Borrowers who have taken forbearance can still take advantage of record low mortgage rates for purchasing a home or refinancing their existing home, the Federal Housing Finance Agency announced Tuesday. The FHFA made the announcement to try to clear up some confusion about what limits are placed on those who have taken forbearance during the COVID-19 pandemic, which now totals about 4.1 million homeowners.

Fannie Mae and Freddie Mac, which the FHFA oversees, will permit borrowers who went into forbearance due to the pandemic to refinance their loan or buy a new home as long as they’ve reinstated their mortgage and made three straight months of payments under their repayment plan, payment deferral option, or loan modification from their missed payments.

Also, there is no waiting period for borrowers who requested forbearance but ultimately were able to make their payment in full and on time, Fannie Mae notes.

“Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized,” said FHFA Director Mark Calabria. “Today’s action allows homeowners to access record low mortgage rates and keeps the mortgage market functioning as effectively as possible.”

“NAR applauds the FHFA and Director Calabria for taking additional steps to secure the U.S. housing market and ensure mortgage and refinance options remain available to creditworthy Americans,” said NAR President Vince Malta, broker at Malta & Co Inc., in San Francisco. “Homeowners who have been forced into forbearance by no fault of their own but continue to make payments should not be penalized because of this pandemic. With the real estate industry driving nearly one-fifth of our national GDP, assurances that homebuyers can access credit and capitalize on record low mortgage rates remain critical to America’s economic recovery.”

As Forbearance Confusion Persists, Help Set Owners Straight

Some borrowers who are in forbearance have been under the impression that they would be shut out from qualifying for another Fannie Mae- or Freddie Mac-backed mortgage for up to 12 months after they exit forbearance. The CARES Act requires that mortgage servicers report borrowers as “current” on any loan that goes into forbearance due to a COVID-19 financial hardship.