source:
  type: guide
  id: fnma-svc-d2-3.2-06
  authority: Fannie Mae Servicing Guide D2-3.2-06 — Fannie Mae Flex Modification
  description: Fannie Mae Servicing Guide D2-3.2-06 — Fannie Mae Flex Modification.
  coverage_tier: operative
obligations:
- id: fnma-svc-d2-3.2-06-full
  canonical_id: fnma-svc-d2-3.2-06-full
  section: Fannie Mae Servicing Guide D2-3.2-06 — Fannie Mae Flex Modification
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide D2-3.2-06 — Fannie Mae Flex Modification
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    paragraph_quote: 'D2-3.2-06, Fannie Mae Flex Modiﬁcation (04/08/2026) Introduction
      This topic contains the following: Documentation Requirements Determining Eligibility
      for a Fannie Mae Flex Modiﬁcation Determining Eligibility for a Fannie Mae Flex
      Modiﬁcation for a Texas Section 50(a)(6) Loan Performing an Escrow Analysis
      Determining the Fannie Mae Flex Modiﬁcation Terms Oﬀering a Trial Period Plan
      and Completing a Fannie Mae Flex Modiﬁcation Soliciting the Borrower for a Fannie
      Mae Flex Modiﬁcation Evaluating or Soliciting a Borrower with a Disaster-Related
      Hardship for a Fannie Mae Flex Modiﬁcation Handling a Complete Borrower Response
      Package Processing a Fannie Mae Flex Modiﬁcation for a Mortgage Loan with Mortgage
      Insurance Processing a Fannie Mae Flex Modiﬁcation for Mortgage Loans Subject
      to a Temporary Interest Rate Buydown Plan Handling Fees and Late Charges in
      Connection with a Fannie Mae Flex Modiﬁcation Documentation Requirements If
      the mortgage loan is current or less than 90 days delinquent, the borrower must
      submit a complete BRP except as described below. If the borrower submitted a
      complete BRP prior to the 90th day of delinquency, the servicer must use the
      information from the Mortgage Assistance Application (Form 710), or equivalent,
      to determine the borrower''s hardship, total income and assets; and evaluate
      the borrower for all workout options in accordance with D2-3.1-01, Determining
      the Appropriate Workout Option. A complete BRP is not required and the servicer
      may solicit an eligible borrower as described in Soliciting the Borrower for
      a Fannie Mae Flex Modiﬁcation if the mortgage loan is 90 or more days delinquent;
      or was previously modiﬁed into a mortgage loan with a step-rate feature, an
      interest rate adjustment occurred within the last 12 months, and the mortgage
      loan became 60 days delinquent after the interest rate adjustment. Note: For
      purposes of determining the submission date in connection with the borrower''s
      submission of a complete BRP, the servicer must use the date of the postmark
      or other independent indicator such as date and time stamp (electronic or otherwise).
      Published May 13, 2026 347 Determining Eligibility for a Fannie Mae Flex Modiﬁcation
      In order to be eligible for a Fannie Mae Flex Modiﬁcation, all of the criteria
      in the following table must be met. ✓ Eligibility Criteria for a Fannie Mae
      Flex Modiﬁcation The mortgage loan must be a conventional ﬁrst lien mortgage
      loan. Note: The property securing the mortgage loan may be vacant or condemned.
