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New Refinance Program Benefits More Homeowners

A new mortgage refinancing program from Fannie Mae targeted to low- and moderate-income borrowers opened to applicants June 5.

With mortgage rates still hovering not far from all-time lows, it is still a great time for homeowners to consider refinancing However, due to Covid 19 overlays most  lenders have imposed tight credit standards, which means some low- and moderate-income homeowners may have been denied the opportunity to refinance to a lower rate.

With that in mind, the Federal Housing Finance Agency (FHFA) in April announced a new refinance option for low-income borrowers with mortgages owned by Fannie Mae and Freddie Mac. Freddie Mac’s version of the program, called Refi Possible, will launch August 30. FHFA estimates that borrowers who take advantage of the new refinance option could save $100 to $250 a month depending upon their current rate and balances.

The new refinance option requires that a refi results in a monthly savings of at least $50, and a reduction in the borrower’s interest rate of at least 50 basis points. For properties not eligible for an appraisal waiver, the program offers a $500 credit for appraisal fees.

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The program lets borrowers with balances of less than $300,000 out of the controversial adverse market refinance fee that Fannie and Freddie imposed last year on refinances. The new program helps spread out the refi savings that mainly benefited financially more “stable” homeowners to those who may not have been as fortunate.

This refi program has very specific eligibility requirements. To qualify, you must:

  1.  Have a mortgage backed by Fannie on a one-unit single-family property. Investment properties and second homes aren’t eligible. (Freddie Mac is expected to start its own similar program this summer.)

  2.  Make 80 percent or less of your area’s median income.

  3. Not have missed a payment in the past six months. Borrowers can have no more than one missed payment in the past year.

  4. Have a loan-to-value ratio of 97 percent or less, a debt-to-income ratio of 65 percent or less and a FICO score of 620 or higher.


Borrowers should contact their lenders for more information. Not all lenders will participate in the program, so choose a trusted advisor. www.phillymortgageteam@afncorp.com 


If you have any questions please reach out to us at PhillyMortgageTeam@afncorp.com

Article Written By: Kevin Berju

Looking for a Lender in Philadelphia? Contact the Philly Mortgage Team. Click below.

 

Kevin Berju starts Philly Mortgage Team with over 25 years in the mortgage industry. Prior to working with residential and commercial mortgages, Kevin graduated with a business degree from Temple University, owned his own business, and worked as an agent for years in both commercial & residential Real Estate. With Kevin’s diverse knowledge of the real estate and mortgage industries, his clients are thoroughly guided throughout their home buying or refinance process. As a result of his knowledge, attention to detail, responsiveness to his clients, and exceptional work ethic, Kevin was awarded the Five Star Mortgage Professional recognition in Philadelphia Magazine for the past successive years as well as reaching the top 1% of all originators country wide since 2012 as designated by Mortgage Executive magazine.

As a mortgage professional for over 2 decades, Kevin is an invaluable resource for both first-time and experienced home buyers. With his accomplishment of the Certified Mortgage Planning Specialist designation, Kevin is placed in an elite group of the top 5% of mortgage professionals in the industry. Looking to Purchase or Refinance in Pennsylvania, New Jersey, or Florida? Kevin Berju is the Lender for You!

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