Financial Assistance Options for Mortgage Payments

If you can't make your mortgage payments, the best thing you can do is to stay ahead of the game. Research your options and take action before it's too late.

Choose Your Debt Amount

Home > Real Estate > How to Get a Mortgage > Financial Assistance Options for Mortgage Payments

If homeownership is the American Dream, then foreclosure is the national nightmare. Though the nation’s foreclosure rate dropped dramatically after the Great Recession, the coronavirus reminded consumers what happens to those who lose jobs, see work hours reduced or suffer health problems that make once affordable monthly payments impossible.

Before COVID-19 crippled the U.S. economy, the Mortgage Bankers Association (MBA) estimated about 250,000 property owners enter foreclosure each month and that one child in every U.S. classroom is part of a family at risk of losing its home.

Those numbers could skyrocket as nearly 80% of Americans live paycheck to paycheck, making them especially vulnerable to a financial emergency that could derail their mortgage payments.

If you enter such an emergency, it’s important to take charge of the situation, contact your lender and immediately begin looking for help with your mortgage payment.

Homeowner Assistance for Victims of COVID-19

The federal government offered the first bit of help for homeowners through the Federal Housing Authority (FHA), and Fannie Mae and Freddie Mac, the government lending agencies that back 29 million homeowner mortgages.

Fannie Mae and Freddie Mac said eligible homeowners – those who have lost income because of the coronavirus – could have mortgage payments suspended or reduced for up to 12 months. They also said they would suspend foreclosure and evictions.

That move protects about half the homeowners in the U.S.

The private lending industry, which includes banks, finance companies, servicers and mortgage investors, has proposed a similar forbearance policy that would suspend payments for three months if the coronavirus has reduced a homeowner’s income, made them ill or kept them from working. That policy could be extended to 12 months, if the health and financial impact of COVID-19 extend indefinitely.

The mortgage industry is trying to avoid a repeat of the housing catastrophe that came with the Great Recession of 2008. There were 2.2 million homes foreclosed that year. The total went up to 2.8 million in 2009 and hit a record-high 2.9 million in 2010, according to RealtyTrac.

The bottom line to the crisis is this: If you can afford to make your housing payment, make it.

If you are struggling to make it, contact your lender or servicing company and see what avenues are available for debt relief.

When You Can’t Pay Your Mortgage

If you own your home, it is more than shelter, it is probably your biggest asset. It’s also likely getting a mortgage is your biggest debt. Paying the mortgage in hard times might seem impossible but losing an investment that took years to build could turn out to be the biggest financial mistake of your life.

Worse still, allowing your home to go into foreclosure will devastate your credit rating. It will impede your ability to borrow and leave a black mark on your credit history that could take years to erase. It’s imperative to consider every option to keep the mortgage payments flowing.

Fortunately, you can prevent foreclosure, but you must take the initiative. Lenders know there are many reasons why borrowers can’t pay their mortgages:

  • Job loss
  • Illness or injury that prevent you from working
  • Death of a spouse
  • Divorce or separation
  • Medical debt

Though lenders insist that you make payments, they are often willing to make accommodations.

You should consider contacting a nonprofit credit counseling agency for information about dealing with mortgage and other debt.

If you completely stop paying your mortgage what happens is certain: You will lose your home. But there are ways to reduce payments in emergencies, and your lender will probably be ready to discuss them with you. It’s important that you provide evidence of your ability to resume making payments after a short-term crisis has passed.

If you lack a plan, or your income has fallen below what is needed to pay your mortgage long term, it is less likely a lender will offer relief.

Mortgage Loan Modifications

You need to contact your lender right away and honestly explain why you can’t keep up with your payments. Remember that your lender is your partner in homeownership. Though your name is on the deed, the lender probably provided most of the money you needed to buy your home and has a right to take it from you if you fail to live up to your end of the deal.

Home loan modifications are one way to avoid foreclosure. Modifications are especially valuable for those who can refinance due to a change in financial status. A modification adjusts the terms of your mortgage to make it easier to repay, at least in the short term.

There are different modification approaches, including reduced interest rates, a longer repayment period, lowering the remaining principal owed or a plan that adds missed loan payments to the balance owed. Your lender will tell you what options are available. You should also review modification strategies so you’re prepared to discuss the alternatives and know which one might work best for you.

