Now Open: Fannie Mae Debuts RefiNow Option for Low Income Homeowners (2024)

FAQs

Now Open: Fannie Mae Debuts RefiNow Option for Low Income Homeowners? ›

Available to borrowers at or below 100% of the area median income with debt-to-income (DTI) ratios up to 65%, RefiNow offers features that help to address some of the barriers to refinance and is a great option for creditworthy borrowers who may not have previously qualified.

Requirements to qualify for RefiNow

Have a Fannie Mae-owned mortgage on your primary residence. Earn income below the applicable limit, which is currently 100% of your area's median income (AMI) Have no missed mortgage payments over the past six months, and no more than one missed payment in the past 12 months.

RefiNow™ is an affordable refinancing option for qualifying homeowners aimed at making it easier and less expensive to reduce monthly housing costs. The matrix below summarizes our eligibility guidelines for RefiNow. Please refer to Lender Letter LL-2021-10 for additional information.

HARP Eligibility

You are current on your home loan. This means you have not had any over-30-days-late payments in the last six months, and no more than one in the last 12 months. Your home is your primary residence, a 1-unit second home, or a 1- to 4-unit investment property. Your loan is owned by Fannie Mae.

You need a decent credit score: The minimum credit score to refinance typically ranges from 580 to 680, depending on your lender and loan program. Your debt-to-income ratio (DTI) can't be too high: If you've taken on a lot of credit card debt and other loans, your refinance may not be approved.

RefiNow™ is a refinance mortgage option with flexibilities aimed at making it easier and less expensive for qualifying homeowners to reduce their monthly housing costs by taking advantage of today's historically low interest rates. © 2023 Fannie Mae.

If you have a conventional mortgage—one backed by Fannie Mae or Freddie Mac—you might be able to refinance immediately after closing your home purchase or a previous refi. Keep in mind that many lenders have a six-month “seasoning period” before a current borrower can refinance with the same company.

Is Fannie Mae the FHA? No. The Federal Housing Administration (FHA) is a government agency that insures loans made by lenders to borrowers with low to moderate incomes. FHA loans have more relaxed credit standards than conventional loans purchased by Fannie Mae and Freddie Mac.

Fannie Mae is a leading source of mortgage financing in the United States. We don't originate mortgage loans or lend money directly to borrowers. Instead, we purchase mortgage loans made by lenders, who are then able to use those funds to offer mortgage loans to more people.

If you already have a Fannie Mae-owned loan, you can refinance with as little as 3% equity. If your mortgage isn't owned by Fannie Mae, you can refinance with as little as 5% equity. Co-borrower flexibility. Not all borrowers have to reside at the property.

What is the NYC Homeowner Relief Program? ›

The New York State Homeowner Assistance Fund (“NYS HAF”) is a federally-funded program dedicated to assisting homeowners who are at risk of default, foreclosure or displacement as result of a financial hardship caused by the COVID-19 pandemic.

The program helps underwater and near-underwater homeowners with harp 2.0 refinance their mortgages. It was designed to help responsible homeowners who are current on their mortgage payments take advantage of low rates, even though the value of the home has declined due the recent housing crisis.

The program has since ended, but it was intended to provide relief after the financial crisis of 2008. HARP was created to help underwater and near-underwater homeowners refinance their mortgages due to falling home prices.

Conventional refinancing is one of the most common types. You'll need at least a 620 credit score to refinance your conventional loan (or into a conventional loan) — though at that score, you'll likely need a DTI ratio of 36 percent or less, which can be limiting.

A general rule of thumb is that you should have at least 20% equity in your home if you want to refinance. If you want to get rid of private mortgage insurance, you'll likely need 20% equity in your home. This number is often the amount of equity you'll need if you want to do a cash-out refinance, too.

You don't need a down payment to refinance, but you'll likely have to come up with cash for closing costs. Some lenders let you roll closing costs into the mortgage to avoid upfront expenses. You can also try negotiating with the lender to waive them.

The basic requirements of a streamline refinance are: The mortgage to be refinanced must already be FHA insured. The mortgage to be refinanced must be current (not delinquent). The refinance results in a net tangible benefit to the borrower.

Under most FHA programs, the borrower is required to make a minimum down payment into the transaction of at least 3.5% of the lesser of the appraised value of the property or the sales price.

A non-conforming mortgage is one of several types of home loans. It's called “non-conforming” because the borrower qualifying standards or structure fall outside conforming criteria that allows the two major government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac, to buy the loan.