September 30, 2021

Bulletin 2021-093 Fannie Mae RefiNow and Freddie Mac Refi Possible Refinance Options

Fannie Mae RefiNow and Freddie Mac Refi Possible Refinance Options

Newrez LLC "Newrez" Approved Correspondent Clients: Newrez is pleased to announce the release of Fannie Mae’s RefiNow and Freddie Mac’s Refi Possible options. RefiNow and Refi Possible offers expanded eligibility to benefit low-income borrowers to take advantage of the low interest rate environment.

 

Eligibility

 

  • RefiNow
    • Fannie Mae must own the existing mortgage being refinanced
    • DU Approve/Eligible required; manually underwritten loans not permitted
    • DU will evaluate all eligible limited cash-out refinance (LCOR) loans for the RefiNow program and will issue a message that the loan casefile was underwritten according to RefiNow
  • Refi Possible
    • Freddie Mac must own the existing mortgage being refinanced
    • LPA Accept required; manually underwritten loans not permitted
    • All loans submitted to LPA will be evaluated using certain eligibility criteria of Refi Possible. If the loan meets certain eligibility criteria, LPA will return a message indicating that this loan meets Refi Possible income limit requirements and the loan should be resubmitted with the Refi Possible offering identifier to be assessed as a Refi Possible mortgage.
  • The following applies to both RefiNow and Refi Possible
    • Borrower’s current income must be less than or equal to 80% of the area median income (AMI) for the subject property
    • Existing loan must be at least 12-months old but not more than 120 months old from the original note date to the new note date
    • Borrower must receive the following benefits with the refinance
      • Monthly payment must be reduced by at least $50.00
      • Interest rate must be reduced by at least .50%
  • Single-family, primary residences
  • Maximum 97% LTV/CLTV
  • Debt to income ratio up to 65%
  • Minimum 620 credit score
  • Housing payment history for existing mortgage
    • No late payments in the most recent six months; and
    • No more than one late payment in months 7 to 12
  • Cash back to the borrower not to exceed $250
  • Financed closing costs, prepaid items, and points not to exceed $5,000
  • A $500 appraisal credit will be provided, at closing, if an appraisal is obtained
  • A project review is not required for condo and PUD projects with the following exceptions
    • Confirm that the project is not a condo or co-op hotel, or motel, houseboat, timeshare, or segmented ownership project
    • Confirm the appropriate property and flood insurance
  • Standard Mortgage Insurance coverage is required on all loans with an LTV greater than 80% 

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