Key takeaways
- A repayment plan lets you catch up on missed payments by adding an extra amount to your regular monthly payment for several months.
- Best for a temporary hardship that is now resolved and finances are stable.
- One of the least damaging options — it cures the delinquency instead of ending the loan.
- In Texas you can also reinstate (pay everything due in a lump sum) up to the day before the auction.
What is a repayment plan?
A repayment plan is a short-term agreement to catch up on missed payments by adding an extra amount to your regular monthly payment over several months, until you’re current again. It’s common after a forbearance period ends.
Houston note: Texas is a non-judicial foreclosure state, so timelines move fast. Talk to your servicer or a HUD counselor as early as possible — well before any first-Tuesday auction at the Harris County courthouse.
Eligibility requirements
- A temporary hardship that has ended, with finances now stable.
- Enough current income to cover the regular payment plus the catch-up amount.
- Your servicer offers repayment plans (common after a forbearance period).
The step-by-step application process
- Contact your servicer and explain the hardship is resolved.
- Provide proof of restored income and an updated budget.
- Agree on the plan length (often 3–12 months) and the added monthly amount.
- Get the terms in writing.
- Make every payment on time — missing one can void the plan and reopen foreclosure risk.
Impact on your credit score
Missed payments already reported before the plan will have lowered your score; the plan itself is typically not separately penalized. Successfully completing the plan and returning to on-time payments helps your score recover over time. This is one of the least damaging options because it cures the delinquency rather than ending the loan.
Pros & cons vs. foreclosure
| Repayment Plan | Foreclosure | |
|---|---|---|
| Keep your home | ✓ Yes | ✗ No |
| Credit damage | Minimal (beyond prior late payments) | Severe |
| Cost | Higher monthly, short-term | Loss of home |
| Best for | Temporary, resolved hardship | — |
| Requirement | Must afford catch-up payments | — |
Sources: Nolo, Equifax, Houston Mortgage Rescue.