges. By understanding the specifics of each type of mortgage relief option, you can identify the best course of action to alleviate mortgage-related financial stress.
Review your options with multiple lenders. Start here
Mortgage loan modification
A mortgage loan modification involves altering the terms of your existing home loan to make the monthly payments more manageable. Options will vary by lender, but they can include:
- Changing the type of loan
- Extending the loan term
- Reducing mortgage interest rates
- Lowering the monthly payment
Modifications are intended for homeowners who wish to keep their homes but are struggling with their current mortgage payments, typically due to a significant change in their financial situation. The goal of a loan modification is to achieve a monthly payment that the homeowner can afford over the long term.
Mortgage loan refinance
Refinancing your mortgage replaces your existing mortgage with a new loan, often to secure a lower interest rate or change your repayment term. A refinance can lower your monthly payment, shorten your loan term, or let you tap home equity for large expenses. Some refinance programs target homeowners under financial strain and offer more flexible terms to reduce payment pressure. Homeowners with conforming loans backed by Freddie Mac or Fannie Mae also have two specific mortgage relief refinance options.
Fannie Mae RefiNow
Fannie Mae’s RefiNow program helps homeowners who may not have qualified to refinance under standard criteria. RefiNow offers a minimum 0.5% interest rate reduction. If an appraisal is required, Fannie Mae provides a $500 appraisal credit that the lender passes on to the borrower.
To qualify, borrowers must have:
- Fannie Mae-backed mortgage
- Household income at or below 100% of the area median income
- History of on-time mortgage payments
Freddie Mac Refi Possible
Freddie Mac’s Refi Possible program helps low- to moderate-income homeowners refinance. Refi Possible lowers the interest rate by a minimum of 0.5% and can reduce the monthly payment. Freddie Mac allows borrowers to roll up to $5,000 of closing costs into the loan and provides a $500 appraisal credit, which makes refinancing more affordable.
To qualify, borrowers must have:
- Freddie Mac-backed single-family mortgage
- Household income at or below 100% of the area median income
- Timely payment history
Streamline Refinance
Homeowners with government-backed FHA, VA, and USDA mortgages can opt for a Streamline Refinance. This loan option functions similarly to a mortgage relief refinance because you might qualify even if your primary residence has negative equity, which some borrowers refer to as being “underwater” on the loan. And a Streamline Refinance has other benefits, too.
A Streamline Refinance also typically requires less paperwork because you often won’t need to re-verify income and employment or get a new appraisal, and government-backed loans often come with below-market mortgage interest rates and lower closing costs.
- FHA Streamline Refinance: You generally need at least 210 days since your current FHA loan closed and at least six monthly payments made. After a forbearance, you may still qualify once you complete the forbearance and make three consecutive on-time payments, under HUD rules.
- VA Streamline Refinance (IRRRL): You may be able to use an IRRRL even if your current loan is delinquent. If the loan is more than 30 days past due, the VA requires prior approval, and the lender must confirm you have resolved the cause of the delinquency and can afford the new payment. Lender overlays are common.
Learn more about Streamline Refinance eligibility. Start here
Mortgage forbearance
Mortgage forbearance is an agreement with your lender that temporarily reduces or pauses your mortgage payments for a specified period. It can be helpful during short-term financial hardship, offering you time to recover without the immediate threat of foreclosure. When the forbearance ends, you are responsible for repaying the missed payments, and your lender will usually present repayment options to help make that amount manageable.
Fast Fact: Relief Options Don’t Always Hurt Your Credit
Forbearance itself typically does NOT damage your credit score, as long as it’s approved by your lender. Missed payments without a plan will.
Financial aid
Distressed homeowners may be eligible for a variety of mortgage relief programs with their lender. Each type is designed to address specific financial challenges homeowners might face. Here’s a closer look at some of the options:
Interest-free loans
Mortgage assistance loans are an affordable choice for homeowners in need since they offer short-term financial help without the burden of interest payments. Interest-free loans must be repaid over time, but the absence of interest may significantly decrease the total amount due.
Waiving fees
Lenders may offer to waive certain fees associated with mortgages, such as late fees, application fees, or even some closing costs for refinancing. This mortgage relief option reduces the overall financial burden on the homeowner, making it easier to manage mortgage payments or the costs of refinancing.
Second mortgage or equity loan
If you have home equity, a second mortgage or home equity loan can give you a lump sum of cash for urgent financial needs, including mortgage payments. This option can offer short-term relief but also increases debt, so review the rate, payment, and repayment terms before proceeding. Mortgage assistance options vary by program and location, and eligibility often depends on your income, hardship, and home equity.
Loan counseling
Loan counseling services can assist struggling homeowners in reviewing their options and planning their next steps. A housing counselor can help you create a budget, evaluate available mortgage relief programs, and gather the necessary paperwork to apply. If you need to work directly with your lender, a counselor can also help you communicate and negotiate with them. Many of these services are offered by HUD-approved counseling organizations.
Grants to help pay mortgages
Mortgage assistance grants may be harder to find than they were during the height of the coronavirus pandemic, but some programs still offer help. If you face financial strain from job loss, rising living costs, or another hardship, review the mortgage assistance grant options below to see what may fit your situation.
