The Real Estate Encyclopedia
Military Indulgence
Category - Real Estate Glossary - Real Estate Terminology
A civilian borrower who later enters the military is entitled to Military Indulgence granted under the terms of the Servicemembers Civil Relief Act. There are two components of this provision:
Interest Rate Reduction: FNMA (Fannie Mae) policy requires a reduction in the interest rate from the time the borrower begins active duty to the date of release at the current rate of 6% (rate may be subject to change). This benefit is retroactive should the borrower notify the lender sometime after beginning active duty.
Additional Forbearance: In certain cases related to the financial hardship usually associated with the loss of greater civilian pay, the veteran may request special consideration in the form of a reduction in the monthly mortgage. The difference between the original monthly mortgage amount and the reduced payment is referred to as "arrearage". Upon release from active duty, the borrower would be responsible for bringing the arrearage current.


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Real Estate Glossary - Real Estate Terminology
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