What Is Mortgage Forbearance? How It Works, Who Qualifies, and What It Means for 2025 Homeowners

Thinking about buying or selling a home in Boise and wondering how mortgage forbearance fits into the picture? Whether you’re recovering from a financial setback or just curious about how this program affects the real estate market, this guide will walk you through what mortgage forbearance really is, how it works, and what it means for buyers and sellers right here in the Treasure Valley.

🏡 What Is Mortgage Forbearance?

Mortgage forbearance is a temporary pause or reduction in your monthly mortgage payments, typically granted by your lender during times of financial hardship—think job loss, medical emergencies, or even natural disasters. It’s not free money, and it’s not loan forgiveness. It’s more like a “timeout” to help you catch your financial breath.

During the COVID-19 pandemic, forbearance took center stage, with nearly 8 million homeowners taking advantage of a federal program offered through the CARES Act. Fast-forward to 2025, and only about 0.36% of mortgages are still in forbearance. But for those who need it, this program can be a real lifeline.

✅ Who Qualifies for Mortgage Forbearance?

Qualifying for mortgage forbearance typically involves showing proof of a short-term hardship, such as:

• Job loss or reduction in income

• Medical emergencies

• Divorce or separation

• Property damage due to a natural disaster

To apply, borrowers should contact their mortgage servicer before missing any payments and be prepared to provide documentation of the hardship, income, and expenses.

📉 Mortgage Forbearance and the Boise Real Estate Market

In Boise and other markets, mortgage forbearance has helped prevent a flood of foreclosures. During the pandemic, studies estimated that over 500,000 homeowners avoided foreclosure thanks to these programs. This stability helped support home values and limited sudden spikes in inventory.

But it’s not all smooth sailing. Some homeowners still face long-term challenges. If they can’t resume payments or qualify for a loan modification, selling their home may be the best option—especially in markets like Boise, where rising home values have created strong equity positions for many.

🔄 What Happens After Forbearance Ends?

Once the forbearance period ends, homeowners must start repaying missed payments.

This can happen in a few different ways:

• Reinstatement – One big lump-sum payment

• Installments – Gradual repayment through higher monthly payments

• Deferral – Add missed payments to the end of the loan term

• Loan modification – Lender adjusts terms to make payments more manageable

• Selling the home – Use equity to repay what’s owed and avoid foreclosure

If you’re thinking about selling while in forbearance, be sure to inform your real estate agent, as payoff amounts may be higher than expected due to accrued interest or fees.

🧾 Credit Score Impact and Buyer Confidence

Good news: If handled properly, mortgage forbearance won’t tank your credit. According to Experian, as long as you stick to the repayment agreement, your credit score shouldn’t take a major hit. It’s definitely a better alternative than foreclosure.

However, forbearance can impact buyer confidence. A wave of forbearance in a particular area may raise eyebrows and create uncertainty. That’s where an experienced agent comes in—helping buyers evaluate property condition, local trends, and market strength.

🧭 Final Thoughts: Navigating Forbearance in Boise

Mortgage forbearance isn’t a bad word—it’s a tool. One that, when used properly, can protect families, prevent foreclosures, and even support the larger housing market.

Here in Boise, we’ve seen how forbearance programs have helped homeowners stay in their homes and kept the market from sliding. Whether you’re navigating your own financial situation or considering a home purchase in a changing landscape, understanding forbearance is essential.

📲 Need Help Buying or Selling a Home While in Forbearance?

I help Boise buyers and sellers navigate complex situations like forbearance and foreclosure alternatives every day. If you’re unsure of your next step, reach out for a free consultation and let’s create a plan that fits your goals.

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