GSEs Issue Guidance on Refinance, Home Purchase Eligibility for Borrowers in Forbearance

Fannie Mae and Freddie Mac have issued temporary guidance clarifying the ability of borrowers with loans in forbearance to refinance or purchase a new home, the Federal Housing Finance Agency announced today. Borrowers are eligible to refinance or buy a new home if they are current on their mortgage (for example, if they are in forbearance but continuing to make their mortgage payments or reinstated their mortgage). Borrowers are also 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, payment deferral option or loan modification, FHFA said.

FHFA also announced that the GSEs will be permitted to purchase forborne mortgage loans with note dates on or before June 30, 2020, as long as they have only one mortgage payment that has been missed and are delivered to Fannie or Freddie by August 31, 2020.