The challenges of maintaining a secure hold on one’s financial responsibilities are heightened during periods of active duty.
Mortgage payments in particular can become a significant hurdle. But active duty and recently discharged service members are protected from a host of civil and financial penalties thanks to a unique law.
Explaining the SCRA
The Service Member’s Civil Relief Act was established to insulate active duty service members from foreclosure and help them maintain solid financial standing after serving our country. Formerly known as the Soldiers and Sailors Civil Relief Act, the SCRA extended protection to Reservists and members of the National Guard.
There are certain housing provisions that apply to deployed military members:
- Interest rates on mortgages may be capped at 6 percent during the period of deployment, and all overage will be forgiven.
- In certain situations, when this is not enough, mortgage lenders may agree to a postponement of principal loan payments.
- Mortgage lenders may not foreclose or seize property due to an unpaid mortgage debt while the service member is on active duty.
A service member’s inability to meet a mortgage obligation must be related to military service in order to be eligible for SCRA protections. Also, the protection is not automatic; service members must invoke the act. In addition, all mortgages must be prior to the serviceman’s call to active duty.
The program’s benefits may be invoked once orders to active duty have been received. The SCRA, to ease the transition back into civil life, grants servicemen an additional three months of protection against foreclosure at the end of their service.
Service members who wish to utilize their protection must send to their lender:
- A copy of the military orders to active duty
- Evidence that the debt precedes the activation date
- Federal Housing Authority (FHA) case number
Protections for Renters
But it’s not just homeowners who benefit from the SCRA. Service members who rent are protected against eviction while on active duty, provided their rent falls under a certain threshold.
Those who receive permanent change of station orders or who are deployed to a new locale for at least 90 days also have the right to terminate a housing lease.
Military members and their dependents who desire more information about the SCRA should contact their installation legal assistance office.