The Federal Housing Finance Agency (FHFA) earlier announced that Fannie Mae and Freddie Mac will require lenders to use the Supplemental Consumer Information Form (SCIF) as part of the application process for loans that will be sold to Fannie and Freddie. The purpose of the SCIF is to collect information about the borrower's language preference, if any, and on any homebuyer education or housing counseling the borrower received, so lenders can better understand borrower needs during the home buying process, the FHFA announced in a release.

Specifically, the changes announced today will require lenders to present the SCIF questions to borrowers and to report any data collected from the SCIF to the Enterprise purchasing the loan. Lenders will be required to adopt these changes and reporting requirements for loans with application dates on or after March 1, 2023. Response by borrowers to the preferred language question in the SCIF will remain voluntary.

“Collecting language preference and housing counseling information provides mortgage applicants with an additional method to inform lenders of their needs, enabling the industry to more fully respond to the nation's growing diversity,” FHFA Acting Director Sandra Thompson said in the release. “These steps will contribute to an equitable housing finance system that welcomes all qualified borrowers.”

“The CFPB welcomes the FHFA's announcement today. As those lenders and financial companies that already collect the language preference of applicants and borrowers know, this information allows lenders to serve their customers better,” CFPB Director Rohit Chopra said. “The collection of applicants' language preference does not violate the Equal Credit Opportunity Act or its implementing regulations. “The CFPB is eager to see advances in broader language access to better serve all borrowers.”

The SCIF will be available via Mortgage Translations later this summer.