      The mortgage loan must be at least 60 days delinquent or the servicer has determined
      that the borrower''s monthly payment is in imminent default in accordance with
      Evaluating a Borrower for Imminent Default for Conventional Mortgage Loan Modiﬁcation
      Eligibility in D2-1-01, Determining if the Borrower’s Mortgage Payment is in
      Imminent Default. The mortgage loan must have been originated at least 12 months
      prior to the evaluation date for the mortgage loan modiﬁcation. The mortgage
      loan must not be subject to • a recourse or indemniﬁcation arrangement under
      which Fannie Mae purchased or securitized the mortgage loan or that was imposed
      by Fannie Mae after the mortgage loan was purchased or securitized, • an approved
      liquidation workout option, • an active and performing repayment plan, • a current
      oﬀer for another retention workout option, or • an active and performing modiﬁcation
      Trial Period Plan. The mortgage loan must not have been modiﬁed three or more
      times previously, regardless of the mortgage loan modiﬁcation program or dates
      of prior mortgage loan modiﬁcations. Note: A payment deferral does not count
      as a mortgage loan modiﬁcation when determining the number of times the mortgage
      loan has previously been modiﬁed for purposes of determining eligibility for
      a Fannie Mae Flex Modiﬁcation. The borrower must not have failed a Fannie Mae
      Flex Modiﬁcation Trial Period Plan within 12 months of being evaluated for eligibility
      for another Fannie Mae Flex Modiﬁcation. Note: Converting from a Trial Period
      Plan to a forbearance plan is not considered a failed Trial Period Plan. Published
      May 13, 2026 348 ✓ Eligibility Criteria for a Fannie Mae Flex Modiﬁcation The
      mortgage loan must not have received a Fannie Mae Flex Modiﬁcation and become
      60 days or more delinquent within the ﬁrst 12 months of the eﬀective date of
      the mortgage loan modiﬁcation without being reinstated. If the borrower has
      experienced a disaster-related hardship, the servicer must follow the requirements
      described in Evaluating or Soliciting a Borrower with a Disaster-Related Hardship
      for a Fannie Mae Flex Modiﬁcation. If the eligibility criteria for a Fannie
      Mae Flex Modiﬁcation is not satisﬁed, but the servicer determines there are
      acceptable mitigating circumstances, the servicer is authorized to oﬀer a mortgage
      loan modiﬁcation outside of these requirements by submitting a request through
      Fannie Mae''s servicing solutions system for review and obtaining prior approval
      from Fannie Mae. Generally, the servicer''s determination of acceptable mitigating
      circumstances is based on a review of the borrower''s complete BRP. If the borrower
      converts from a Trial Period Plan to a forbearance plan, the borrower may subsequently
      be eligible for a Fannie Mae Flex Modiﬁcation upon successful completion of
      the forbearance plan and, if eligible, must be placed in a new Fannie Mae Flex
      Modiﬁcation Trial Period Plan based on the delinquency status at the time of
      the evaluation for the Fannie Mae Flex Modiﬁcation. Determining Eligibility
      for a Fannie Mae Flex Modiﬁcation for a Texas Section 50(a)(6) Loan A Texas
      Section 50(a)(6) loan is eligible for a Fannie Mae Flex Modiﬁcation if the requirements
      described in Determining Eligibility for a Fannie Mae Flex Modiﬁcation are satisﬁed,
      and the mortgage loan is modiﬁed in accordance with applicable law. If the servicer
      receives a notice from the borrower that a mortgage loan modiﬁcation fails to
      comply with Texas Constitution Section 50(a)(6) requirements, the servicer must
      immediately, but no later than seven business days after receipt, take the actions
      listed in the following table. ✓ The servicer must... Inform Fannie Mae''s Legal
      department by submitting a Non-Routine Litigation Form (Form 20) and include
      the borrower notice in its submission. Collaborate with Fannie Mae on the appropriate
      response, including any cure that may be necessary, within the 60-day time frame
      provided by the requirements of Texas Constitution Section 50(a)(6). Performing
      an Escrow Analysis Published May 13, 2026 349 The servicer must perform an escrow
      analysis prior to oﬀering a Trial Period Plan. See Administering an Escrow Account
      in Connection With a Mortgage Loan Modiﬁcation in B-1-01, Administering an Escrow
      Account and Paying Expenses for additional information. Any escrow account shortage
      that is identiﬁed at the time of the mortgage loan modiﬁcation must not be capitalized
      and the servicer is not required to fund any existing escrow account shortage.