Speak with lenders about your options. Start here
Homeowner Assistance Fund (HAF)
The American Rescue Plan Act created the Homeowner Assistance Fund (HAF) in 2021 to help homeowners avoid foreclosure and catch up on housing payments. The U.S. Department of the Treasury oversaw HAF, and states ran their own programs. HAF is no longer accepting applications in nearly all states. The Treasury set September 30, 2026, as the deadline for programs to obligate their remaining funds, and most state programs closed before then. If you are behind on your mortgage, contact your loan servicer about loss-mitigation options and reach out to your state housing finance agency or a HUD-approved counselor for current help. You can also check the Consumer Financial Protection Bureau for a list of assistance resources.
State mortgage assistance grants
There may also be state-specific mortgage assistance available, with some offering grants and others offering deferred loans. Many pandemic-era HAF programs run by these agencies have closed, but state housing finance agencies still offer counseling and other help. Look into the options in your state and check for extra resources at the county or city level. The best place to start is by visiting your local housing finance agency. For example:
HUD counseling agencies
A HUD-approved counseling agency in your state may know which mortgage assistance grants are available in your community. Housing counselors can point you to local government and non-profit programs that offer help, and many HUD-approved agencies also provide free foreclosure prevention counseling.
What to do when you can’t pay your mortgage
Missing a mortgage payment can feel overwhelming, but you still have options and can take action. Start early, act quickly, and focus on steps that protect your home while you work through the short-term hardship.
Call Your Lender Before You Miss a Payment
Lenders often have relief options you won’t see online, and they prefer helping you avoid foreclosure. Reaching out early increases your chances of qualifying for forbearance or a modification.
Review your budget
Review your income, bills, and spending to see where you can cut expenses or redirect funds toward the mortgage. A detailed budget can help you prioritize essentials and uncover quick savings. This review can also help you pull together documents your lender may request when you apply for assistance.
Explore mortgage assistance grants and mortgage relief programs
Explore mortgage assistance grants and relief programs available through federal and state agencies, your lender, and local nonprofits. Many nonprofits also provide counseling to help you compare options and fill out applications. Use these resources to find programs that suit your hardship and eligibility.
Consider legal advice
Get legal advice if you face foreclosure, have a complex financial situation, or need help understanding your rights. A real estate or bankruptcy attorney can explain options such as negotiating with your lender, using foreclosure prevention tools, or considering bankruptcy as a last resort. Legal guidance can help you choose next steps with a full understanding of the tradeoffs.
What experts are saying
Thomas Brock, CFA, CPA
“I’ve seen homeowners wait too long to contact their lender because they’re embarrassed about falling behind. By the time they reach out, the financial pressure has mounted, and their options are diminished. Avoid this pitfall. Make a phone call at the first sign of trouble and explain what’s causing the financial strain. Even if you ultimately don’t need relief or assistance, you’ll have a better understanding of your options and the steps to take if the situation worsens.”
Watch out for mortgage assistance grant scams
Scammers often target homeowners worried about missed mortgage payments, so treat unsolicited offers and “too good to be true” deals as warning signs. Legitimate mortgage assistance programs, especially federal ones, will not ask for money upfront. If a website or offer looks suspicious, report it to the Consumer Financial Protection Bureau, and look for official program information on sites and email addresses ending in “.gov” rather than “.com” or “.net.” If you’re considering refinancing, ignore unsolicited lender pitches and choose refinancing lenders based on your own research.
FAQs
Speak with a lender about your options. Start here
Eligibility for mortgage relief varies by program but typically includes homeowners experiencing financial hardship due to job loss, medical expenses, or economic downturns. To find out if you’re eligible, review the specific criteria of the mortgage relief program you’re interested in.
To qualify for mortgage relief or a mortgage assistance grant, you’ll need to demonstrate financial hardship and meet the criteria set by the lender or government agency offering the relief. This often involves submitting documentation of your income, expenses, and the reasons for your hardship.
Depending on the program’s specifics and how lenders report it, mortgage relief may have different effects on credit scores. While some programs may not impact your credit score, others might. It’s important to ask how a relief program may affect your credit score before you enroll.
If you’re three months behind on your mortgage, your lender may initiate the foreclosure process, and you’ll likely receive a notice of default. However, it’s important to contact your lender or mortgage servicer as soon as possible to discuss mortgage relief options that can help prevent foreclosure.
You can find more information about available mortgage assistance grants and mortgage relief through your lender, government agencies, non-profit organizations, housing counselors, and online resources.
The federal Homeowner Assistance Fund has closed in nearly all states. Today, the main options are your loan servicer’s loss-mitigation programs, FHA, VA, and USDA relief refinances, and counseling through your state housing finance agency or a HUD-approved counselor.
No, not in most places. The Treasury set September 30, 2026, as the deadline for programs to obligate remaining HAF funds, and nearly all state programs have closed. If you need help, contact your servicer about loss mitigation and your state housing finance agency for current programs.
Bottom line on mortgage assistance grants
Facing financial hardship can be overwhelming, but mortgage relief and mortgage assistance grants are available to help homeowners regain control and ensure stability.
If you’re an existing homeowner looking to reduce your monthly payment, compare refinancing options from various lenders to discover the best fit for your situation. Start your path to financial recovery by clicking the links below and taking the first step towards securing your home’s future.
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The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
By refinancing an existing loan, the total finance charges incurred may be higher over the life of the loan.