Homeowners whose mortgages are backed by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and who have entered into mortgage forbearance plans as a result of the COVID-19 pandemic will be eligible to refinance or buy a new home within three months of the end of the forbearance period, provided they are current on their mortgage payments, the Federal Housing Finance Agency (FHFA) has announced.
“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” explains Mark Calabria, director fo the FHFA, in a statement. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as efficiently as possible.”
The FHFA is also extending the GSEs’ previously announced ability to purchase single-family mortgages in forbearance. The GSEs are now able to buy forborne loans, with note dates on or before June 30, 2020, as long as they are delivered to the GSEs by August 31, 2020 and where only one mortgage payment has been missed. The previous policy was set to expire on May 31, 2020.
In addition to these new measures, Fannie Mae has 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,” says Malloy Evans, senior vice president and single-family chief credit risk officer for Fannie Mae, in a statement. “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.”
“Freddie Mac continues to support lending during this unprecedented pandemic, while prudently managing risk and maintaining safety and soundness,” says Donna Corley, executive vice president and head of Freddie Mac’s Single-Family business. “These temporary purchase and refinance requirements provide borrowers with options during these difficult times.”