Mortgage Relief and Mortgage Assistance Programs | 2024

By: Maggie Overholt Updated By: Ryan Tronier Reviewed By: Paul Centopani
March 13, 2024 - 13 min read

What mortgage relief options are available in 2024?

Mortgage relief programs provide hope to homeowners struggling to make their mortgage payments because of unanticipated circumstances such as job loss, medical bills, or economic downturns.

Mortgage assistance refers to a range of solutions, including loan modification, forbearance agreements, and refinancing opportunities. By easing financial burdens, they are intended to make mortgage obligations more manageable.

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What is mortgage relief?

Mortgage relief refers to a broad range of initiatives and measures to help homeowners facing financial difficulties manage their mortgage payments more effectively. These challenges may arise from unexpected life events, such as job loss, illness, or other economic hardships that impact a homeowner’s ability to keep up with their mortgage payments.

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Mortgage relief seeks to provide homeowners with temporary or permanent solutions to avoid foreclosure, allowing them to minimize their financial losses while either staying in their homes or paying off their home loans.

Where can you find mortgage relief programs?

You can find mortgage relief through state and federal government programs, non-profit organizations that specialize in housing assistance, and services offered directly by lenders or mortgage servicers.

Your first stop in exploring mortgage relief options, whether at the federal or state level, should be the Department of Housing and Urban Development (HUD). is a valuable resource that maintains a comprehensive list of HUD-approved housing agencies in every state.

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In addition, you can look into local homeowner assistance funds and housing counseling services offered by these approved agencies. The purpose of these HUD resources is to offer affordable housing to both renters and homeowners.

How does mortgage relief work?

Mortgage relief works by adjusting the terms of a homeowner’s mortgage agreement to address and alleviate financial stress. The process typically begins with the homeowner reaching out to their lender or a housing counselor to discuss their situation and explore available mortgage assistance options.

For example, consider a homeowner struggling with unemployment due to an economic downturn. They could apply for a forbearance program through their lender, temporarily suspending mortgage payments while they seek new employment. During the forbearance period, interest may still accrue, but the homeowner avoids foreclosure.

Once they secure a new job, they work with their lender to resume payments and discuss options for repaying the accrued amount, possibly extending the loan term to keep monthly payments manageable.

Mortgage relief vs mortgage assistance

While the terms “mortgage relief” and “mortgage assistance” are often used interchangeably in this guide, they can represent subtly different facets of homeowner support:

  • Mortgage relief generally refers to a broad set of strategies and programs aimed at modifying or temporarily changing the terms of an existing mortgage to prevent foreclosure. This includes loan modification, forbearance, and refinancing options directly negotiated with lenders or through legal mechanisms.
  • Mortgage assistance, on the other hand, often points more specifically to external support mechanisms, such as financial aid from government programs, grants, interest-free loans, or counseling services. These resources provide the financial support or advice necessary to navigate mortgage challenges, rather than altering the mortgage terms themselves.

In order to assist homeowners in managing their mortgages during difficult financial circumstances, both mortgage relief and mortgage assistance are important.

The best course of action will likely involve both but will vary depending on the borrower’s circumstances, including their personal finances, the type of mortgage, and their eligibility for assistance.

Types of mortgage relief programs

A number of mortgage assistance options may be available to homeowners when they encounter financial challenges. By understanding the specifics of each type of mortgage relief option, you can identify the best course of action to alleviate mortgage-related financial stress.

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Mortgage loan modification

A mortgage loan modification involves altering the terms of your existing home loan to make the monthly payments more manageable. Options will vary by lender, but they can include:

  • Changing the type of loan
  • Extending the loan term
  • Reducing mortgage interest rates
  • Lowering the monthly payment

Modifications are intended for homeowners who wish to keep their homes but are struggling with their current mortgage payments, typically due to a significant change in their financial situation. The goal of a loan modification is to achieve a monthly payment that the homeowner can afford over the long term.

Mortgage loan refinance

Refinancing your mortgage means replacing your existing mortgage with a new loan, typically to take advantage of lower interest rates or to extend the repayment period. This can result in lower monthly payments, a shorter loan term, or the ability to tap into home equity for large expenses.