      If applicable law prohibits the establishment of the escrow account, the servicer
      must ensure that the T&I payments are paid to date. Determining the Fannie Mae
      Flex Modiﬁcation Terms The servicer must follow the procedures in Obtaining
      a Property Valuation in F-1-27, Processing a Fannie Mae Flex Modiﬁcation for
      determining the property value. The servicer must determine the post-modiﬁcation
      MTMLTV ratio, which must include capitalized arrearages. The servicer must follow
      the procedures in Determining the New Modiﬁed Mortgage Loan Terms in F-1-27,
      Processing a Fannie Mae Flex Modiﬁcation for determining the borrower''s new
      modiﬁed mortgage loan terms. The servicer must request Fannie Mae''s prior written
      approval through Fannie Mae''s servicing solutions system to deviate from the
      prescribed steps for determining the new modiﬁed mortgage payment terms, unless
      a certain step is prohibited by applicable state law. Also see A4-2.1-07, Servicer''s
      Duties and Responsibilities Related to Mortgage Loans with an Outstanding Non-
      Interest-Bearing Balance for additional information. The following table lists
      additional Fannie Mae Flex Modiﬁcation requirements. ✓ The Fannie Mae Flex Modiﬁcation
      must result in... A ﬁxed rate mortgage loan. Note: An ARM or interest-only mortgage
      loan must be converted to a fully amortizing mortgage loan and may not be a
      bi-weekly or daily simple interest mortgage loan. A monthly P&I payment as described
      in the following table. If, at the time of evaluation, the mortgage loan is...
      Then the monthly P&I payment must be... current or less than 31 days delinquent
      less than the borrower''s pre-modiﬁcation P&I payment. 31 or more days delinquent
      less than or equal to the pre-modiﬁcation P&I payment. When the servicer submits
      a request through Fannie Mae''s servicing solutions system for Fannie Mae''s
      approval Published May 13, 2026 350 of a Fannie Mae Flex Modiﬁcation based on
      the borrower''s submission of a BRP, in accordance with applicable law it must:
      immediately provide the borrower with notice of the right to receive a copy
      of all appraisals and other valuations developed in connection with the mortgage
      loan modiﬁcation, and provide the borrower a copy of all appraisals and other
      valuations developed in connection with the mortgage loan modiﬁcation. Prior
      to granting a permanent mortgage loan modiﬁcation, the servicer must place the
      borrower in a Trial Period Plan using the new modiﬁed mortgage loan terms. Oﬀering
      a Trial Period Plan and Completing a Fannie Mae Flex Modiﬁcation For an MBS
      mortgage loan, the servicer must also see Conditions of a First and Second Lien
      Mortgage Loan Modiﬁcation for an MBS Mortgage Loan in D2-3.1-02, Conditions
      of a First and Second Lien Mortgage Loan Modiﬁcation for an MBS Mortgage Loan.
      The servicer must communicate with the borrower that the mortgage loan modiﬁcation
      will not be binding, enforceable, or eﬀective unless all conditions of the mortgage
      loan modiﬁcation have been satisﬁed, which is when all of the following have
      occurred: the borrower has satisﬁed all of the requirements of the Trial Period
      Plan, the borrower has executed and returned a copy of the Loan Modiﬁcation
      Agreement (Form 3179), and the servicer or Fannie Mae (depending upon the entity
      that is the mortgagee of record) executes and dates Form 3179. The servicer
      must use the applicable Evaluation Notice to document the borrower''s Trial
      Period Plan. See Sending a Notice of Decision on a Workout Option in D2-2-05,
      Receiving a Borrower Response Package for requirements relating to the Evaluation
      Notice, and the additional requirements provided in the table below. If the
      servicer sends the Evaluation Notice… Then the servicer must use... on or before
      the 15th day of a calendar month the ﬁrst day of the following month as the
      ﬁrst Trial Period Plan payment due date. after the 15th day of a calendar month
      the ﬁrst day of the month after the next month as the ﬁrst Trial Period Plan
      payment due date. The following table provides the requirements for the length
      of the Trial Period Plan, which must not change even if the borrower makes scheduled
      payments earlier than required. If the mortgage loan at the time of evaluation
      is... Then the Trial Period Plan must be… current or less than 31 days delinquent
      four months long. Published May 13, 2026 351 If the mortgage loan at the time
      of evaluation is... Then the Trial Period Plan must be… 31 or more days delinquent
