Supplemental Consumer Information Form: Required or Not?

Last summer Fannie Mae (Federal National Mortgage Association) announced in Lender Letter LL-2022-03 the mandatory use of the Supplemental Consumer Information Form (SCIF). This requirement applies to loans sold to either Fannie Mae or Freddie Mac (Federal Home Loan Mortgage Corporation) with application dates of March 1, 2023 or later.

Referred to as Form 1103, the Supplemental Consumer Information Form captures information about homeownership education or housing counseling programs completed by the borrower along with the borrower’s language preference.

Homeownership Education and Housing Counseling

Quality homeownership education and housing counseling can provide borrowers with the information and resources to make informed decisions, which should in turn lead to sustained long-term homeownership. The bank or borrower should complete the education and counseling sections of the form if required by B2-2-06 of the Selling Guide, the section on Homeownership Education and Housing Counseling. The top section of Form 1103 can also be completed if the borrower obtained education or counseling even if not required for the specific transaction.

Language Preference

The bank must present the form to the borrower to provide a preferred language preference. The borrower is given eight choices from which to choose: English, Chinese, Korean, Spanish, Tagalog, Vietnamese, Other, and “I do not wish to respond.” The borrower is not required to select any of the options in the language preference section and may leave this section blank. As a result, there may be instances where the Form 1103 in the loan file only includes only the lender loan number/universal loan identifier and the borrower’s name. This section of Form 1103 informs the borrower that their answer to “language preference” will NOT negatively affect the mortgage application and the bank may choose to explain the instructions and other information provided.

Various mortgage resources, including the Form 1003 Uniform Residential Loan Application and Form 1103 Supplemental Consumer Information Form are available through Fannie Mae in English, Chinese, Korean, Spanish, Tagalog, and Vietnamese.

The use of Form 1103 is a requirement of the GSEs (collectively Fannie Mae & Freddie Mac) but is not a regulatory requirement. So, if you’re selling a loan to the GSEs you’d be required to use Form 1103 to capture information about homeownership education or housing counseling as well as language preference, but if this loan is being kept in-house as a portfolio loan, then you would not need to use Form 1103 or capture the information sought by Form 1103. If you’re selling the loan to an investor other than the GSEs, then you’d need to review that specific investor’s requirements to see if they also require the use of Form 1103.

Undoubtedly questions will arise about Form 1103, such as if you’re required to use it in a particular situation, and you can always reach out to our hotline advisors for guidance. We’re available to help you understand the requirements and best practices for your situation.