FHFA Issues Guidance on Home Purchases, Refinancing While in Forbearance
The Federal Housing Finance Agency (FHFA) announced today that Fannie Mae and Freddie Mac 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.
FHFA says that borrowers are 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); and
- Three months after their forbearance ends, they have made three consecutive payments under their repayment plan, or payment deferral option or loan modification.
FHFA is also extending the ability of Fannie Mae and Freddie Mac to purchase single-family mortgages in forbearance. Fannie and Freddie are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they receive them by Aug. 31, 2020, and the loans have only one mortgage payment that has been missed. The previous policy was set to expire on May 31, 2020.
FHFA reports that the agency, along with Fannie Mae and Freddie Mac, will continue to monitor the impact of the coronavirus national emergency on the housing finance market and update their policies as necessary.