Refi Possible and RefiNow: Tailored Refinance Options for Low-Income Homeowners

May 6

For homeowners looking to lower their mortgage payments, Fannie Mae's RefiNow and Freddie Mac's Refi Possible offer targeted solutions for those with lower incomes, providing an opportunity to secure more manageable mortgage rates and monthly payments.

Understanding RefiNow and Refi Possible Programs

These programs are specifically designed to make refinancing more accessible for eligible lower-income homeowners, ensuring they can benefit from reduced mortgage rates and monthly payments.

Eligibility Requirements

To qualify for RefiNow or Refi Possible, your mortgage must be held by either Fannie Mae or Freddie Mac. Additionally, refinancing must lead to a reduced interest rate and monthly payment, and you must meet specific criteria related to credit score, income, payment history, and other borrower specifics.

Program Specifics

Income Limits: Your household income must not exceed 80% of the area median income.
Credit Requirements: A minimum credit score of 620 is required for eligibility.
Mortgage Seasoning: Your mortgage must be at least one year old but no older than ten years.
Debt-to-Income Ratio: Must be 65% or less.
Loan-to-Value Ratio: Up to 97% for most properties, and 95% for manufactured homes.
Payment History: Applicants should have no more than one 30-day late payment in the past year and no 60-day late payments in the past 12 months.

Benefits of Refinancing with RefiNow and Refi Possible

These refinancing options are designed to reduce financial strain by lowering monthly payments and interest rates.

Financial Advantages

Monthly Savings: Guarantee a reduction in monthly payments by at least $50 and a decrease in interest rate by at least 0.5%.
Non-Cash-Out Refinance: Any excess of $250 generated during refinancing is applied towards closing costs or the loan principal.
Appraisal Credit: Up to $500 credit may be provided to cover appraisal costs if an appraisal waiver is not granted.

Impact on Homeowners

According to the Federal Housing Finance Agency, eligible homeowners could save an average of $250 per month by taking advantage of these refinancing options.

How to Get Started with RefiNow and Refi Possible

If you're considering refinancing, ensure that potential lenders offer RefiNow or Refi Possible. It's important to specify your interest in these programs to align with your current mortgage holder—either Freddie Mac for Refi Possible or Fannie Mae for RefiNow.

By exploring RefiNow and Refi Possible, you can potentially reduce your mortgage expenses significantly, helping make your home ownership more affordable and sustainable.

Drew Nordean