Government Assistance with Mortgage

Although the federal government still provides some help to homeowners struggling to make mortgage payments, key assistance programs launched during the housing market meltdown a decade ago have expired.

For information on help that might be available contact a federal Housing and Urban Development office in your area, visit the agency’s website or contact a state social services office. HUD and other agencies offer mortgage payment grants to homeowners with hardships.

Charities That Help with Mortgage Payments

Some charities help with mortgage payments. Each has its own eligibility requirements, so you need to discuss your situation with the charity to learn if you qualify for assistance. In some instances, the charities refer you to other organizations that might be able to help.

Here are a few groups to consider:
  • The United Way. United Way has local chapters throughout the country that offer advice and sometimes emergency financial assistance. You can reach the agency’s hotline by dialing 2-1-1. In addition to housing help, the agency provides aid finding food, employment and healthcare.
  • Catholic Charities. Though part of the Catholic Church, this agency assists people of all religions, races and backgrounds. Catholic Charities offers emergency financial aid and a counseling program to help homeowners find long-term remedies for their financial problems.
  • Salvation Army. The Salvation Army has a storied history providing aid to the needy. In some instances, it offers emergency rent and mortgage aid. Homeowners need to show that they have received a foreclosure notice from their mortgage lender and demonstrate that they will have enough income to resume repaying their mortgage after the crisis passes.
  • Vincent de Paul Society. This is a ministry in some Catholic churches. SVDP provides emergency assistance to those coping with a crisis. This can include mortgage aid, help locating employment and transportation assistance.
  • Local Charities. An assortment of church groups offer aid. If you are a member of a congregation, ask what might be available. Also consider community action agencies, an assortment of groups throughout the country that work with government programs and charities to help the needy.
  • Family and friends. This can be a tricky and should be a last resort. Family and friends probably would provide the best terms and payoff rate, but if things go sour, it usually is the end of the friendship or a real burden on the family. If you go this route, draw up a clear repayment plan and stick with it.

Keep in mind that many charities have limited money to help. As housing prices have increased in recent years, so have monthly mortgage payments. If you have a large monthly payment, you might find it difficult to find an agency with the funds to help.

Avoid Foreclosure Scams

Con artists are an imaginative group who are constantly looking for ways to trick people out of their money. They especially like to target people with financial difficulties who might not be thinking as clearly as they ought to be. To avoid being taken in by a foreclosure relief scam, don’t trust callers who offer deals that seem to good to be true or offer to cure your mortgage problems for a fee.

To avoid mortgage scams, become familiar with tactics the scammers use. HUD operates a program in conjunction with several other groups to help homeowners identify scams and report them. For information, call NeighborWorks America at (888) 995-HOPE (4673) at any time.

Some mortgage scams seem so obvious that you might wonder who could fall for them, but people in distressed situations are sometimes extremely gullible. If someone says they will handle your mortgage problems for a fee, or claims to represent a mortgage prevention expert who will talk to you for a fee, beware.

Other pitches to view suspiciously include an unsolicited call from someone who claims to represent your mortgage lender and starts asking you for sensitive financial information, or someone without credentials who offers to help you get back on track if you sign over your deed.

Always ask for credentials and investigate. If you are sure you’re dealing with a fraudster, call NeighborWorks or a law enforcement agency.

About The Author

Bill Fay

Bill “No Pay” Fay has lived a meager financial existence his entire life. He started writing/bragging about it in 2012, helping birth into existence as the site’s original “Frugal Man.” Prior to that, he spent more than 30 years covering the high finance world of college and professional sports for major publications, including the Associated Press, New York Times and Sports Illustrated. His interest in sports has waned some, but he is as passionate as ever about not reaching for his wallet. Bill can be reached at [email protected].


  1. NA, ND. Tips for Avoiding Foreclosure. Retrieved from:
  2. NA, (2019, March 22) Foreclosure. Retrieved from:
  3. Mancini., J. (ND) Charities That Help with Mortgage Payments. Retrieved from:
  4. NA (2017, September 12) Foreclosure Prevention – Consumer Resources. Retrieved from: