The U.S. departments of Housing and Urban Development (HUD), Agriculture (USDA) and Veterans Affairs (VA), the Federal Housing Finance Agency (FHFA), and Fannie Mae and Freddie Mac continue to monitor the impact of the coronavirus national emergency on the housing finance market and update their policies as necessary.
The following is guidance issued thus far by these entities that impacts the financial stability for home owners, landlords and tenants.
Foreclosure and Eviction Suspension
- HUD suspended foreclosures and evictions for mortgages insured by the Federal Housing Administration through the end of April.
- Fannie Mae and Freddie Mac (the Enterprises) will suspend all foreclosures and evictions for at least 60 days for home owners with mortgages backed by the Enterprises. The Enterprises will also allow borrowers impacted by the coronavirus to suspend mortgage payments for up to 12 months.
- USDA single-family housing Direct and Guaranteed loan borrowers are subject to a moratorium on foreclosure and eviction for a period of 60 days, effective March 19, 2020. Guaranteed Loan borrowers who are in default or facing imminent default due to a documented hardship can have payments reduced or suspended by their lender for a period not to exceed 12 months delinquency.
In addition, Fannie Mae and Freddie Mac will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus. The eviction suspensions are in place for the entire duration of time that a property owner remains in forbearance.
The forbearance is available to all multifamily properties with an Enterprise-backed performing multifamily mortgage negatively affected by the coronavirus national emergency. This action applies to the initiation of foreclosures and evictions and to the completion of foreclosures and evictions in process.
Mortgage Application Process
- FHFA is directing Fannie Mae and Freddie Mac to “provide alternative flexibilities” to satisfy appraisal and employment verification requirements through May 17, 2020. FHFA said it would allow Fannie and Freddie to “use appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.”
Several loan processing flexibilities that Fannie Mae and Freddie Mac will employ include:
- Allowing desktop appraisals on new construction loans;
- Allowing flexibility on demonstrating construction has been completed (alternative to the Completion Report);
- Allowing flexibility for borrowers to provide documentation (rather than requiring an inspection) to allow renovation disbursements (draws); and
- Expanding the use of power of attorney and remote online notarizations.
- USDA has waived or relaxed certain parts of the application process for Single-Family Housing Direct Loans, including site assessments, and has extended the time period that certificates of eligibility are valid.
- The VA will change the long-standing practice of requiring access to the interior of the home for certain types of loans. Valuations may come in the form of an exterior-only appraisal with enhanced assignment conditions or in limited instances, a desktop appraisal. These procedures are temporary and the VA will return to normal operations after the national emergency.
- The Consumer Financial Protection Bureau (CFPB) will not expect quarterly information reporting by certain mortgage lenders as required under the Home Mortgage Disclosure Act (HMDA) and Regulation C. During this time, entities should continue collecting and recording HMDA data in anticipation of making annual submissions. CFPB will provide information on when and how institutions will be expected to commence what would have been new quarterly HMDA data submissions.
- USDA tenant certifications due March 31, April 30 and May 31 for multifamily properties have been extended to June 30 with no late fees or overage charges. This extension will allow for additional time to complete needed certifications while avoiding face-to-face meetings as recommended by the Centers for Disease Control and Prevention.
In most cases, late fees on Section 515 mortgages will be waived as well. Additionally, for Section 515 Annual Financial Statements due March 31, USDA is extending the due date by 30 days, and is exploring whether a longer extension is appropriate.
NAHB will continue to monitor these updates and provide additional information as needed.
- FHFA: Mortgage Help for Homeowners Impacted by the Coronavirus
- HUD: Immediate Relief for Homeowners Amid Nationwide Coronavirus Response
- USDA: Immediate Measures to Help Rural Residents, Businesses and Communities Affected by COVID-19
- VA: Lender Guidance for Borrowers Affected by COVID-19
- CFPB: Flexibility During COVID-19 Pandemic