The Federal Housing Finance Agency (FHFA
) is adding a preferred language question to the redesigned Uniform Residential Loan Application (URLA). Lenders can begin using the redesigned URLA in July 2019, but the updated form will not become mandatory for Fannie Mae and Freddie Mac loans until February 2020.
According to the FHFA, this decision will accommodate borrowers who self-identify as limited English proficient (LEP) and are more comfortable communicating in another language. The FHFA stressed that this action is “in the interest of all segments of the mortgage market.” A separate disclosure translated into several languages will also be created to update borrowers about available language resources.
"In carrying out FHFA's statutory responsibility to support access to credit, FHFA has committed to improving the ability of all mortgage-ready borrowers to understand and participate fully in the mortgage process," said FHFA Director Mel Watt. "Adding a preferred language question to the URLA will enable mortgage industry participants to connect LEP borrowers to available language access resources. This will support access to credit for a growing segment of the nation's housing finance market."