Fannie Mae's New Refinance Option Available Beginning June 5

Rhea-AI Summary

On May 5, 2021, Fannie Mae announced the launch of its new RefiNow option, effective June 5, to assist qualifying homeowners with Fannie Mae-owned mortgages. Targeted at homeowners earning at or below 80% of the area median income, RefiNow aims to simplify the refinancing process by lowering interest rates and reducing monthly payments. Key features include a minimum 50 basis point interest rate reduction, a $500 credit to lenders, and the waiving of specific fees. Homeowners must meet certain criteria to qualify, including maintaining a good payment history and specific financial metrics.

Positive

• New RefiNow option targets low-income homeowners, promoting sustainable homeownership.
• Requires a minimum 50 basis point reduction in interest rates and savings of at least $50 in monthly payments.
• Offers a $500 credit to lenders to pass on to homeowners, encouraging participation.
• Waives the adverse market refinance fee for loans below $300,000, reducing barriers to refinancing.

Negative

• None.

WASHINGTON, May 5, 2021 /PRNewswire/ -- Fannie Mae (OTCQB: FNMA) today issued additional details about its new RefiNow™ option, which is available for qualifying homeowners with a Fannie Mae-owned mortgage beginning June 5, 2021. Initially announced April 28 by the Federal Housing Finance Agency, RefiNow makes it easier for eligible homeowners earning at or below 80% area median income (AMI) to refinance at a lower interest rate and reduce their monthly mortgage payment.

"Lower-income borrowers typically refinance at a slower pace than higher-income borrowers, potentially missing an opportunity to save on housing costs. Fannie Mae's new RefiNow option will help more homeowners refinance by removing some of those barriers, improving affordability, and promoting sustainable homeownership," said Malloy Evans, Senior Vice President and Single-Family Chief Credit Risk Officer, Fannie Mae.

Homeowners can determine if Fannie Mae owns their mortgage by visiting Fannie Mae's Loan Lookup Tool at KnowYourOptions.com.

RefiNow helps homeowners by:

• Requiring a reduction in the homeowner's interest rate by a minimum of 50 basis points and a savings of at least $50 in the homeowner's monthly mortgage payment.
• Providing a $500 credit from Fannie Mae to the lender at the time the loan is purchased if an appraisal was obtained for the transaction. The lender must pass the credit to the homeowner.
• Waiving the 50 basis point up-front adverse market refinance fee that Fannie Mae otherwise charges to lenders on balances at or below $300,000.

To qualify for RefiNow, homeowners must have:

• A Fannie Mae-backed mortgage secured by a 1-unit, principal residence;
• A current income at or below 80% of the AMI (not the income as of origination of the original loan);
• Not missed a mortgage payment in the past six months, and no more than one missed mortgage payment in the past 12 months; and
• A mortgage with a loan-to-value ratio up to 97%, a debt-to-income ratio of 65% or less, and a minimum 620 FICO score.

Statements from Fannie Mae Board Chairwoman Sheila C. Bair and Fannie Mae CEO Hugh R. Frater on FHFA's announcement of the new Enterprise refinance option are available here.

About Fannie Mae
Fannie Mae helps make the 30-year fixed-rate mortgage and affordable rental housing possible for millions of people in America. We partner with lenders to create housing opportunities for families across the country. We are driving positive changes in housing finance to make the home buying process easier, while reducing costs and risk. To learn more, visit:
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Fannie Mae Newsroom
https://www.fanniemae.com/news

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Fannie Mae Resource Center
1-800-2FANNIE (800-232-6643)

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SOURCE Fannie Mae

FAQ

What is Fannie Mae's new RefiNow option announced on May 5, 2021?

RefiNow is a refinancing option aimed at homeowners with Fannie Mae-owned mortgages, effective June 5, 2021, designed to assist those earning at or below 80% of the area median income.

When will the RefiNow program be available for homeowners?

The RefiNow program will be available starting June 5, 2021.

What are the eligibility requirements for Fannie Mae's RefiNow option?

Homeowners must have a Fannie Mae-backed mortgage, an income at or below 80% of the AMI, no missed payments in the last six months, and meet specific loan-to-value and credit score criteria.

How does RefiNow benefit eligible homeowners?

RefiNow helps homeowners by lowering interest rates, providing a $500 lender credit, and waiving certain fees, ultimately reducing monthly mortgage payments.

What impact does RefiNow have on low-income borrowers?

RefiNow aims to improve access to refinancing for low-income borrowers, helping them save on housing costs.