F-2-10, Fannie Mae’s Workout Hierarchy (08/13/2025)

Introduction

This exhibit contains Fannie Mae’s Workout Hierarchy.

Fannie Mae’s Workout Hierarchy

Fannie Mae’s Workout Hierarchy

The servicer must consider a reinstatement when the mortgage loan is delinquent and the servicer has determined that the borrower has the ability to bring the mortgage loan current.

Note: The servicer must not apply buydown funds to reduce any delinquent amounts in connection with a reinstatement, unless required by the terms of the buydown agreement. If the mortgage loan remains subject to a temporary interest rate buydown plan as of the reinstatement date, the servicer must require the borrower to resume making payments as specified in the buydown agreement until the buydown term ends, subject to the terms of the buydown agreement. Once the buydown term ends, the servicer must require the borrower to begin making their full contractual monthly payment per the mortgage note and must return any funds it has held in association with a temporary interest rate buydown plan to Fannie Mae in accordance with C-3-01, Responsibilities Related to Remitting P&I Funds to Fannie Mae C-3-01, Responsibilities Related to Remitting P&I Funds to Fannie Mae, subject to the terms of the buydown agreement.

The servicer must see Chapter D2-3, Fannie Mae’s Home Retention and Liquidation Workout Options for the applicable workout option requirements. The following table provides guidance and the order of evaluation for available workout options for a conventional first lien mortgage loan. A complete BRP may not be required in accordance with the workout options described in Chapter D2-3, Fannie Mae's Home Retention and Liquidation Workout Options.

Note: See Workout Hierarchy for When a Borrower is Affected by a Disaster Event in D1-3-01, Evaluating the Impact of a Disaster Event and Assisting a Borrower D1-3-01, Evaluating the Impact of a Disaster Event and Assisting a Borrower for the workout hierarchy in instances where the servicer determines that the borrower is unable to resolve a delinquency resulting from a disaster-related hardship through a reinstatement and cannot afford a repayment plan.

Temporary Hardship
The following table describes the servicer’s requirements if the borrower is experiencing or has experienced a temporary hardship resulting from a short-term decrease in income or increase in expenses.
If the hardship has...	Then the servicer must consider a...
not been resolved	D2-3.2-01, Forbearance Plan D2-3.2-01, Forbearance Plan
been resolved and the borrower does not have the ability to reinstate the mortgage loan	D2-3.2-02, Repayment Plan D2-3.2-02, Repayment Plan
been resolved and the borrower does not have the ability to afford a repayment plan	D2-3.2-04, Payment Deferral D2-3.2-04, Payment Deferral
Permanent Hardship
If the borrower is experiencing a hardship that has resulted in a permanent or long-term decrease in income or increase in expenses, the servicer must evaluate the borrower for a workout option in the following order: D2-3.2-06, Fannie Mae Flex Modification D2-3.2-06, Fannie Mae Flex Modification D2-3.3-01, Fannie Mae Short Sale D2-3.3-01, Fannie Mae Short Sale D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure)D2-3.3-02, Fannie Mae Mortgage Release (Deed-in-Lieu of Foreclosure) Note: If a borrower requests to be evaluated for a liquidation workout option, the servicer must first evaluate the borrower for a liquidation workout option.