Section 3550.207 - Payment moratoriumRHS may defer a borrowers scheduled payments for up to 2 years. NP borrowers are not eligible for a payment moratorium.
(a)Borrower eligibility. For a borrower to be eligible for a moratorium, all of the following conditions must be met:(1) Due to circumstances beyond the borrower's control, the borrower is temporarily unable to continue making scheduled payments because:(i) The borrower's repayment income fell by at least 20 percent within the past 12 months;(ii) The borrower must pay unexpected and unreimbursed expenses resulting from the illness, injury, or death of the borrower or a family member; or(iii) The borrower must pay unexpected and unreimbursed expenses resulting from damage to the security property in cases where adequate hazard insurance was not available or was prohibitively expensive.(2) The borrower occupies the dwelling, unless RHS determines that it is uninhabitable.(3) The borrower's account is not currently accelerated.(b)Reviews of borrower eligibility.(1) Periodically RHS may require the borrower to submit financial information to demonstrate that the moratorium should be continued. The moratorium may be canceled if:(i) The borrower does not respond to a request for financial information;(ii) RHS receives information indicating that the moratorium is no longer required; or(iii) In the case of a moratorium granted to pay unexpected or unreimbursed expenses, the borrower cannot show that an amount at least equal to the deferred payments has been applied toward the expenses.(2) At least 30 days before the moratorium is scheduled to expire, the borrower must provide financial information needed to process the re-amortization of the loan(s).(c)Resumption of scheduled payments. When the moratorium expires or is cancelled, the loan will be re-amortized to include the amount deferred during the moratorium and the borrower will be required to escrow. If the new monthly payment, after consideration of the maximum amount of payment subsidy available to the borrower, exceeds the borrower's repayment ability, all or part of the interest that has accrued during the moratorium may be forgiven so that the new monthly payment optimizes both affordability to the borrower as well as the best interest of the Government.61 FR 59779, Nov. 22, 1996, as amended at 87 FR 6773, Feb. 7, 2022