June 27, 2023

HUD: FHA to Require Use of Supplemental Consumer Information Form

Information will support a greater understanding of borrower language preferences and use of housing counseling or homebuyer education offerings.

Today, the Federal Housing Administration (FHA) is announcing that it will require lenders to use the Supplemental Consumer Information Form (SCIF) when originating mortgages for FHA insurance. The SCIF (Fannie Mae/Freddie Mac Form 1103) is an industry-recognized form used during the mortgage application process that allows borrowers to voluntarily identify language preferences and provide information on housing counseling and homeownership education they may have received. Borrowers may choose to provide all, some, or none of the information requested on the form. Requiring the SCIF can inform a lender or mortgage servicer’s provision of services in languages other than English and in accordance with a borrower’s understanding of the homebuying and mortgage lending processes. The SCIF will be required for loan applications dated on or after August 28, 2023.

“Borrowers should be able to fully understand their options and obligations when they are seeking mortgage financing,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon. “Using the SCIF is an important means of obtaining information to assess the breadth of education and language needs of borrowers so that lenders can best meet their needs.”

For FHA, collecting information in the SCIF will enable a better aggregate view of language preferences for the borrowers it serves, which in turn will influence its future actions to continue breaking down language and other barriers to homeownership. Lenders working with prospective borrowers seeking FHA-insured Title II forward mortgage financing will be required to present the SCIF to borrowers as part of the mortgage application process. Lenders will transmit any information a borrower chooses to provide to FHA as part of the lender’s required loan application data submissions.

“The SCIF has already been adopted for conventional mortgages and we believe that its use is even more important for FHA-insured mortgages, given FHA’s outsized role in providing access to mortgage financing for underserved populations,” said Deputy Assistant Secretary for Single Family Housing Sarah Edelman. “This announcement complements the work we recently completed to provide translated versions of mortgage documents and homebuyer education resources.”

On June 13, 2023, FHA announced the availability in Chinese, Korean, Spanish, Tagalog, and Vietnamese versions of more than 30 single family mortgage documents and related resources associated with FHA programs. The educational resources are intended to assist lenders, servicers, housing counselors, and other FHA program participants in explaining information related to homebuying and FHA-insured mortgages to those with limited English proficiency. In addition, HUD’s toll-free housing counselor telephone locator service at 800-569-4287 offers access to HUD-approved Housing Counseling Agency location and contact information in approximately 200 languages.

This post was originally published here.