FHFA RefiNow Program Announced for Low-Income Borrowers
What Is the FHFA RefiNow™ Program?
According to FHFA, RefiNow™ is a new refinance option for low-income borrowers with Enterprise-backed single-family mortgages. It will specifically help to reduce monthly mortgage payments for borrowers who did not take advantage of 2020’s historically low rates.
Available to eligible borrowers this summer, the new refinance options include the following
requirements:
The borrower’s monthly mortgage payment be reduced by at least $50, and the interest rate reduced by at least 50-basis points;
If the borrower is not eligible for an appraisal waiver, then a lender must credit up to $500 for the appraisal; and
Borrowers with loan balances at or below $300,000, will receive a waiver of the 50-basis point adverse market refinance fee, that went into effect in December 2020.
Director of FHFA Mark Calabria said that more than 2 million low-income families did not take advantage of the record low mortgage rates last year by refinancing. “This new refinance option is designed to help eligible borrowers who have not already refinanced save between $1,200 and $3,000 a year on their mortgage payment.”
How Borrowers Can Qualify for RefiNow™
To qualify for RefiNow™, a borrower must have an Enterprise-backed single-family mortgage that is one-unit and owner-occupied. They must also:
Have an income at or below 80% of the area median income;
Have not missed a payment in the past 6 months, and not have more than one missed payment in the last 12 months; and
Have a DTI ratio above 65%, a FICO score lower than 620, and an LTV lower than 97%.
Look for FHFA in the near future to work with the Enterprises and lenders to encourage marketing and outreach efforts to reach these eligible borrowers. Reach out to Sandler Law Group to learn more.
In this blog post concerning legal and regulatory matters of interest to the mortgage industry, Sandler Law Group (SLG) provides general information and industry observations that are not motivated by or concerned with a particular past occurrence or event, or a specific existing legal problem of which SLG is aware. Nothing published herein is intended to constitute legal advice and the use of the blog post by a reader shall not give rise to an attorney-client relationship with SLG. SLG expressly disclaims any representation of accuracy or reliability as to the content of this blog post, as well as any obligation to maintain such content over time or to ensure it is free from errors. Brad Cope is the attorney responsible for the SLG content of this blog post. Unless otherwise noted, the attorneys of SLG are not certified by the Texas Board of Legal Specialization.