FHFA recently announced refinance and home purchase eligibility updates for borrowers in forbearance.  This announcement is for conventional loans only.

1. Borrowers are immediately eligible to refinance or buy a new home if they participated in a forbearance plan but continued to pay as agreed  (i.e., paid all monthly payments in the month due no later than the last day of that month)
2. Borrowers are immediately eligible to refinance or buy a new home if they participated in a forbearance plan and DID NOT pay as agreed (i.e., DID NOT pay all monthly payments in the month due no later than the last day of the month), if:

• • Borrower must cure delinquent payments, have the affected account reinstated, and be current at the time of application for the new loan
  • Borrower must cure delinquent payments, have the affected account reinstated, and be current post application for new loan
    (funds used to bring account current must verified according to Fannie/Freddie guidelines)

3. Borrower can become eligible to refinance or buy a new home if the participated in a forbearance plan AND utilized a modified loan repayment plan, payment deferral plan, or loan modification plan to cure the missed forbearance payments:

• • The new plan must be in affect AND;
  • The borrower must make three (3) consecutive payments on time within the month contractually due

**In addition to the standard credit verifications required by the Agencies, Lenders are required to verify mortgage histories for each of the unique scenarios above by completing additional due diligence to document pay history.  This includes;

• • Loan payment history from the servicer showing 0x 30
  • A payoff statement showing mortgage is current
  • The latest mortgage statement from the borrower
  • Standard VOM showing 0x30
  • Reinstatement scenarios will need to be verified

Read the Fannie Mae Lender Letter > LL-2020-03 for more details

Read the FHFA Announcement >FHFA Announces Refinance and Home Purchase Eligibility for Borrowers in Forbearance