FHFA makes translations of language preference form available

The Supplemental Consumer Information Form is now available in the six most-spoken languages in the U.S. on the mortgage translations website, the Federal Housing Finance Agency announced.

The FHFA ordered in May that all lenders selling loans to Fannie Mae or Freddie Mac will be required to submit this form with each mortgage application taken starting on March 1, 2023. Currently it is used on a voluntary basis to report a consumer’s language preferences, in an effort to measure access to those with limited English proficiency.

However, even after its use becomes mandatory, borrowers do not have to answer the language question on the form, the FHFA noted in the May announcement.

The SCIF is now available in Spanish, traditional Chinese, Vietnamese, Korean and Tagalog, as well as English.

Both Fannie Mae and Freddie Mac have designated the SCIF as Form 1103. The Fannie Mae Lender Letter issued on July 6 also notes the form requires information about homeownership education and counseling.

"The lender or borrower should complete the education and counseling sections of the form if required by the Selling Guide, B2-2-06, Homeownership Education and Housing Counseling," Fannie Mae Lender Letter 2022-03 stated. "This section can also be completed if the borrower obtained education or counseling even if not required for the specific transaction."

Freddie Mac also updated its seller/servicer guide to include the form.

"The lender must present the SCIF to the borrower to provide a preferred language, but the borrower is not required to select any of the language options in the 'Language Preference' section," the Freddie Mac announcement said. "As a result, there may be instances where the SCIF in the mortgage file only includes the loan identifier information and the borrower name."

Freddie Mac will update Loan Product Advisor in the third quarter for conditionality and any missing data. However, LPA already accepts borrower language and homeownership education and counseling data for those lenders who want to implement the changes in advance. Sellers can begin submitting the updated data in the loan submission files at any time.

Fannie Mae will do a similar update to Desktop Underwriter in the third quarter.

The FHFA had gone back and forth about including a language preference question on the Uniform Residential Loan Application, also known colloquially in the industry by its Fannie Mae designation, Form 1003; Freddie Mac calls the URLA Form 65. But the October 2019 URLA update omitted the language preference question.