To support borrowers and mortgage servicers, the Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises) have issued temporary guidance regarding the eligibility of borrowers who are in forbearance, or have recently ended their forbearance, looking to refinance or buy a new home.
Borrowers are now eligible to refinance or buy a new home if they are current on their mortgage (i.e., in forbearance but continued to make their mortgage payments or reinstated their mortgage). Borrowers are eligible to refinance or buy a new home three months after their forbearance ends and they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said Director Mark Calabria. “Today’s [at press time] action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.”
FHFA is also extending the Enterprises previously announced ability to purchase single-family mortgages in forbearance. The Enterprises are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the Enterprises by August 31, 2020 and where only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.
FHFA and the Enterprises will continue to monitor the impact of the coronavirus national emergency on the housing finance market and update our policies as necessary. To understand the protections and assistance the government is offering people having trouble paying their mortgage, please visit the joint Department of Housing and Urban Development, FHFA, and the Consumer Financial Protection Bureau website at cfpb.gov/housing.
What the Industry Is Saying:
“NAR applauds the FHFA and Director Calabria for taking additional steps to secure the U.S. housing market and ensure mortgage and refinance options remain available to creditworthy Americans. Homeowners who have been forced into forbearance by no fault of their own, but continue to make payments, should not be penalized because of this pandemic. With the real estate industry driving nearly one fifth of our national GDP, assurances that homebuyers can access credit and capitalize on record low mortgage rates remain critical to America’s economic recovery.” — Vince Malta, President, National Association of REALTORS®
“MBA applauds Director Mark Calabria and the FHFA for the temporary guidance announced today regarding the eligibility of borrowers who are in forbearance or who have recently ended their forbearance period. This provides much-needed clarity for borrowers, mortgage lenders and servicers. We also commend FHFA for extending the GSEs’ previous policy on purchasing single-family mortgages in forbearance. These welcome moves ensure that homeowners who continue to make on-time payments—and those who have successfully exited forbearance—can benefit from near record-low mortgage rates. It also keeps the mortgage market functioning efficiently and helps ease current credit availability constraints. MBA continues to advocate strongly for policies that provide assistance to homeowners and renters during the ongoing pandemic. The housing market will play a leading role in the economic recovery, and we appreciate FHFA for taking into consideration the industry’s feedback on ways to bolster these efforts responsibly while providing necessary relief to borrowers in need.”
— Robert D. Broeksmit, President & CEO, Mortgage Bankers Association