The U.S. Department of Housing and Urban Development (HUD) recently announced in Mortgagee Letter 2023.13 that lenders must use the Supplemental Consumer Information Form (SCIF) of Fannie Mae and Freddie Mac in connection with FHA insured mortgage loans with application dates on or after August 28, 2023.

As previously reported, in May 2022 the Federal Housing Finance Agency announced that for residential mortgage loans to be sold to Fannie Mae or Freddie Mac with application dates on or after March 1, 2023, the lender must present a SCIF to collect information on the applicant’s language preference. The SCIF also allows the applicant to indicate any homeownership education or housing counseling that they have received.

HUD advises as follows in the Mortgage Letter:

“FHA recognizes the nation’s growing diversity and the importance of understanding Borrowers’ language preferences and removing barriers that make the homebuying process less accessible to some prospective homebuyers. Therefore, FHA seeks to increase the ease of use of its programs for prospective Borrowers with Limited English Proficiency (LEP) and/or a lack of familiarity with the homebuying process. Toward this end, FHA is adopting industry-standard requirements regarding the provision of the Fannie Mae/Freddie Mac Form 1103, [SCIF], to a Borrower at the time of application for an FHA-insured Mortgage.

The SCIF collects information about the Borrower’s language preference and any homeownership education and housing counseling the Borrower may have received. Mortgagees can use the information collected to better understand a Borrower’s possible language barriers and their understanding of the homebuying process. Borrowers may elect to provide their Mortgagees with none, some, or all information requested in the SCIF.”

HUD also advises that lenders are responsible for using the most recent version of the SCIF and other forms as of the date of completion of the forms.

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