The FHFA has announced a new refi program to benefit low income borrowers with single family mortgages. These mortgages will be backed by Fannie Mae and Freddie Mac. This new program is designed to help those who were not in a position to take advantage of 2020’s low rates.
This new option could save borrowers and average of $100-$250 a month on their mortgage but lenders will be required to ensure it saves the borrower at least $50 a month. Simultaneously, the borrower’s interest rate will drop by at least 50 basis points. Lenders will also provide a maximum $500 credit for an appraisal if the borrower is not eligible for an appraisal waiver.
“We look forward to implementing Fannie Mae’s new RefiNow option as soon as possible to ensure all eligible homeowners are able to avail themselves of this money saving opportunity,” says Fannie Mae’s CEO, Hugh Frater.
Qualifications for this program:
- Must own a GSE-backed mortgage
- Income must be at or below 80% of the area’s median income
- Current on mortgage payments for the last 6 months and missing no more than 1 payment in the last year
- Must not have a mortgage with an LTV ratio greater than 97% and DTI cannot be higher than 65%
- FICO score must be 620 or higher
The Federal House Financing Agency plans to roll this out to those eligible tentatively beginning this summer.
Contact one of our Loan Officers today to see if you qualify!
Source: FHFA releases new refi option for low-income borrowers – HousingWire