Freddie Mac also has a program for refinancing that lowers homeowners' monthly payments.
Like Fannie Mae's DU Refi Plus™, Relief Refinance℠ from Freddie Mac is part of the federal government's Making Home Affordable program.
The streamlined refinancing is specifically geared to borrowers who are current on their monthly home loan payments, but who cannot refinance because home have fallen and credit terms have tightening.
Relief Refinance℠ highlights are:
- No maximum LTV/TLTV/HTLTV ratios
- All post-settlement fees waived (except for the Market Condition delivery fee)
- No private mortgage insurance is required
- Appraisal requirements reduced
- Looser borrower qualification standards
Relief Refinance℠ is designed to help borrowers take advantage of today's low interest rates and remain in their homes for the long term
Freddie Mac will waive post-settlement fees (other than the Market Condition delivery fee) to make refinancing affordable to more homeowners.
Under Relief Refinance℠, Freddie Mac must be the current mortgage owner.
The refinancing program must improve the homeowner's financial position by reducing the mortgage interest rate, reducing the amortization of the first mortgage, or replacing an adjustable-rate mortgage or a balloon mortgage with a fully amortizing, fixed-rate mortgage.
Relief Refinance℠ does not allow new subordinate financing but does not limit to the TLTV/HTLTV. Existing second mortgage must be paid off with money outside of closing or be re-subordinated.
Relief Refinance℠ does not require borrowers to be re-qualified if the principal and interest payment rise by more than 20 percent. If the new principal and interest does rise by more than 20 percent, the Freddie Mac refinancing program calls for:
- Streamlined Accept documentation for income and employment
- Minimum Indicator Score of 620
- Maximum debt-to-income (DTI) of 45%
Freddie Mac can allow using Home Value Explorer, a statistically based property valuation tool, for one-unit properties.
Relief Refinance Mortgage Insurance
Relief Refinance℠ will not require mortgage insurance if the current mortgage does not have mortgage insurance and the LTV increases because of falling property value.
But if the current home loan has mortgage insurance, the insurance must be transferred to the new mortgage, with the existing mortgage insurance certificate and percentage of coverage.
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