There are a variety of refinance programs available, and some of them are tailored to help people who are struggling financially get better terms and lessen their financial burdens.

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Mortgage forbearance

Forbearance is an agreement with your lender that temporarily reduces or suspends your mortgage payments for a certain period of time. It’s designed for homeowners experiencing a temporary financial hardship, offering time to regain financial stability without the immediate threat of foreclosure.

At the end of the forbearance period, you’ll need to repay the missed payments, but lenders often work with borrowers to establish a feasible repayment plan.

Financial Aid

Distressed homeowners may be eligible for a variety of mortgage relief programs with their lender, the federal government, or local governments. Each type is designed to address specific financial challenges homeowners might face. Here’s a closer look at some of the options:


Mortgage relief grants are funds provided to homeowners that do not require repayment. Grants can be used to cover mortgage payments directly, which helps individuals avoid delinquency and foreclosure. Government entities or non-profit organizations often offer grants to help specific groups, such as low-income families or veterans.

Interest-free loans

Mortgage assistance loans are an affordable choice for homeowners in need since they offer short-term financial help without the burden of interest payments. Interest-free loans must be repaid over time, but the absence of interest may significantly decrease the total amount due.

Waiving fees

Lenders may offer to waive certain fees associated with mortgages, such as late fees, application fees, or even some closing costs for refinancing. This mortgage relief option reduces the overall financial burden on the homeowner, making it easier to manage mortgage payments or the costs of refinancing.

Second mortgage or equity loan

For homeowners with equity in their homes, taking out a second mortgage or a home equity loan can provide a lump sum of cash. This can be used to cover immediate financial needs, including existing mortgage payments. While this option can offer relief, it’s important to consider the additional debt and ensure the terms are manageable.

Each type of financial aid is designed to help homeowners keep their homes by covering mortgage payments, utility bills, and other related expenses during times of financial hardship. Availability and eligibility may change depending on the homeowner’s unique situation and the area in which they live.

Loan counseling

Loan counseling services provide valuable guidance and advice for struggling homeowners. These services, provided by HUD-approved counseling organizations, can assist you in comprehending your options, creating a budget, and even negotiating with lenders.

Housing counselors are knowledgeable about the various mortgage relief programs and can assist in navigating the application processes.

4 Mortgage assistance options

Even if aid programs for homeowners in need of mortgage relief might not be as easily accessible as they were at the height of the coronavirus pandemic, there are still a number of worthwhile choices available.

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Regardless of whether you’re experiencing the lingering impact of COVID-19-related financial hardship, unexpected unemployment, or other challenging financial events, take into consideration the following options.

1. Talk to your mortgage lender or servicer

Mortgage lenders and loan servicers customize their assistance programs with different eligibility requirements to suit a range of demands.

If you’re having trouble paying your mortgage each month, getting in touch with your mortgage company may help you uncover a few solutions. A brief deferment, which enables you to stop making payments without being penalized, or changes to your interest rate or payment schedule that better suit your present financial circumstances are examples of possible options.

Lenders have a vested interest in seeing their clients through difficult times, and they are typically cooperative in resolving issues.

The type of help that is available to you may also depend on the terms of your loan. For instance, borrowers with loans guaranteed by the US Department of Veterans Affairs can opt to meet with a VA loan counselor for advice tailored to their individual circumstances.

2. Explore federal government and state assistance programs

There are several government agencies that offer assistance with mortgage payments, including federal, state, and municipal programs.

Homeowner Assistance Fund (HAF)

In 2021, the American Rescue Plan Act established the Homeowner Assistance Fund to offer housing payment assistance to homeowners facing foreclosure or delinquency.

Eligible homeowners who receive HAF funds can use them to catch up on past-due mortgage payments. They can also pay other housing-related bills. These include homeowners insurance, property taxes, utilities, partial claims, past-due housing association fees, and even home repairs.

