Mortgage Forbearance Is A Lifeline for Struggling Homeowners
When unexpected hardship hits, homeowners can quickly find themselves unable to keep up with mortgage payments. Whether it’s a job loss, illness, natural disaster, or other financial emergency, knowing where to turn can make all the difference. One of the most effective relief tools available is mortgage forbearance—a program that temporarily pauses or reduces payments to help borrowers stay in their homes and avoid foreclosure.
Mortgage forbearance is not new, but its visibility surged during the COVID-19 pandemic when nearly 8 million homeowners took advantage of CARES Act protections. The forbearance wave that followed helped prevent a foreclosure crisis on the scale of the 2008 housing collapse. Since then, usage has declined significantly. As of March 2025, just 0.36% of mortgages—about 180,000 loans—were in forbearance, most tied to temporary hardships like unemployment, illness, or disaster-related damages.
While fewer homeowners are currently in need of forbearance, policymakers and housing advocates continue to highlight its long-term benefits. A recent study by the Urban Institute suggests broader awareness and access to forbearance programs could help prevent tens of thousands of foreclosures each year. In a shifting economy, mortgage forbearance remains a critical safety net.
To qualify, homeowners must request forbearance before missing payments. The process requires demonstrating a temporary hardship and discussing repayment options with their mortgage servicer. Common qualifying scenarios include storm damage, medical emergencies, job loss, disability, divorce, or the death of a co-borrower. However, forbearance is not guaranteed—borrowers with inconsistent payment histories or low credit scores may be denied and should explore alternatives such as loan modification or selling the property.
It is important to understand that forbearance is not forgiveness. Payments missed during forbearance must eventually be repaid, with interest. Lenders typically offer one of several repayment plans: reinstatement, which requires a lump-sum payment at the end of the forbearance period; installment plans that temporarily raise monthly payments; or deferral, which tacks the missed payments onto the end of the loan. In more serious cases, borrowers may be able to modify their loan terms or consider selling the home to avoid default.
Forbearance terms can vary significantly depending on the loan type. Government-backed mortgages—such as those backed by the VA, FHA, Fannie Mae, or Freddie Mac—often come with specialized forbearance options, especially in the wake of major natural disasters. These programs typically include suspension of late fees, foreclosure protection, and flexibility at the end of the forbearance period. During the pandemic, the CARES Act allowed qualifying borrowers to pause payments for up to 18 months with no penalties, and many had the option to defer missed payments or add them to a second loan.
Homeowners considering forbearance should ask their lender important questions before enrolling: How long will forbearance last? Will monthly payments be completely paused or only reduced? How will the lender report the forbearance to credit bureaus? What are the repayment options? Understanding the answers can help borrowers make the best decision for their situation.
Though mortgage forbearance is generally not harmful to credit if borrowers follow agreed-upon terms, it may still be reported to credit agencies. Fortunately, it is far less damaging than foreclosure, which can severely impact a borrower’s ability to qualify for future loans.
Forbearance and deferment are often confused. While forbearance typically lasts a year or less and includes a set repayment plan, deferment may extend payment delays up to three years, often requiring repayment only when the home is sold or refinanced. In some cases, deferment may be used as a repayment method after forbearance ends.
Ultimately, mortgage forbearance is not a long-term solution but a temporary bridge during a time of crisis. When used responsibly, it offers homeowners the breathing room they need to recover financially, protect their credit, and stay in their homes. For those facing hardship, the first step is a conversation with their mortgage servicer—before falling behind.