      three months long. If the borrower fails to make a Trial Period Plan payment
      by the last day of the month in which it is due, the borrower is considered
      to have failed the Trial Period Plan and the servicer must not grant the borrower
      a permanent Fannie Mae Flex Modiﬁcation. The servicer must see E-3.4-01, Suspending
      Foreclosure Proceedings for Workout Negotiations for the requirements for suspending
      foreclosure. The servicer must use the Form Modiﬁcation Cover Letter to communicate
      a borrower''s eligibility for a permanent Fannie Mae Flex Modiﬁcation, which
      must be accompanied by a completed Form 3179. The servicer must ensure that
      the modiﬁed mortgage loan retains its ﬁrst lien position and is fully enforceable
      in accordance with its terms. Electronic documents, signatures, and notarizations
      for Fannie Mae Flex Modiﬁcations are acceptable as long as the electronic record
      complies with Fannie Mae''s requirements. See Selling Guide A2-4.1-03, Electronic
      Records, Signatures, and Transactions for Fannie Mae''s requirements for electronic
      records. The servicer must follow the procedures in Executing and Recording
      the Loan Modiﬁcation Agreement and Adjusting the Mortgage Loan Account Post-Mortgage
      Loan Modiﬁcation in F-1-27, Processing a Fannie Mae Flex Modiﬁcation for preparing,
      executing, and recording Form 3179 and for adjusting the mortgage loan account
      upon completion of the mortgage loan modiﬁcation. The servicer must also follow
      the procedures in Loan Modiﬁcations for an eMortgage in F-1-26, Servicing eMortgages
      for additional requirements when the modiﬁed mortgage loan is an eMortgage.
      Soliciting the Borrower for a Fannie Mae Flex Modiﬁcation Except as speciﬁed
      in the note below, if the mortgage loan is 90 or more days delinquent and the
      servicer determines that the borrower is eligible for a Fannie Mae Flex Modiﬁcation
      and at least one of the following circumstances are met, the servicer must solicit
      the borrower for a Fannie Mae Flex Modiﬁcation between the 90th and 105th day
      of delinquency: the borrower did not submit a complete BRP before the 90th day
      of delinquency; prior to soliciting the borrower, the servicer previously conducted
      an evaluation of the complete BRP and determined that the borrower was not eligible
      for a workout option in accordance with this Guide; or the borrower has rejected
      all other alternatives to foreclosure oﬀered by the servicer. Note: If the mortgage
      loan was previously modiﬁed into a mortgage loan with a step-rate feature, an
      interest rate adjustment occurred within the last 12 months and the mortgage
      loan became 60 days delinquent after the interest rate adjustment, and the servicer
      determines that the borrower is eligible for a Fannie Mae Flex Modiﬁcation without
      having to evaluate a complete BRP, the servicer must send the solicitation to
      the borrower between the 60th and 75th day of delinquency. If for any reason
      the servicer fails to send the solicitation within the prescribed time frame,
      it must send the Published May 13, 2026 352 solicitation as soon as possible
      thereafter. The following table outlines additional scenarios where the servicer
      must evaluate and then, if eligible, solicit a borrower for a Fannie Mae Flex
      Modiﬁcation. Scenario Requirements Soliciting a Borrower for a Fannie Mae Flex
      Modiﬁcation in Relation to a Forbearance Plan If the servicer is unable to achieve
      QRPC as described in Contacting a Borrower During a Forbearance Plan Term in
      D2-3.2-01, Forbearance Plan and the borrower is ineligible for a payment deferral
      as described in Determining Eligibility for a Payment Deferral in D2-3.2-04,
      Payment Deferral, then the servicer must evaluate the borrower for a Fannie
      Mae Flex Modiﬁcation and, if the mortgage loan is at least 90 days delinquent
      and the borrower is otherwise eligible, solicit the borrower within 15 days
      after expiration of the forbearance plan. In addition, if a borrower does not
      respond to the payment deferral solicitation by the acceptance date provided
      in the payment deferral agreement as described in Soliciting the Borrower for
      a Payment Deferral in D2-3.2-04, Payment Deferral, then the servicer must evaluate
      the borrower for a Fannie Mae Flex Modiﬁcation and, if the mortgage loan is
      at least 90 days delinquent and the borrower is otherwise eligible, solicit
      the borrower within 15 days after the expiration of the payment deferral solicitation.
