Fannie Mae RefiNow is an affordable refinancing option for qualifying homeowners aimed at making it easier to reduce monthly housing costs. The program is aimed to help homeowners by taking advantage of today’s historically low-interest rates.
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At a high level, RefiNow would be a better refinance option for borrowers with higher DTIs and income up to 100% of the applicable area median income (AMI) limit who have limited funds to pay for upfront appraisal costs. A detailed comparison between HomeReady and RefiNow can be found here on the Fannie Mae website.
Mortgage insurance coverage for RefiNow loans is not restricted to the current mortgage insurer on the existing loan. However, DU will identify the insurer that is currently providing coverage. Lenders should consult their mortgage insurer to determine their eligibility guidelines for RefiNow loans. The appropriate level of mortgage insurance must be obtained in accordance with B7-1-02, Mortgage Insurance Coverage Requirements of the Selling Guide. Standard coverage and minimum coverage (with corresponding LLPAs) are both permissible subject to Selling Guide requirements.
Fannie Mae will provide a $500 credit to the lender for RefiNow loans when an appraisal was obtained, regardless of the exact cost of the appraisal. The $500 must be passed to the borrower in full. Whole loans will receive the $500 credit immediately upon sale to Fannie Mae, while loans delivered into an MBS pool will receive the credit as part of a monthly settlement of proceeds.
Fannie Mae requires that the full $500 benefit be provided to the borrower but does not specify how that must be operationalized provided the lender complies with regulatory requirements.
No, RefiNow is a standalone offering and may not be combined with HomeReady. A summary comparison of HomeReady and RefiNow can be found here on the Fannie Mae website.
At a high level, a Refi Possible mortgage would be a better refinance option for borrowers who may not qualify for Home Possible; this could include borrowers with higher debt-to-income (DTI) ratios or who have limited funds to pay for upfront appraisal costs. However, both offerings provide benefits to serve lower-income borrowers.
Check out our Refi Possible and Home Possible Refinance Comparison grid to view a side-by-side comparison of product features. In addition, the complete requirements of each offering may be found in the Freddie Mac Single-Family Seller/Servicer Guide (Guide).
Refer to Guide Chapter 4501 Home Possible® Mortgages.
Refer to Guide Chapter 4302: Freddie Mac Refi PossibleSM Mortgages.
Refi Possible mortgages are available for all eligible fixed-rate mortgage terms.
All property types eligible under the Guide, including manufactured homes.
No, these are two distinct Freddie Mac product offerings with each having benefits to serve lower-income borrowers. These offerings cannot be combined. The Seller should review complete requirements for Refi Possible and Home Possible to determine which of the two offering suits the borrower best.
Yes. There is no minimum indicator score required for eligibility for Refi Possible mortgages. However, the seller must identify and deliver an indicator score for all Refi Possible mortgages in accordance with the requirements of Guide Section 5203.2(e) If the seller determines that there is no usable credit score due to insufficient information or inaccurate information, the mortgage is not eligible for sale to Freddie Mac.
No. If no borrower has a usable credit score, then the mortgage does not have an Indicator Score and is not eligible for delivery to Freddie Mac as Refi Possible.
If the borrower makes all payments while the loan is in forbearance, a mortgage can be refinanced as a Refi Possible mortgage. The mortgage must meet Refi Possible payment history requirements, which does not allow recent missed payments.
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