Compliance Calendar

We remain committed to ensuring our retention workout options provide appropriate borrower assistance regardless of the economic environment. Accordingly, we are updating the steps for determining the Fannie Mae Flex Modification terms in alignment with Freddie Mac and at the direction of FHFA. The updates expand eligibility by revising the mark-to market loan-to-value (MTMLTV) based requirements and provide more equitable payment reduction to eligible borrowers by applying the terms incrementally and targeting a 20% P&I payment reduction. In accordance with these policy updates, we are also publishing revised Evaluation Notices that must be implemented as of the effective date below.

Oct. 2, 2024

We are clarifying that when determining the final Fannie Mae Flex Modification terms, the servicer must use the same interest rate as established when determining the terms for the Trial Period Plan.

This clarification is effective upon the servicer’s implementation of the updated Fannie Mae Flex Modification policy in accordance with this Lender Letter.

This Lender Letter contains

▪ Updates to the Fannie Mae Flex Modification terms

▪ Appendix

With the exception of the updates in this Lender Letter that replace the referenced Guide policy, the servicer must otherwise refer to the existing requirements in Servicing Guide D2-3.2-06, Fannie Mae Flex Modification and F-1-27, Processing a Fannie Mae Flex Modification for evaluating, processing, and completing a Fannie Mae Flex Modification. Additionally, when we update the Servicing Guide with the revised steps, we will replace the term “interim month” with “processing month” in relation to a Fannie Mae Flex Modification to align the terminology with that used for payment deferral.

Effective: As early as Nov. 1, 2024, but no later than Dec. 1, 2024, servicers must determine the borrower’s new modified mortgage loan terms for a Fannie Mae Flex Modification in accordance with this Lender Letter. Once implemented, the servicer must offer the Fannie Mae Flex Modification to all eligible borrowers according to the requirements in this Lender Letter. These policy changes will be reflected in the November 2024 Servicing Guide update.

Purpose -This Mortgagee Letter (ML) implements updates to the Section 203(k) program guidelines, which are intended to reduce barriers to using the program.

Effective Date - The provisions of this ML must be implemented for FHA case numbers assigned on or after November 4, 2024. All updates will be incorporated into a forthcoming update of the HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Handbook 4000.1).

Affected Programs - The provisions of this ML apply to applicable Section 203(k) program transactions.

Purpose -This Mortgagee Letter (ML) updates New Construction property elevation requirements in SFHAs.

Effective Date - The provisions of this ML are effective immediately.

All updates will be incorporated into a forthcoming update of the HUD Handbook 4000.1, FHA Single Family Housing Policy Handbook (Handbook 4000.1).

Affected Programs - The provisions of this ML apply to all FHA Title II Single Family forward and Home Equity Conversion Mortgage (HECM) programs.

This Guide Bulletin announces:

• Income underwriting and documentation requirements

➢ Updates to income underwriting and documentation requirements related to:

• Self-employed income – November 8, 2024

• Income from non-arm’s length employment – November 8, 2024

The Servicing Guide has been updated to include changes to the following:

▪ Preventing, Detecting and Reporting Mortgage Fraud: clarifies that sellers and servicers are responsible for preventing,

detecting and reporting mortgage fraud

▪ eMortgage Servicing Requirements*: clarifies eMortgage servicing requirements

▪ Miscellaneous update:

o Reporting Due Date for Summary Reporting Mortgage Loans*

o Update to Remitting Third-Party Sales Proceeds*

o Incorporation of Lender Letter LL-2024-02, Updates to Determining the Flex Modification Terms*

View the list of impacted topics.

*Policy change not applicable to reverse mortgage loans

1. Purpose. The purpose of this Circular is to announce an update to the current VA funding

fee rate table applicability dates to conform with Public Law 118-19.

2. Therefore, Circular 26-23-6 is changed as follows:

Page 1, paragraph 3: Delete “November 14, 2031” and replace with “November 15, 2031”.

Exhibit B: Delete “November 14, 2031” and replace with “November 15, 2031”.

3. Rescission: This Circular is valid until rescinded.

Click the link to read the full rule.