      Published May 13, 2026 353 Scenario Requirements Soliciting a Borrower for a
      Fannie Mae Flex Modiﬁcation in Relation to a Failed Repayment Plan If the borrower
      does not make their total monthly repayment plan payment by the end of the month
      in which it is due and the borrower is ineligible for a payment deferral as
      described in Determining Eligibility for a Payment Deferral in D2-3.2-04, Payment
      Deferral, then the servicer must evaluate the borrower for a Fannie Mae Flex
      Modiﬁcation and, provided QRPC has not been achieved, the mortgage loan is at
      least 90 days delinquent, and the borrower is otherwise eligible, solicit the
      borrower by the 15th day of the following month. In addition, if a borrower
      does not make their total monthly repayment plan payment by the end of the month
      in which it is due and does not respond to the payment deferral solicitation
      by the acceptance date provided in the payment deferral agreement as described
      in Soliciting the Borrower for a Payment Deferral in D2-3.2-04, Payment Deferral,
      then the servicer must evaluate the borrower for a Fannie Mae Flex Modiﬁcation
      and, provided QRPC has not been achieved, the mortgage loan is at least 90 days
      delinquent, and the borrower is otherwise eligible, solicit the borrower within
      15 days after the expiration of the payment deferral solicitation. Soliciting
      a Borrower for a Fannie Mae Flex Modiﬁcation in Relation to a Default on a Payment
      Deferral If the mortgage loan becomes 60 days delinquent within 6 months of
      the payment deferral''s eﬀective date (see D2-3.2-04, Payment Deferral for additional
      information) and the servicer is unable to achieve QRPC, then the servicer must
      evaluate the borrower for a Fannie Mae Flex Modiﬁcation and, if eligible, solicit
      the borrower no later than the 75th day of delinquency. Additionally, the servicer
      is not required to • receive a complete BRP from the borrower, or • have previously
      solicited the borrower for a workout option. When soliciting the borrower for
      a Fannie Mae Flex Modiﬁcation, the servicer must send the borrower the applicable
      Flex Modiﬁcation Solicitation Cover Letter with the Flex Modiﬁcation Trial Period
      Plan Solicitation Oﬀer - Not Based on an Evaluation of a BRP Evaluation Notice,
      or the equivalent, and make appropriate changes to these documents, including
      the applicable Frequently Asked Questions as needed to comply with applicable
      law. Published May 13, 2026 354 The servicer is authorized to continue proactive
      solicitation for a Fannie Mae Flex Modiﬁcation at its discretion, but must not
      solicit a borrower if the property has a scheduled foreclosure sale date within
      60 days of the evaluation date if the property is in a judicial state, or 30
      days of the evaluation date if the property is in a non-judicial state. While
      the borrower remains eligible for a Fannie Mae Flex Modiﬁcation if a payment
      is received following the borrower evaluation or solicitation that results in
      the mortgage loan subsequently becoming less than 90 days delinquent (or less
      than 60 days delinquent if the mortgage loan was previously modiﬁed into a mortgage
      loan with a step-rate feature and an interest rate adjustment occurred within
      the last 12 months), the servicer must ensure that the mortgage loan is at least
      30 days or more delinquent prior to the commencement of the Fannie Mae Flex
      Modiﬁcation Trial Period Plan. Evaluating or Soliciting a Borrower with a Disaster-Related
      Hardship for a Fannie Mae Flex Modiﬁcation The following table provides the
      reduced eligibility criteria for evaluating a borrower with a disaster-related
      hardship for a Fannie Mae Flex Modiﬁcation. ✓ Reduced Eligibility Criteria When
      Evaluating a Borrower with a Disaster-Related Hardship for a Fannie Mae Flex
      Modiﬁcation The disaster event must result in • a ﬁnancial hardship (for example,
      a loss/reduction of income or increase in expenses) that impacts the borrower’s
      ability to pay their current contractual monthly payment, and • either ⚬ the
      property securing the mortgage loan experienced an insured loss, ⚬ the property
      securing the mortgage loan is located in a FEMA-Declared Disaster Area eligible
      for Individual Assistance, or ⚬ the borrower’s place of employment is located
      in a FEMA-Declared Disaster Area eligible for Individual Assistance. Note: See
      Evaluating the Extent and Nature of the Property Damage in D1-3-01, Evaluating
