Freddie Mac Extends Hurricane Relief

May 1, 2006

Freddie Mac Extends Hurricane Relief Until Aug. 31, 2006 In Hardest Hit Gulf Coast Counties And Parishes

McLean, VA – Freddie Mac is extending many of its emergency hurricane relief policies through August 31, 2006 in the Gulf Coast counties and parishes affected by Hurricanes Katrina and Rita, according to a May 1 Guide Bulletin sent to the company's Seller/Servicers. The extended policies had been scheduled to expire at the end of May. The new Bulletin also makes several underwriting policy changes intended to promote the housing recovery in the least damaged Gulf Coast jurisdictions. "The May 1 Bulletin continues to give servicers the authority to extend relief to borrowers with properties in the worst disaster areas, while recognizing that there are now more Gulf Coast counties and parishes with the economic strength to justify a return to pre-Katrina business operations," explained Janet Eakes, senior vice president of Freddie Mac's operations division.

Freddie Mac's hurricane policies apply only in federally designated disaster areas where FEMA individual assistance is available. To better support borrower and community recovery efforts Freddie Mac classifies Gulf Coast counties and parishes by their degree of storm damage and adjusts its policies accordingly. Zone One counties have minimal damage, Zone Two moderate damage and Zone Three severe damage. (See below for list of counties and parishes by zone.)

Freddie Mac is extending in every zone its ban on reporting borrowers with storm related forbearance or repayment plans to credit bureaus and a streamlined loan modification process designed to expedite workouts to help storm victims avoid foreclosure.

Lenders must continue to obtain Freddie Mac's prior approval before initiating property preservation activities in Zones Two and Three other than decisions to access abandoned property for insurance claims, the Bulletin says.

At the same time, Freddie Mac continues to encourage servicers to extend mortgage relief to borrowers with Freddie Mac loans on a case-by-case basis regardless of zone. Freddie Mac authorizes servicers to provide a wide range of mortgage relief to storm victims, including forbearance for up to one year from the date of the disaster. (Freddie Mac mortgage relief options are described in the "Owning and Keeping a Home" section on

The Bulletin eases several post-hurricane underwriting requirements in Zone One. For example, mortgages secured by Zone One single-family properties are eligible for low down payment mortgages with a maximum Loan-to-Value ratio (LTV) of 100 percent. The previous maximum had been 95 percent. The Bulletin also removes special collateral requirements for undamaged properties in Zone One.

For more information, lenders can contact their Freddie Mac Account Representative or review the May 1 Guide Bulletin .

Freddie Mac Zone Designations by County/Parish*


Zone One (minimal damage)

Zone Two (moderate damage)

Zone Three (severe damage)


Choctaw, Greene, Hale, Marengo, Pickens, Sumter, Tuscaloosa.

Baldwin, Clarke, Washington.



Allen, Ascension, East Baton Rouge, East Feliciana, Evangeline, Iberville, Lafayette, Livingston, Pointe Coupee, Sabine, St. Landry, St. Martin, Vernon, West Baton Rouge, West Feliciana.

Assumption, Acadia, Beauregard, Iberia, Jefferson Davis, Lafourche, St. Charles, St. Helena, St. James, St. John The Baptist, St. Mary, Tangipahoa, Terrebonne, Vermilion, Washington.

Calcasieu, Cameron, Jefferson, Orleans, Plaquemines, St. Bernard, St. Tammany.


Adams, Amite, Attala, Choctaw, Claiborne, Copiah, Covington, Franklin, Hinds, Holmes, Humphreys, Jefferson, Jefferson Davis, Kemper, Lauderdale, Lawrence, Leake, Lincoln, Lowndes, Madison, Neshoba, Newton, Noxubee, Oktibbeha, Pike, Rankin, Scott, Simpson, Smith, Warren, Winston, Wilkinson, Yazoo.

Clarke, Greene, Forrest, Jasper, Jones, Lamar, Marion, Perry, Walthall, Wayne.

George, Hancock, Harrison, Jackson, Pearl River, Stone.


Angelina, Fort Bend, Brazoria, Galveston, Harris, Montgomery, Nacogdoches, Polk, San Jacinto, Shelby, Trinity, Tyler, Walker.

Chambers, Hardin, Liberty, Sabine, San Augustine.

Jasper, Jefferson, Newton, Orange.

*Designation changes are in italics.

Source: Freddie Mac

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