Do we include mortgage interest from our 1098 that was covid help paid on our behalf? we had our loan redone w/ our pastdue paid

[afisch082]

WE had a forbearance on our mortgage due to covid. we had a FHA loan so was able to get some  help to pay the loan up to date and we will pay to back at the end of the loan.  our 1098 shows 13000 paid for mortgage interest. DO we still include that when we were not the ones to pay it?

[DaveF1006]

This is a judgement call where no clear precedence has been established. In this case, you have the ownership interest in the home thus you can deduct interest on the loan, not the person who helped pay the loan to bring it up to date.

You are liable to pay back the loan at the end of the loan so in my opinion, you are entitled to claim the mortgage interest paid because at some point, you will need to pay that good Samaritan back at some point. 

[afisch082]

It was a loan program through our mortgage company because we have an FHA loan. I just wasn't sure how it works since we did not actually pay anything. It was a payment made to help us catch up. But our loan was redone so we pay it back. I haven't really found anything online on what to do.

[KrisD15]

It sounds like it was a "Forbearance" which means nobody else paid your mortgage payments, your late payments were sort of "Forgiven" so they did not show as late anymore, but they were still added to what you still owed on the loan. 

You might want to check with the Lender. 

If the 1098 is issued to you, you may enter it and claim the interest paid on that home loan. 

More about Covid relief on HUD homes

[afisch082]

I believe it was called a partial claim. We looked at a loan modification but was offered this other route to become current again. 

[KrisD15]

Yes, that is fine. Claim the interest on the 1098.

No one else paid your interest. 

"If borrowers were current or less than 30 days delinquent as of March 1, 2020, they may be entitled to this option. A partial claim is a zero interest, no fee, junior lien on the borrower’s property that will become payable when the borrower sells their home, pays off their mortgage, or their mortgage otherwise terminates."

HUD link