      the Impact of a Disaster Event and Assisting a Borrower for additional information
      on what constitutes a disaster. The mortgage loan must be a ﬁrst-lien conventional
      mortgage loan. The mortgage loan must • have been current or less than two months
      delinquent when the disaster occurred, and • be at least three months delinquent
      as of the date of evaluation. Note: Any payment(s) received after the date of
      evaluation that reduce the amount of delinquency do not impact eligibility,
      provided that the borrower is at least 30 or more days delinquent prior to the
      commencement of the Fannie Mae Flex Modiﬁcation Trial Period Plan. Published
      May 13, 2026 355 ✓ Reduced Eligibility Criteria When Evaluating a Borrower with
      a Disaster-Related Hardship for a Fannie Mae Flex Modiﬁcation The mortgage loan
      must not be subject to • a recourse or indemniﬁcation arrangement under which
      Fannie Mae purchased or securitized the mortgage loan or that was imposed by
      Fannie Mae after the mortgage loan was purchased or securitized, • an approved
      liquidation workout option, • an active and performing repayment plan, • a current
      oﬀer for another workout option, or • an active and performing mortgage loan
      modiﬁcation Trial Period Plan. Note: The number of previous mortgage loan modiﬁcations,
      regardless of the mortgage loan modiﬁcation program or dates of prior mortgage
      loan modiﬁcations, does not impact eligibility for a Fannie Mae Flex Modiﬁcation
      when evaluating a borrower with a disaster-related hardship in accordance with
      the table above. The following table outlines additional scenarios where the
      servicer must evaluate and then, if eligible, solicit a borrower with a disaster-related
      hardship for a Fannie Mae Flex Modiﬁcation. Scenario Requirements Soliciting
      a Borrower with a Disaster- Related Hardship for a Fannie Mae Flex Modiﬁcation
      in Relation to a Forbearance Plan If the servicer is unable to achieve QRPC
      as described in Contacting a Borrower During a Forbearance Plan Term in D2-3.2-01,
      Forbearance Plan and the borrower is ineligible for a disaster payment deferral,
      then the servicer must evaluate the borrower for a Fannie Mae Flex Modiﬁcation
      in accordance with the reduced eligibility criteria in the table above and,
      if the borrower is otherwise eligible, solicit the borrower within 15 days after
      expiration of the forbearance plan. In addition, if a borrower does not respond
      to the disaster payment deferral solicitation by the acceptance date provided
      in the payment deferral agreement as described in Soliciting a Borrower for
      a Disaster Payment Deferral in D2-3.2-05, Disaster Payment Deferral, then the
      servicer must evaluate the borrower for a Fannie Mae Flex Modiﬁcation in accordance
      with the reduced eligibility criteria in the table above and, if the borrower
      is otherwise eligible, solicit the borrower within 15 days after the expiration
      of the disaster payment deferral solicitation. Published May 13, 2026 356 Scenario
      Requirements Soliciting a Borrower with a Disaster- Related Hardship for a Fannie
      Mae Flex Modiﬁcation in Relation to a Failed Repayment Plan If the borrower
      does not make their total monthly repayment plan payment by the end of the month
      in which it is due and the borrower is ineligible for a disaster payment deferral
      as described in Determining Eligibility for a Disaster Payment Deferral in D2-3.2-05,
      Disaster Payment Deferral, then the servicer must evaluate the borrower for
      a Fannie Mae Flex Modiﬁcation in accordance with the reduced eligibility criteria
      in the table above and, if the borrower is otherwise eligible, solicit the borrower
      by the 15th day of the following month. In addition, if a borrower does not
      make their total monthly repayment plan payment by the end of the month in which
      it is due and does not respond to the disaster payment deferral solicitation
      by the acceptance date provided in the payment deferral agreement as described
      in Soliciting the Borrower for a Disaster Payment Deferral in D2-3.2-05, Disaster
      Payment Deferral, then the servicer must evaluate the borrower for a Fannie
      Mae Flex Modiﬁcation in accordance with the reduced eligibility criteria in
      the table above and, if the borrower is otherwise eligible, solicit the borrower
      within 15 days after the expiration of the disaster payment deferral solicitation.