The U.S. Department of Treasury is responsible for overseeing the HAF program. Additionally, some states—like West Virginia and California—continue to provide funding to eligible homeowners even though it is closed in many others—like Alabama, Texas, and Michigan. To find out if HAF is open in your state, visit the Consumer Financial Protection Bureau (CFPB), which offers additional information in both Spanish and English.

State and local mortgage relief programs

There may also be state-specific mortgage relief alternatives available, with some offering grants and others offering deferred loans. Look into the options in your state and see if there are any extra resources at the county or city level.

The best place to start is by visiting your local housing finance agency. For example, residents of Illinois can contact the Illinois Housing Development Authority (IHDA), while Californians can reach out to the California Housing Finance Agency (CalHFA) for additional information about mortgage assistance available to them.

3. Consult with a housing counselor

A HUD-approved counseling agency in your state may know about some mortgage assistance programs that are available in your community.

Housing counselors know about local government and non-profit agencies that can offer mortgage relief. In addition, HUD-approved housing counseling agencies usually offer foreclosure prevention counseling for free.

4. Refinance your home loan

Loan refinance programs are specifically designed to help homeowners adjust their existing mortgage to more favorable terms. These programs can provide mortgage relief by lowering monthly payments, reducing interest rates, or changing the mortgage term.

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There are two distinct options for mortgage relief available to homeowners with conforming loans, such as those from Freddie Mac or Fannie Mae.

Fannie Mae RefiNow

Fannie Mae’s RefiNow program is designed to assist homeowners who may not have been able to refinance their mortgage under conventional criteria. RefiNow offers a minimum 0.5% interest rate reduction in addition to covering home appraisal fees in the event that one is necessary.

To qualify, borrowers must have:

  • Fannie Mae-backed mortgage
  • Household income is at or below 80% of the area median income
  • History of on-time mortgage payments

Freddie Mac Refi Possible

Similarly, Freddie Mac’s Refi Possible program is designed to help low- to moderate-income homeowners refinance their mortgages. Refi Possible reduces monthly mortgage payments and interest rates, with a minimum interest rate reduction of 0.5%.

Furthermore, Refi Possible allows borrowers to roll closing costs into the loan amount, which makes the refinancing process more affordable.

To qualify, borrowers must have:

  • Freddie Mac-backed single-family mortgage
  • Household income is at or below 80% of the area median income
  • Timely payment history

Streamline refinancing

Homeowners with government-backed FHA, VA, and USDA mortgages have access to different mortgage programs than those with conventional loans. Namely, they can use a Streamline Refinance.

The Streamline Refinance is similar to a mortgage relief refinance because you can use it even if your primary residence has negative equity. (Some people call this being “underwater” on their loan.)

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And a Streamline Refinance has other benefits, too.

  • There’s less paperwork. You usually won’t have to re-verify your income and employment or get the home appraised
  • U.S. government-backed loans typically have below-market mortgage interest rates
  • Closing costs are typically cheaper

Homeowners can qualify for an FHA Streamline if they’ve made at least three consecutive on-time payments on their existing FHA loan.

Even if you make your three consecutive payments while in forbearance, you may qualify for FHA Streamline refinancing. The Department of Housing and Urban Development (HUD), which oversees the Federal Housing Administration, is one of the more lenient housing agencies.

For a VA Streamline Refinance (also called the “IRRRL”), the rules are more lenient. You can use this refinance even if your current loan is delinquent. However, the lender must verify that the reason for delinquency has been resolved and that you’ll be able to make payments on the new loan.

What to do when you can’t pay your mortgage

Finding yourself in a situation where you can’t make your mortgage payment can be incredibly stressful. It’s important to understand that you have choices and can take action to improve the situation.

The secret to getting through financial difficulties that disrupt your ability to pay your mortgage is to move swiftly but carefully.

Communicate with your lender

The first and most important step is to get in touch with your lender as soon as you realize you might have trouble making your mortgage payment. Many homeowners may hesitate to do this, fearing negative repercussions. Lenders, on the other hand, may have options you are unaware of and have a strong incentive to keep you in your house. This can include forbearance, loan modification, or other relief programs designed to temporarily reduce or suspend payments until your financial situation improves.

