Low-Income Homeowners Receive Great News from Fannie Mae!
Exciting news from Fannie Mae! Due to the latest stimulus announcement from the FHFA, Fannie Mae has launched a new refinance option for any mortgage they guarantee. The new program, titled RefiNow, allows low-income households to take advantage of the continued low mortgage rates.
Refinancing can make a massive difference in a household’s budget by lowering monthly payments or securing a different loan term. Now, those who need this flexibility the most may have access!
What is the RefiNow Program?
2020 saw historically low rates, but the FHFA found that “…more than 2 million low-income families did not take advantage of the record low mortgage rates by refinancing.” The RefiNow program seeks to change that by making refinances more accessible.
Fannie Mae introduced this program to assist low-income households by providing certain concessions and reduction minimums. This will help those households reduce their payments to alleviate financial pressure and allow more homeowners to stay in their homes if they face financial hardship. RefiNow is also an excellent program to help homeowners build their credit responsibly. If your mortgage is owned or guaranteed by Fannie Mae, you may be eligible to refinance your mortgage under the RefiNow program.
How Can You Benefit from Refinancing?
RefiNow hopes to increase the amount of low-income household refinances by assisting in the form of a minimum interest reduction of .5% and a minimum monthly payment decrease of at least $50. While it may not seem like much, these reductions can add up over time to save families thousands.
Further, the program also offers a $500 lender credit towards a borrower’s appraisal if it cannot be waived. The RefiNow program could save borrowers between $100 to $250 on their refinance fees in addition to the monthly savings, though some borrowers could qualify for even more!
What are the Requirements?
As with most government-sponsored programs, the RefiNow program comes with some stipulations.
The program applies to self-employed, hourly, or salaried employees who fulfill the following requirements:
- Loan-to-Value less than 97%
- Debt-to-Income less than 65%
- Credit Score minimum of 620
- Income must fall below 80% of the area median income (you can find your AMI through the Census Bureau)
In addition, RefiNow only applies to fixed-rate mortgages. Single-family properties, condos, and manufactured homes are eligible, but you must not have missed a payment in over 30 days, and you must have made payments on the property for at least one year.
Keep in mind that this program does not apply to cash-out refinances. Proceeds from the refinance must be used in one of three ways:
- Pay off the first mortgage
- Pay related closing costs up to $5,000
- Disburse cash not to exceed $250
To determine if your mortgage is owned or secured by Fannie Mae, you can use this tool: www.fanniemae.com/loanlookup/
If you cannot determine if your mortgage qualifies for the RefiNow program, reach out to one of our expert On Q Financial Mortgage Consultants. We’re happy to help! We’ll work with you to determine if you’re ready to refinance and which program is right for you!
Contact us here https://onqfinancial.com/contact-onq/
About the Author
Before opening On Q Financial in 2005, John Bergman originated and funded 450 units a year as a loan officer. He founded the company with just $1M of personal life savings—committed to his vision for building the best independent mortgage organization in the industry.View John's Profile