Fannie Maes new RefiNow™ option, which is available for qualifying homeowners with a Fannie Mae-owned mortgage began June 5, 2021, 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. Are you below the 80% area median income? Check here.
“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.
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.
Use these resources to Check if you qualify:
- Check if you have a Fannie Mae backed mortgage: Loan Lookup Tool at KnowYourOptions.com.
- Are you at or below the 80% area mean income? Check here.
- Have you missed more than 1 payment in the past 12 months?: They only allow 1
- Have you missed any payments in the past 6 months? They do not allow any missed payments within the last 6 months
- Are you below 620 FICO score? This is the minimum FICO
- Is your loan-to-value ratio up to 97%? This is the maximum LTV
- Is your debt-to-income ratio 65% or less? This is the maximum DTI