When military members are on active duty, they need to focus on the mission at hand — not their mortgage. As a result, the federal government enacted the Servicemembers Civil Relief Act (SCRA) to provide legal and financial protections to active-duty military members and their families.
One of the primary provisions of the SCRA is that it limits the interest rate that can be charged on certain types of loans, including mortgages, to 6% while the servicemember is on active duty. To take advantage of this benefit, servicemembers must notify their creditor in writing and include a copy of their orders to active duty service or other appropriate evidence of military service, such as a certified letter from their commanding officer, that shows the dates of active duty. Under the protection of the SCRA, mortgage servicers are also prevented from foreclosing on the property of active-duty military personnel without a valid court order, regardless of whether or not the servicemember notifies their lender or servicer of their military status.
The interest rate and foreclosure protections generally apply to pre-active-duty mortgage obligations and are afforded to servicemembers not only while on active duty but also for an additional year after leaving active duty. These protections allow servicemembers to dedicate their full attention to their duties and offer some relief to them and their family members.