New Refinance Option For Low Income Borrowers
Federal Housing Finance Agency (FHFA) announces new refinance option for low-income borrowers
The Federal Housing Finance Agency (FHFA) announced that Fannie Mae (FNMA) and Freddie Mac (FHLMC) will offer a new refinance option for low-income borrowers starting this summer.
Fannie Mae will call the new refinance option RefiNow and Freddie Mac will call it Refi Possible. This new option is intended to help low-income borrowers take advantage of record low mortgage rates. FHFA estimates that borrowers who refinance with this option will save an average of $100 to $250 a month.
- Existing loan must be owned by FNMA and FHLMC
- Refinance must reduce the borrower’s monthly mortgage payment by $50 and reduce their interest rate by half a percent
- Lenders will provide a max credit of $500 towards the appraisal if borrower is not eligible for an appraisal waiver
- Adverse Market Refinance Fee is waived for loan amounts at or below $300,000
- Borrower income must be at or below 80% of the area median income
- Borrowers must be current on mortgage payments for the last 6 months with no more than 1 missed payment in the last 12 months
- Property must be 1-unit, single-family residence, and owner-occupied
- Minimum borrower FICO is 620
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Information is valid as of 4/28/2021 and is subject to change. Limitations and restrictions apply; please ask for details.