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Refinance Option Program Now Available for Low-Income Families

Posted by Anna Deibert on May 13, 2021 8:22:46 AM

On April 28th, FHFA announced the launch of a new refinance option program specifically for low-income families.

 

Earlier this month, Fannie Mae introduced the new program under the name RefiNow which will be available on June 5th. Freddie Mac version of the program, Refi Possible, will be available on August 30th.

 

The new refinance option program has specific eligibility requirements including:

  • Must be a Fixed Rate mortgage
  • Can only be a Rate Term Refinance loan purpose
  • Must be a 1-unit Prime Residence (Condominiums, Cooperatives and Manufactured Homes are allowed)
  • Cannot have a mortgage with:
    • a loan-to-value ratio greater than 97%
    • a dept-to-income ratio above 65%
    • a FICO score lower than 620 (non-traditional credit is not allowed)
    • a High Balance or Super Conforming loan amount 

To be eligible a borrower’s current mortgage and financial status needs to fall under the below guidelines:

  • Current loan must be a First Lien owned by FNMA or FHLMC and cannot be a refinanced program mortgage
  • Have no missed payments in the past six months, and no more than one missed payment in the past 12 months
  • Have an income at or below 80% of the area median income (AMI)
    • Fannie Mae’s AMI tool can be found here
    • Freddie Mac’s AMI tool can be found here
    • The agencies are not allowed to use other AMI tools such as the HUD User tool

There is currently no expiration date set for the new Refinance Option program. Be on the lookout for further communications as it pertains to Mortech’s implementation of this new program into our pricing engine. And as always, don’t hesitate to reach out to your Customer Success Manager or the Support team at support@mortech-inc.com with any questions you have on these new programs.