      Published May 13, 2026 357 Scenario Requirements Soliciting a Borrower for a
      Fannie Mae Flex Modiﬁcation in Relation to a Failed Disaster Payment Deferral
      If the mortgage loan becomes 60 days delinquent within 6 months of the disaster
      payment deferral''s eﬀective date (see D2-3.2-05, Disaster Payment Deferral
      for additional information) and the servicer is unable to achieve QRPC, then
      the servicer must evaluate the borrower for a Fannie Mae Flex Modiﬁcation and
      solicit the borrower no later than the 75th day of delinquency, provided that
      the mortgage loan is • a ﬁrst-lien conventional mortgage loan, and • not subject
      to ⚬ a recourse or indemniﬁcation arrangement under which Fannie Mae purchased
      or securitized the mortgage loan or that was imposed by Fannie Mae after the
      mortgage loan was purchased or securitized, ⚬ an approved liquidation workout
      option, ⚬ an active and performing repayment plan, ⚬ a current oﬀer for another
      retention workout option, or ⚬ an active and performing mortgage loan modiﬁcation
      Trial Period Plan. Additionally, the servicer is not required to • receive a
      complete BRP from the borrower, or • have previously solicited the borrower
      for a workout option. When soliciting the borrower for a Fannie Mae Flex Modiﬁcation,
      the servicer must send the borrower the applicable Flex Modiﬁcation Solicitation
      Cover Letter with the Flex Modiﬁcation Trial Period Plan Solicitation Oﬀer -
      Not Based on an Evaluation of a BRP Evaluation Notice, or the equivalent, and
      make appropriate changes to these documents, including the applicable Frequently
      Asked Questions and as needed to comply with applicable law. The servicer is
      authorized to continue proactive solicitation for a Fannie Mae Flex Modiﬁcation
      based on the reduced eligibility criteria at its discretion, but must not solicit
      a borrower if the property has a scheduled foreclosure sale date within 60 days
      of the evaluation date if the property is in a judicial state, or 30 days of
      the evaluation date if the property is in a non-judicial state. Handling a Complete
      Borrower Response Package The servicer must acknowledge receipt of the BRP in
      accordance with Acknowledging Receipt of a Borrower Published May 13, 2026 358
      Response Package in D2-2-05, Receiving a Borrower Response Package and provide
      any complete or incomplete information notice. If the borrower submits a complete
      BRP when the mortgage loan is 90 or more days delinquent, the servicer must
      evaluate the borrower for all workout options in accordance with D2-3.1-01,
      Determining the Appropriate Workout Option. If the borrower does not accept
      the Fannie Mae Flex Modiﬁcation solicitation oﬀer as described above, the servicer
      must resume follow-up solicitation for an incomplete BRP in accordance with
      this Guide and applicable law. The following table provides the servicer''s
      requirements if the borrower submitted a complete BRP prior to the 90th day
      of delinquency but the servicer is in the process of soliciting the borrower
      for a Fannie Mae Flex Modiﬁcation in accordance with Soliciting the Borrower
      for a Fannie Mae Flex Modiﬁcation. See Documentation Requirements to determine
      the submission date of a complete BRP. If the borrower submitted a complete
      BRP prior to the 90th day of delinquency, and the servicer receives the complete
      BRP… Then the servicer must… prior to soliciting the borrower for a Fannie Mae
      Flex Modiﬁcation review the BRP in accordance with D2-2-05, Receiving a Borrower
      Response Package, and evaluate the borrower for all workout options in accordance
