The U.S. Department of Housing and Urban Development (HUD) announced in Mortgagee Letter 2023.13 that lenders must use the Supplemental Consumer Information Form (SCIF) from Fannie Mae or Freddie Mac for all FHA-insured mortgage loans with application dates on or after Aug. 28.
The SCIF 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.
HUD stated it believes requiring the SCIF can inform borrowers of a lender or mortgage servicer’s provision of services in languages other than English as well as enhance the borrower’s understanding of the homebuying and mortgage lending processes.
“Borrowers should be able to fully understand their options and obligations when they are seeking mortgage financing,” Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon said in a press release. “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 provide it 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,” Deputy Assistant Secretary for Single Family Housing Sarah Edelman said. “This announcement complements the work we recently completed to provide translated versions of mortgage documents and homebuyer education resources.”