Fannie Mae has updated its servicing guidelines for temporary interest-rate buydowns, calling for immediate adoption ahead of a Nov. 1 mandate.

The changes outline how to apply buydown funds in different workout scenarios, along with updated borrower notification requirements.

The guidance, posted to Fannie’s site on Aug. 13 in a bulletin, comes as secondary market attention to temporary buydowns has prompted new directives from Ginnie Mae and Freddie Mac.

Fannie Mae, which purchases a large share of U.S. mortgages, said it expects servicers to give borrowers advance notice before a buydown ends and their interest rate rises.

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