The Federal Housing Administration (FHA) has published Mortgagee Letter 2025-06, which extends COVID-19 recovery options through February 2026, allowing more time for stakeholders to adapt to new policies.
These updates to FHA’s permanent loss mitigation options reflect feedback from previous proposals and address the changing needs of borrowers post-COVID-19, enhancing existing repayment and forbearance policies.
New guidelines require borrowers to attest to the affordability of modifications and ensure a successful completion of a three-month trial payment plan before finalizing changes.
The extension and updates made in the ML have been positively received by key industry groups such as the Mortgage Bankers Association, emphasizing the need for supportive policies during recovery.
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