Fannie Mae has announced flexibilities for homeowners who have taken a forbearance due to a COVID-19 financial hardship to refinance their mortgage or buy a new home. Additionally, the company announced a one-month extension to flexibilities that enable lenders to sell to Fannie Mae single-family loans currently in forbearance.
“We are listening to and prioritizing our customers’ needs, helping them serve homeowners efficiently and responsibly. Today’s updates provide clarity and support to both lenders and borrowers in a manner that fosters sustainable homeownership, prudently manages enterprise and taxpayer risk, and maintains safety and soundness in the housing finance system,” said Malloy Evans, SVP and Single-Family Chief Credit Risk Officer, Fannie Mae.
Under the temporary eligibility guidelines, effective immediately, homeowners who missed payments and entered into a loss mitigation solution—such as a repayment plan, payment deferral, or loan modification—are eligible for a new refinance or purchase mortgage after three timely payments. There is no waiting period for borrowers who missed payments due to a COVID-19 financial hardship but have since completed reinstatement by repaying the full amount of the outstanding payments missed during the forbearance period. There also is no waiting period for borrowers who requested forbearance due to a COVID-19 financial hardship but ultimately were able to make all their payments in full and on time.
Also, in an effort to provide additional financing options to single-family mortgage lenders, Fannie Mae’s ability to purchase single-family mortgages in forbearance has been extended to include loans with note dates on or before June 30, 2020, provided the loans are delivered by August 31 and no more than one mortgage payment has been missed. The previous policy was set to expire on May 31.
Effective immediately, lenders may apply these policies to loans in process, and they must apply the policies for loan application dates on or after June 2, 2020. These policies will be in effect until further notice.