Review your budget

Take a thorough look at your finances and budget. Identifying areas where you can cut expenses or redirect funds towards your mortgage can provide temporary relief.

Sometimes, a closer examination of your spending can reveal opportunities to adjust and prioritize your mortgage payments. This process might also help in gathering the necessary documentation that lenders could require to offer assistance.

Explore mortgage assistance programs

Multiple mortgage relief programs exist at the federal and state levels, as well as with your lender, to assist homeowners during challenging financial times.

Additionally, non-profit organizations may provide counseling and assistance to help you navigate your mortgage relief options and apply for programs for which you may be eligible.

If your financial situation is particularly complex or if you’re facing foreclosure, seeking legal advice might be a prudent step. Lawyers specializing in real estate or bankruptcy can offer guidance on your rights and options, including negotiating with lenders, navigating foreclosure prevention measures, or exploring bankruptcy as a last resort.

Legal counsel can provide clarity on the implications of different choices and help you make informed decisions about your next steps.

Watch out for mortgage relief scams

Unfortunately, individuals worried about mortgage defaults are often targets for scammers. Homeowners should be vigilant against unsolicited offers and deals that seem excessively favorable.

Legitimate benefit programs, particularly those from the federal government, will not require homeowners to pay money upfront. If a website raises your suspicions of being a scam, it’s important to report it to the Consumer Financial Protection Bureau. When exploring federal or state programs, be aware that web and email addresses ending in ".gov” are typically affiliated with the government, whereas those ending in ".com” or ".net” may not be official government sites.

For homeowners considering refinancing and unsure of which lender to choose, it’s advisable to steer clear of unsolicited offers. Instead, make your selection of refinance lenders based on personal research and preferences.

FAQ: Mortgage relief

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Who is eligible for mortgage relief?

Eligibility for mortgage relief varies by program but typically includes homeowners experiencing financial hardship due to job loss, medical expenses, or economic downturns. To find out if you’re eligible, review the specific criteria of the mortgage relief program you’re interested in.

How do I qualify for mortgage relief programs?

To qualify for mortgage relief programs, you’ll need to demonstrate financial hardship and meet the criteria set by the lender or government agency offering the relief. This often involves submitting documentation of your income, expenses, and the reasons for your hardship.

Does mortgage relief affect credit scores?

Depending on the program’s specifics and how lenders report it, mortgage relief may have different effects on credit scores. While some programs may not impact your credit score, others might. It’s important to ask how a relief program may affect your credit score before you enroll.

What happens if you're three months behind on your mortgage?

If you’re three months behind on your mortgage, your lender may initiate the foreclosure process, and you’ll likely receive a notice of default. However, it’s important to contact your lender or mortgage servicer as soon as possible to discuss mortgage relief options that can help prevent foreclosure.

Bottom line on mortgage assistance

Facing financial hardship can be overwhelming, but mortgage relief options are available to help homeowners regain control and ensure stability.

Compare refinancing options from various lenders to discover the best fit for your situation. Start your path to financial recovery by clicking the links below and taking the first step towards securing your home’s future.

Time to make a move? Let us find the right mortgage for you

Maggie Overholt
Authored By: Maggie Overholt
The Mortgage Reports contributor
Maggie Overholt is a former Editor at The Mortgage Reports, where she helps make complex topics more approachable. She has also written for publications specializing in insurance and personal finance.
Ryan Tronier
Updated By: Ryan Tronier
The Mortgage Reports Editor
Ryan Tronier is a personal finance writer and editor. His work has been published on NBC, ABC, USATODAY, Yahoo Finance, MSN Money, and more. Ryan is the former managing editor of the finance website Sapling, as well as the former personal finance editor at Slickdeals.
Paul Centopani
Reviewed By: Paul Centopani
The Mortgage Reports Editor
Paul Centopani is a writer and editor who started covering the lending and housing markets in 2018. Previous to joining The Mortgage Reports, he was a reporter for National Mortgage News. Paul grew up in Connecticut, graduated from Binghamton University and now lives in Chicago after a decade in New York and the D.C. area.