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Payment Deferral Solutions

Overview

Payment deferral is a servicing relief and loss mitigation solution designed to resolve delinquencies and help homeowners remain in their homes. Payment deferrals address a unique hardship situation – homeowners with a resolved short-term hardship who are financially capable of resuming their previous mortgage payments, but who are unable to reinstate their mortgage or afford a repayment plan.

On March 29, 2023, the Single-Family Seller/Servicer Guide (Guide) Bulletin 2023-8 announced an expansion to the Payment Deferral Program. Under the expanded criteria, payment deferrals are available to eligible homeowners who are between 60-180 days delinquent; however, homeowners who are 30 days delinquent are ineligible. In addition, borrowers are no longer required to make consecutive monthly payments prior to completing a payment deferral. The mandatory effective date for these changes was October 1, 2023.

Workout Prospector® has not been updated with the new criteria. Servicers who are not yet using Resolve® can continue offering and settling pre-expanded payment deferral terms through Workout Prospector until they transition to Resolve®.

Freddie Mac will monitor Servicers’ requests for approving, offering and settling workouts that don’t align with program parameters (pre-expanded or expanded Payment Deferral Program terms). As a reminder, all quality assurance (QA) and related remedies still apply (e.g., Guide Section 3501.1(Opens a new window)).

Payment Deferral Programs

Freddie Mac offers three payment deferral solutions

Each Payment Deferral solution shares the following requirements:

  • A homeowner’s hardship has been resolved.
  • A repayment plan or full reinstatement of the mortgage is not a viable option to cure the delinquency.
  • Quality Right Party Contact (QRPC) has been established.
  • The homeowner has the financial capacity to continue making the existing contractual monthly mortgage payment and does not require a payment reduction.

Key Differences Between Payment Deferral Plans

Payment Deferral COVID-19 Payment Deferral Disaster Payment Deferral Payment Deferral
(Available as of July 1, 2023)
Evaluations must begin January 1, 2021 July 1, 2020 October 1, 2020 October 1, 2023
Hardship Eligible short-term hardship that has since been resolved COVID-19 related hardship that has since been resolved Disaster related hardship that has since been resolved Eligible short-term hardship that has since been resolved
Deferral term 2 months of deferred payment Up to 18 months of deferred payment Up to 12 months of deferred payment Up to 12 months of deferred principal and interest payments, including deferred amounts from previous non-disaster-related payment deferrals
Borrower eligibility Borrower must be 30- or 60- days delinquent and have made, at minimum, two consecutive monthly payments, resulting in the delinquency status remaining unchanged for at least three consecutive months. Current or less than 2 months delinquent as of March 1, 2020, the effective date of the National Emergency declaration related to COVID-19, and be equal to or greater than one month but less than or equal to 18 months delinquent as of the date of evaluation. Borrower must have been current or less than 60 days (i.e. less than two months) delinquent as of the date of the disaster. Borrower must be at least 60 days delinquent but less than or equal to 180 days delinquent as of the evaluation date.
Evaluation hierarchy
  • Reinstatement
  • Repayment plan
  • Payment Deferral
  • Flex Modification
  • Short sale
  • Deed-in-lieu of foreclosure
  • Reinstatement
  • Repayment plan
  • COVID-19 Payment Deferral
  • Flex Modification
  • Short Sale
  • Deed-in-lieu of foreclosure
  • Reinstatement
  • Repayment plan
  • Disaster Payment Deferral
  • Flex Modification
  • Short Sale 
  • Deed-in-Lieu of foreclosure 
  • Reinstatement
  • Repayment plan
  • Payment Deferral
  • Flex Modification
  • Short sale
  • Deed-in-lieu of foreclosure
Learn more

Guide Bulletin 2020-6

Guide Bulletin 2021-8 COVID-19 Servicing: Guidance for Helping Impacted Borrowers Guide Bulletin 2020-28 Guide Section 9203.26 Disaster Relief Guide Bulletin 2023-8