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COVID-19: FHFA Temporary Mortgage Relief for Homeowners

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The Federal Housing Finance Agency (FHFA) has directed the Enterprises to provide guidelines for homeowners and lenders affected by coronavirus related hardships.

The temporary flexibilities by Fannie and Freddie are effective immediately for all loans in process and remain in place for loans with application dates on or before May 17, 2020:


It is expected the lenders will attempt to obtain the Verbal Verification of Employment; however, they will allow the following flexibilities:

Verbal VOE: An email directly from the employer's work email address identifying the name and title of the verifier; the Borrower's name and current employment status may be used in lieu of a Verbal Verification of Employment. The lender may also obtain the Verification of Employment after loan closing up to the time of loan delivery. (However, they strongly encourage getting the Verification of Employment before the Note date.)

Paystub: The lender may obtain a year-to-date paystub from the pay period that immediately precedes the Note date.

Bank Statements: The lender can provide bank statements evidencing the payroll deposit from the pay period that immediately precedes the note date.

Self-Employment: Lenders are encouraged to attempt to verify whether the Borrower's business is operational closer to the note date rather than rely on the current guide requirements (within 15 days instead of 120 days).

COVID-19 has also prompted changes to the Lenders ability to obtain appraisals on properties.  Here are some of the highlights on the flexibilities the GSE's are allowing:


Lenders have been unable to obtain an appraisal based on a full interior and exterior inspection of the subject property.  In response, Fannie and Freddie are allowing temporary flexibilities to their appraisal requirements. The enterprises encourage the use of an appraisal waiver when eligible, but it is expected the lender will attempt to obtain a full appraisal first.  Flexibilities are listed in order of priority preferences.  You must proceed down the list in order, attempting a traditional appraisal first.


For purchase transactions when an interior and exterior appraisal is not available, lenders are encouraged to obtain a desktop appraisal rather than an exterior-only appraisal.

The minimum scope of work for a desktop appraisal does not include an inspection of the subject property or comparable sales.  The appraiser relies on public records, multiple listing service (MLS) information and other third-party data sources to identify the property characteristics.

When a desktop appraisal is performed and reported on Form 1004 or Form1073, then submitted to us through the Uniform Collateral Data Portal (UCDP), the appraisal will be scored by Collateral Underwriter (CU). All loans with a CU risk score of 2.5 or less will receive value representation and warranty relief under Day 1 Certainty.  With desktop appraisals, lenders will have the added risk management and efficiency benefit of being able to use CU to aid in the appraisal review process.

The table on page 4 of the Lender Letter provides the appraisal report form that must be used to complete the desktop appraisal for each property type.

As described below, Freddie Mac and Fannie Mae have worked together to develop documents that include modified appraisal report language for the scope of work, statement of assumptions and limiting conditions, and certifications that must be used with these appraisal forms. For full details on exhibits for desktop appraisals, exhibits for exterior-only inspection appraisals See Lender Letter (LL-2020-04).


Lenders are encouraged to accept appraisal waiver offers when eligible and provided through DU to address concerns around contact between appraisers and homeowners.  Lenders should submit the case to DU to determine whether an appraisal waiver is offered before ordering an appraisal.  Fannie is reminding lenders that all Selling Guide requirements pertaining to appraisal waivers apply (see Guide B4-1.4-10).  They are continuing to monitor the impact of COVID-19 and will evaluate additional appraisal waiver flexibilities if the situation warrants such action.

For more information on updates please see:


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