FHA to require lenders to ask for applicant’s language preference

Decision follows similar requirement for conforming loans

The Federal Housing Administration (FHA) will now require lenders that make FHA loans to ask for a mortgage applicant’s language preference.

Lenders will be required to use the Fannie Mae/Freddie Mac Supplementary Consumer Information Form (SCIF) to collect a borrower’s language of choice for loan applications dated on or after Aug. 28, 2023. The SCIF is an industry-recognized form that allows borrowers to identify their language preferences, and to specify any homeownership counseling or education they may have received.

Borrowers may choose to provide all, some or none of the data requested on the form, which will be used to make mortgage information available in the languages that borrowers best understand. The requirement is another step in a recent FHA initiative to better inform borrowers with limited English proficiency (LEP). Earlier this month, the agency also launched a new language access webpage, which provides translations of key FHA documents in the five languages most commonly spoken by LEP households: Chinese, Korean, Spanish, Tagalog and Vietnamese.

The FHA’s new mandate follows the Federal Housing Finance Agency’s language preference collection requirement for lenders that sell loans to Fannie Mae and Freddie Mac, which was enacted in March and proposed to codify as regulation in April.

“We applaud FHA’s leadership for recognizing how crucial language access is to reducing barriers to homeownership for millions of hardworking families in populations that have been underserved by FHA financing,” said Alys Cohen, senior attorney at the National Consumer Law Center. “FHA is a crucial source of mortgage credit in underserved communities, and collecting language preference will expand FHA’s reach and help borrowers gain access to essential information in their preferred language.” 

“Identifying language preference is an important first step toward serving borrowers with limited English proficiency,” said Nicole Cabañez, Skadden Fellow at the National Consumer Law Center. “We celebrate this tool for allowing borrowers to express their language needs in an efficient, systematic way, while also recognizing that lenders and servicers also must be required, not merely encouraged, to respond to the needs of LEP consumers with concrete steps to increase access to written and oral assistance. We urge FHA to continue reducing barriers to the mortgage market for LEP homeowners.”


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