Forbearance
Homeowners facing a short-term hardship may be eligible for forbearance—a plan that allows for reduced or suspended mortgage payments for a designated period of time.
Length
Up to six months with the initial offer. Extension(s) may be granted thereafter. Shorter terms with extensions of the forbearance may be beneficial to the homeowner.
Payment amount
The homeowner is not required to make a payment during the forbearance. However, if the homeowner can pay any amount, the delinquency will be less impactful when the forbearance completes and long-term solutions are considered.
Repayment options
Repayment of all unpaid amounts is required, but a homeowner is not required to repay unpaid amounts all at once. Repayment options include:
- Reinstatement: Paying the total amount back all at once at the end of the forbearance period.
Guidance: Servicing Guide F-2-11, Fannie Mae’s Workout Hierarchy - Repayment plan: Paying a portion of the forbearance amount back gradually (over the course of up to 12 months) in addition to the contractual monthly payment.
Guidance: Servicing Guide D2-3.2-02: Repayment Plan - Payment deferral: Resuming the regular monthly payment and repaying the entire deferred balance all at once at the end of the loan (or when the home is sold, or the loan is refinanced or otherwise paid off).
- Loan modification: Permanently changing some of the terms of the loan to make monthly payments more affordable.
Guidance: Servicing Guide D2-3.2-07: Fannie Mae Flex Modification
Guidance: Servicing Guide D2.3.2-06 Disaster Payment Deferral
Homeowner documentation
- You must provide a copy of the forbearance plan to the homeowner.
- A Borrower Response Package (BRP) is not required to offer a homeowner a forbearance plan.
Keep in mind
A borrower may exit forbearance and later be impacted financially by another hardship
Some borrowers may find themselves unable to resume or continue paying their monthly payment after a forbearance plan has ended. The borrower must contact the servicer if a new forbearance plan is needed.
Additional information to consider for borrowers taking forbearance:
Mortgage assistance: Help borrowers understand that forbearance is not mortgage forgiveness – that all unpaid amounts must be paid back (see repayment options above.)
Credit reporting: Servicers must report the status of the mortgage loan to the credit bureaus in accordance with the Fair Credit Reporting Act (FCRA). Refer to Servicing Guide C-4.1-01: Notifying Credit Repositories for additional information.
Learn more
Ready to initiate a forbearance request? Check out our step-by-step instructions for reporting to Fannie Mae using Asset Management Network (AMN).
Still have questions? Call us at 1-800-2FANNIE and follow these prompts. Please note that hold times may be longer than expected due to high call volume.