      with Chapter D2-3 Fannie Mae’s Home Retention and Liquidation Workout Options,
      including the Fannie Mae Flex Modiﬁcation based on borrower submission of a
      complete BRP. Published May 13, 2026 359 If the borrower submitted a complete
      BRP prior to the 90th day of delinquency, and the servicer receives the complete
      BRP… Then the servicer must… after soliciting the borrower for a Fannie Mae
      Flex Modiﬁcation and prior to sending the Loan Modiﬁcation Agreement to the
      borrower for signature either • evaluate the borrower for all workout options
      in accordance with Chapter D2-3 Fannie Mae’s Home Retention and Liquidation
      Workout Options, including the Fannie Mae Flex Modiﬁcation based on borrower
      submission of a complete BRP, if the borrower has not accepted the Fannie Mae
      Flex Modiﬁcation solicitation oﬀer, or • re-evaluate the borrower for a Fannie
      Mae Flex modiﬁcation based on borrower submission of a complete BRP if the borrower
      has accepted the Flex Modiﬁcation solicitation oﬀer. Note: If the P&I payment
      amount based on the submission of a complete BRP is less than the P&I payment
      amount reﬂected in the solicitation Trial Period Plan, inform the borrower that
      if they make the Trial Period Plan payments in accordance with the plan, the
      mortgage loan will be permanently modiﬁed with the lower P&I payment amount
      which will be reﬂected in the Loan Modiﬁcation Agreement. Processing a Fannie
      Mae Flex Modiﬁcation for a Mortgage Loan with Mortgage Insurance The servicer
      must see F-2-06, Mortgage Insurer Delegations for Workout Options for the list
      of conventional mortgage insurers from which Fannie Mae has obtained delegation
      of authority on behalf of all servicers, which allows the servicer to process
      a Fannie Mae Flex Modiﬁcation without obtaining separate mortgage insurer approval
      at the company or loan level. Processing a Fannie Mae Flex Modiﬁcation for Mortgage
      Loans Subject to a Temporary Interest Rate Buydown Plan The servicer must apply
      any funds it holds in association with a temporary interest rate buydown plan
      to reduce the arrearages to be capitalized in connection with a Fannie Mae Flex
      Modiﬁcation in accordance with F-1-27, Processing a Fannie Mae Flex Modiﬁcation,
      subject to the terms of the buydown agreement. The servicer must use the applicable
      Evaluation Notice to document the borrower''s Trial Period Plan and must make
      appropriate changes as necessary to reﬂect the application of any buydown funds
      as a condition of completing the Fannie Mae Flex Modiﬁcation. Published May
      13, 2026 360 Handling Fees and Late Charges in Connection with a Fannie Mae
      Flex Modiﬁcation The servicer must not charge the borrower administrative fees.
      The servicer is authorized to assess late charges during the Trial Period Plan.
      The servicer must waive all late charges, penalties, stop payment fees, or similar
      charges upon the borrower''s conversion to a permanent mortgage loan modiﬁcation.
      The servicer must follow the procedures in Reimbursement for Expenses Associated
      with Workout Options in F-1-05, Expense Reimbursement for advancing funds and
      requesting reimbursement. Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
      Announcements Issue Date Announcement SVC-2026-03 April 8, 2026 Announcement
      SVC-2025-05 August 13, 2025 Announcement SVC-2024-06 November 13, 2024 Announcement
      SVC-2023-05 October 11, 2023 Announcement SVC-2023-03 May 10, 2023 Announcement
      SVC-2020-04 September 9, 2020 Section D2-3.3, Home Liquidation Workout Options'
  judgment: false
