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What Is a Forbearance Mortgage?

what is a loan forbearance

Using a forbearance can help you meet your monthly obligations and get back on track.

The Basics

Forbearance involves a repayment plan that reduces your monthly payment or suspends payments for several months. Eligibility varies by lender, but typically it requires an evaluation of the borrower's household finances, including income, assets, monthly expenses and financial hardship. Borrowers who experience a reduction in income, loss of employment or increase in expenses for reasons beyond their control may qualify for a forbearance if they demonstrate that the situation is temporary, they can afford to repay the deferred amount and can resume regular payments when their situation improves.


The rules surrounding forbearance eligibility depend on the loan type. For example, most home loans are backed by Fannie Mae or Freddie Mac -- federally chartered mortgage finance corporations. Lenders must adhere to Fannie and Freddie guidelines when considering a loan for forbearance.

Lenders for loans insured by the Federal Housing Administration adhere to the Department of Housing and Urban Development's forbearance rules. Making Home Affordable, an initiative by the government to help distressed homeowners, has its own set of guidelines for the more than 100 mortgage lenders that participate in its programs.

Important Distinctions

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