What Is Moratorium Relief? How Payment Pauses Work and What Applies Now

Moratorium relief is a temporary pause, set by law, a regulator, a court or a lender, that stops creditors from collecting a debt or enforcing a right for a fixed period. The debt is not cancelled. In the United States the moratorium most likely to matter today is HUD's rule for FHA-insured mortgages. After a presidentially declared major disaster, foreclosures stop for 90 days from the declaration date. HUD extended that pause for the January 2025 Los Angeles County wildfires on 6 March 2025, to 7 July 2025. The nationwide COVID-19 eviction and foreclosure moratoriums have ended.

What a moratorium is, and what it is not

A moratorium suspends enforcement. The obligation stays in place. Three things are often confused with it:

• Debt forgiveness cancels the obligation for good. A moratorium does not.
• Default is a breach of the contract. A moratorium is a sanctioned pause, so missing a payment covered by it is not treated as a breach while it lasts.
• Forbearance is a payment pause arranged account by account between a borrower and a lender or servicer. A moratorium is usually declared for a whole class of borrowers or properties at once. Some laws mix the two. The CARES Act gave borrowers a right to forbearance and also imposed a foreclosure moratorium.

A grace period is something else again. It is the short window in your loan contract after a due date, before a late fee applies. Its length is set by your note, not by a declared emergency.

How interest works during a pause

Whether interest keeps running depends on the program, not on the word "moratorium". Three real programs show how much it varies:

• CARES Act mortgage forbearance (US, 2020). Borrowers with federally backed mortgages could get forbearance "for up to 180 days", plus up to another 180 days on request. During it, the statute barred "fees, penalties, or interest beyond the amounts scheduled or calculated as if the borrower made all contractual payments on time". Normal scheduled interest was still owed. Penalty charges were not.
• US federal student loan payment pause. From 13 March 2020, payments were suspended and the interest rate was set to 0%. Interest started again on 1 September 2023, and payments resumed in October 2023.
• Reserve Bank of India moratorium. The RBI's 27 March 2020 regulatory package let lenders defer term-loan instalments due from 1 March 2020. The window was later extended to 31 August 2020, and interest kept accruing throughout. On 23 March 2021 India's Supreme Court refused to waive interest entirely, but it ruled that compound and penal interest for the moratorium period must not be charged. Any such interest already collected had to be refunded or credited.

A simple illustration of the arithmetic: on a $200,000 balance at 4% a year, interest is about $667 a month, or about $4,000 over six months. Whether that amount is added to the balance, spread over the remaining term or deferred to the end depends on the program and your servicer's terms.

Types of moratorium relief

Foreclosure moratoriums

The CARES Act barred servicers of federally backed mortgages from starting foreclosure "for not less than the 60-day period beginning on March 18, 2020". Vacant and abandoned properties were excluded. "Federally backed" means loans insured by FHA, insured or guaranteed by VA or USDA, made by USDA, or bought or securitised by Fannie Mae or Freddie Mac.

The rule still in force is FHA's disaster moratorium. Under HUD Handbook 4000.1, FHA-insured mortgages in a presidentially declared major disaster area get a 90-day foreclosure moratorium starting on the declaration date. It covers new foreclosures and ones already under way, and HUD can extend it for a particular disaster. Recent examples:

• Los Angeles County wildfires (January 2025). The moratorium was due to end on 8 April 2025. HUD extended it by 90 days to 7 July 2025, covering standard and reverse (HECM) FHA mortgages. HUD said the moratorium "prohibits mortgage servicers from initiating or completing foreclosure actions."
• Hurricanes Helene and Milton. HUD extended these moratoriums more than once, most recently to 10 July 2025 under Mortgagee Letter 2025-10. That date comes from trade-press reports; we did not check it against the letter itself.

Eviction moratoriums

• CARES Act Section 4024 (2020). For 120 days from 27 March 2020, landlords of covered properties could not file eviction cases for nonpayment. They also could not charge fees or penalties for the unpaid rent. After that, a tenant had to get at least 30 days' notice to vacate.
• CDC order. The CDC's nationwide eviction halt was published on 4 September 2020 and first ran to 31 December 2020. To qualify, tenants signed a declaration that included an income test (for example, expected 2020 income below $99,000 for an individual). Rent was still owed.
• The end. After several extensions, the Supreme Court ruled on 26 August 2021 in Alabama Association of Realtors v. HHS, 6 to 3, that the CDC likely lacked authority under 42 U.S.C. § 264(a). The Court said that "if a federally imposed eviction moratorium is to continue, Congress must specifically authorize it." Justice Breyer dissented, joined by Justices Sotomayor and Kagan.

Insurance moratoriums

Insurance moratoriums can protect policyholders directly. On 9 January 2025, California Insurance Commissioner Ricardo Lara issued Bulletin 2025-1 under Insurance Code section 675.1. It barred insurers from cancelling or non-renewing residential property policies because of wildfire risk in ZIP codes in or next to the Palisades and Eaton fire perimeters, until 7 January 2026. Homeowners and renters were covered whether or not they had a loss.

Corporate moratoriums

• United Kingdom. The Corporate Insolvency and Governance Act 2020 added Part A1 to the Insolvency Act 1986. It created a standalone moratorium that protects a struggling company from certain creditor enforcement. The initial period is 20 business days. Directors can extend it once by a further 20 business days by filing with the court, and longer extensions need creditor consent or a court order. Directors keep running the company, overseen by an insolvency practitioner acting as "monitor".
• United States. Filing a bankruptcy petition triggers an "automatic stay" under 11 U.S.C. § 362. It halts lawsuits against the debtor, enforcement of earlier judgments and attempts to take estate property.

Moratoriums in history

President Herbert Hoover proposed a one-year postponement of intergovernmental debts and reparations on 20 June 1931, during the Depression. The word is also used outside finance. Canada closed the northern cod fishery off Newfoundland and Labrador on 2 July 1992 and ended that moratorium on 26 June 2024.

How to check whether a moratorium applies to you

1. Identify who backs your loan. Federal moratoriums have usually covered only federally backed mortgages (FHA, VA, USDA, Fannie Mae, Freddie Mac). Your servicer can tell you which applies, and both Fannie Mae and Freddie Mac offer online loan lookup tools.
2. Check for a disaster declaration. If your area has a presidentially declared major disaster and your mortgage is FHA-insured, the 90-day foreclosure moratorium applies by rule. Ask your servicer for the end date and whether it has been extended.
3. Contact your servicer before you miss a payment. Ask how long the pause lasts, whether interest and fees accrue, and how the deferred amount will be repaid.
4. Get the terms in writing, including the repayment structure and how the account will be reported to credit bureaus.
5. Use a HUD-approved housing counselor. You can find one at hud.gov/findacounselor or by calling 800-569-4287. HUD says approved agencies cannot charge you for help exploring options if you are struggling with mortgage payments.

Credit reporting

During the COVID-19 emergency, the CARES Act changed the Fair Credit Reporting Act (15 U.S.C. § 1681s-2(a)(1)(F)). If a lender agreed to an accommodation, the account had to be reported as current if it was current before. If it was already delinquent, that status was kept unless the borrower caught up. The rule applied only during a covered period tied to the COVID-19 national emergency, so it is not a general protection today. Outside it, how a pause is reported depends on your agreement.

What happens when the pause ends

When the moratorium ends, the payments are due again. Programs and servicers handle the deferred amount in different ways: adding it to the balance, extending the loan term, a repayment plan, or a lump sum. Ask which options exist before the pause ends. If your income will not recover, a pause only delays the problem. A loan modification permanently changes your loan terms, and bankruptcy brings the automatic stay with lasting credit consequences. A housing counselor can help you compare these options.

Limitations: this guide covers mainly US programs plus selected UK and Indian examples, rules change with each declaration, and it is general information, not legal or financial advice.