FHFA actions in response to COVID-19

The Federal Housing Finance Agency has announced has authorized Fannie Mae and Freddie Mac (the Enterprises) to enter into additional dollar roll transactions. Eligible collateral is limited to Agency mortgage-backed securities and the transactions must be undertaken via an auction or similar mechanism to ensure that they occur at a fair market price. Dollar roll transactions provide mortgage-backed securities investors with short-term financing of their positions, providing liquidity to these investors.

This FHFA's action was taken to ensure the Enterprises fulfill their mission of providing market liquidity during the coronavirus national emergency.

The FHFA also announced it has directed the Enterprises to provide alternative flexibilities to satisfy appraisal and employment verification requirements through May 27.2020.

• To allow for homes to be bought, sold, and refinanced as our nation deals with the challenges of the coronavirus, the Enterprises will leverage appraisal alternatives to reduce the need for appraisers to inspect the interior of a home for eligible mortgages.
• In the event lenders cannot obtain verbal verification of the borrower's employment before loan closing, the Enterprises will allow lenders to obtain verification via an e-mail from the employer, a recent year-to-date paystub from the borrower, or a bank statement showing a recent payroll deposit. Lenders should continue to utilize sound underwriting judgment to ensure these alternatives are appropriate to the borrower's circumstances.

In a third announcement, the FHFA said the Enterprises will offer multifamily property owners mortgage forbearance with the condition that they suspend all evictions for renters unable to pay rent due to the impact of coronavirus. The eviction suspensions will be in place for the entire duration of time that a property owner remains in forbearance. The forbearance is available to all multifamily properties with an Enterprise-backed performing multifamily mortgage negatively affected by the coronavirus national emergency.