Deed-for-Lease Servicing Guidelines
Deed-for-Lease Servicing Guidelines
See Servicing Guide Announcement 09-33 for complete details on the new Deed-for-Lease™ Program, or view the Frequently Asked Questions document.
Fannie Mae Servicing Guide Announcement 09-33 introduced the Deed-for-Lease Program (D4L), allowing qualified borrowers (or tenants) with properties transferred through deed-in-lieu of foreclosure (DIL) to remain in their home by executing a lease in conjunction with a DIL.
Summary
· With the D4L program, servicers should follow their regular process – in accordance with Fannie Mae's workout hierarchy – in considering a borrower for a DIL.
· If a borrower is eligible for a DIL (as determined by the servicer), the servicer should notify Fannie Mae if the borrower may also be eligible for the D4L program based on an initial screen of predetermined eligibility criteria.
· Fannie Mae, or its designee, will take the steps necessary to further verify the property and borrower eligibility, determine the rental rate, and, if appropriate, execute the lease agreement.
· To qualify for D4L, the occupant of the property must have the ability to pay market rent (not to exceed 31 percent of his or her monthly gross income).
· The D4L agreement will be contingent on successful completion of the DIL.
Process
D4L includes certain responsibilities and requirements for servicers, borrowers, Fannie Mae and property managers (as designated by Fannie Mae). These are detailed in Announcement 09-33. Servicers should also refer to the Interim Instructions for Servicers document listed below. Once automated system enhancements are in place, the automated process will replace the interim instructions for servicers. Fannie Mae will notify servicers when these enhancements are available.
Documentation
Servicers must use the following documents when participating in the D4L program:
