FHFA Adjusts Flex-Mod Terms for Borrowers in Freddie and Fannie Mortgages


The Federal Housing Finance Agency (FHFA) has made changes to loan modification terms for COVID-19-impacted borrowers with mortgages backed by Fannie Mae or Freddie Mac needing payment reduction for successful home retention.

The updated terms are specifically for borrowers with permanent COVID-19 hardships and respond to the unprecedented nature of the pandemic.

​Flex modification terms will be adjusted for COVID-19 hardships, making interest-rate reduction possible for eligible borrowers regardless of the borrower’s loan-to-value ratio. Previously, only borrowers with mark-to-market loan-to-value (MTMLTV) ratios greater than or equal to 80 percent were eligible for a possible interest rate reduction.

“Allowing more families to qualify for an interest rate reduction will prevent unnecessary foreclosures, help strengthen the enterprises’ books of business, and make sustainable homeownership a reality for more families currently living with the uncertainty of forbearance,” says Acting FHFA Director Sandra L. Thompson.

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