Recently the Federal Housing Finance Agency (FHFA) announced its decision to add a preferred language question to the redesigned Uniform Residential Loan Application (URLA). This question will enable borrowers who prefer to communicate in a language other than English to identify that language. It also provides clear disclosures that the mortgage transaction is likely to be conducted in English and that language resources may not be available.
The addition of this question is part of a broader, multiyear effort that FHFA is undertaking with Fannie Mae and Freddie Mac (the Enterprises) to improve language access for limited English proficient (LEP) borrowers in the United States. Later this year, Fannie Mae and Freddie Mac will publish the final redesigned URLA. Lenders may begin using the redesigned URLA in July 2019, but use of the redesigned form will not be mandatory for Enterprise loans until February 2020.
FHFA has taken steps to address concerns raised about inclusion of a language preference question. These steps include adding disclosure language to the question to mitigate legal concerns raised by lenders, set appropriate borrower expectations about available language services, and inform borrowers about other language access resources. The Enterprises will also publish a separate disclosure translated into several languages that further informs borrowers about the nature of available language resources. Use of this disclosure will be optional for lenders.
The new Preferential Language Question is available at: https://www.fhfa.gov/PolicyProgramsResearch/Policy/Documents/Preferred_Language_Question.pdf.
