Fannie to Allow Third Parties to Meet Borrower Education Requirements
Written By: Joel Palmer, Op-Ed Writer
Fannie Mae will soon allow borrowers to fulfill their homeownership education requirements through third-party providers, independent of lenders.
Fannie announced the change in its latest Selling Guide update. Other changes include the removal of constant maturity treasury indexed-ARMs and the replacement of references to the Software Subscription Agreement Master Terms and Conditions with a new Consolidated Technology Licensing Guide.
Any third-party content used must align with the National Industry Standards (NIS) for Homeownership Education and Counseling or with the U.S. Department of Housing and Urban Development (HUD) Housing Counseling Program, or provided by a HUD-approved counseling agency. In addition, third-party providers must provide certificate of course completion.
The education may be delivered in various formats, including in-person, online, telephone, or a hybrid format.
Since 2015, Fannie required the use of Framework Homeownership online education to satisfy the homeowner education requirement.
Fannie said that to give lenders and the industry time to prepare for this change and to give borrowers the benefit of the no-cost Framework option, the new policy will be effective January 1, 2022. Lenders must continue to use the Framework online education program for courses completed on or before Dec. 31, 2021.
The homeownership education messages in Desktop Underwriter will be updated in a future release.
If a borrower opts to work with a housing counselor, completion of housing counseling prior to closing will satisfy Fannie Mae’s homeownership education requirement. The lender must retain a copy of the certificate of course completion in the loan file.
In other Fannie Mae news, the company’s latest Home Purchase Sentiment Index (HPSI) shows respondents continue to look negatively on the current market for buyers.
In the September survey, 66 percent of respondents believe now is a bad time to buy a home, up from 63 percent the month before. Only 28 percent of respondents said it’s a good time to buy, down from 32 percent the previous month.
About the Author
As an NAMP® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
