Fannie Mae to Loosen Restrictions on Refinancing with DU Refi Plus™

As part of the federal government's Making Home Affordable program, Fannie Mae has unveiled "Desktop Underwriter (DU) Refi Plus™", a new program that is designed to stimulate the mortgage industry by making the refinancing process easier than ever before. The program could potentially streamline refinancing for millions of U.S. home owners.

As part of the program, Fannie Mae has eased restrictions for borrowers who are seeking lower monthly mortgage payments. The new criteria include lower minimum credit score, lower income documentation, and in many scenarios, no new appraisal.

According to Brian Faith, Managing Director of Communications for DU Refi Plus™, "Under DU Refi Plus™, the company will be able to identify an existing Fannie Mae loan and review the performance history. This will allow lenders, regardless of the servicer, to enjoy expanded refinancing business opportunities and streamlined processing..."

Fannie Mae allows homeowners to refinance as much as 105 percent of the value of their house and will sometimes accept borrowers with credit scores below the current requirement of 580. Reduced documentation standards allow borrowers to submit just one pay stub for proof of income.

The goal of DU Refi Plus™ is to allow borrowers who may be struggling to make payments to remain in their homes by reducing their monthly payments through refinancing. The change in lending guidelines applies only to mortgage loans that Fannie Mae presently owns or guarantees. The program debuted on April 4, 2009 and is included in Desktop Underwriter 7.1.