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D2-3.1-05, Interacting with Mortgage Assistance Fund Program Providers (10/12/2022)

The following table lists the servicer’s responsibilities with regard to handling funds provided on behalf of a borrower from a state or local government mortgage assistance fund program, such as those administered by an HFA or other designee.


The servicer must…


Accept such funds on behalf of a borrower (i.e., treat as borrower-paid funds) provided that application of such funds does not impair Fannie Mae’s interests in the mortgage loan.


Apply funds in accordance with


Provide the necessary mortgage loan information to the mortgage assistance fund program provider and the eligible borrower to enable their participation in the program.


Not deny or delay consideration of a borrower for a workout option pending approval for mortgage assistance.


Cancel an active forbearance plan, an active repayment plan, or a payment deferral that has not yet been completed if the mortgage loan is fully reinstated as a result of mortgage assistance funds.

  Contact Fannie Mae's SFCPM Division  (see  F-4-02, List of ContactsF-4-02, List of Contacts) immediately if application of mortgage assistance funds fully reinstate the mortgage loan during an active mortgage loan modification Trial Period Plan to obtain Fannie Mae's assistance with appropriately completing the mortgage loan modification, including satisfying any conditions related to MBS trust requirements.


Evaluate the borrower for a retention workout option in accordance with Chapter D2-3, Fannie Mae's Home Retention and Liquidation Workout Options if the borrower requests additional assistance after the mortgage loan has been fully reinstated.


Note: If the borrower fails to qualify for a conventional mortgage loan modification due to the imminent default evaluation (see Evaluating a Borrower for Imminent Default for Conventional Mortgage Loan Modification Eligibility in  D2-1-01, Determining if the Borrower’s Mortgage Payment is in Imminent DefaultD2-1-01, Determining if the Borrower’s Mortgage Payment is in Imminent Default for more information), the servicer must submit the case to Fannie Mae for review through Fannie Mae’s servicing solutions system.



Attempt to contact the borrower and achieve QRPC in accordance with Chapter D2-2, Requirements for Contacting a Borrower to resolve the remaining delinquency if the funds do not fully reinstate the borrower’s mortgage loan.


Refer to the following topics with regard to handling foreclosure activities:



Be able to

  • readily identify on its servicing system any borrower who receives mortgage assistance from a mortgage assistance fund program provider, and
  • provide this information to Fannie Mae upon request.



Recent Related Announcements

The table below provides references to recently issued Announcements that are related to this topic.                                      

Announcements Issue Date
Announcement SVC-2022-07 October 12, 2022
Announcement SVC-2021-04 July 14, 2021
Announcement SVC-2020-04 September 9, 2020