Qualified low-income borrowers now have a new opportunity to refinance their mortgages and take advantage of historically low rates. RefiNow™ is a new refinancing option offered by Fannie Mae that could help qualified borrowers to lower their interest rates, reduce their monthly payments, and save money!
Is Fannie Mae RefiNow™ right for you? Keep on reading to learn more!
Helping Low Income Homeowners
In an effort to promote equity and wealth among low-income households, Fannie Mae, in coordination with Freddie Mac and overseen by FHFA, is offering RefiNow™ as a way to encourage lower-income borrowers to refinance and save money by taking advantage of historically low rates. Fannie Mae understands that multiple barriers exist that may prevent lower-income homeowners from refinancing at the same frequency as higher-income homeowners. RefiNow™ is an effort to ensure that low-income borrowers don’t miss out on this great opportunity to refinance while rates are still low, potentially saving thousands over the life of their loan.
Are You Eligible?
In order to qualify, the borrowers must earn no more than 80% of the area median income and have a credit score of at least 620. The borrowers must have been making their mortgage payments on time, although some allowances can be made for payments missed due to COVID-19 forbearance, as long as those payments have since been resolved. In addition, their loan must be a conventional loan owned or securitized by Fannie Mae, and be seasoned for between 12 and 120 months. Furthermore, the new loan must offer a benefit to the borrower by either reducing their interest rate by 50 points, or reducing their monthly payment by at least $50. This means that only people who can see a tangible benefit from RefiNow™ will be able to qualify! If you qualify, that means you could be saving money by refinancing to a lower interest rate!
Only single-unit principal residences are eligible to be refinanced with a RefiNow™ loan. Further requirements can be viewed here.
As RefiNow™ is offered by Fannie Mae, Fannie Mae must be the one to own your mortgage in order for you to qualify. You can check to see if Fannie Mae owns your mortgage by clicking here. If your mortgage is owned by Freddie Mac, don’t worry! You may be eligible for Freddie Mac’s low income refinancing option, Refi Possible℠.
In addition to lowering the borrower’s interest rate and helping them save money, by refinancing through RefiNow™, borrowers can earn a $500 credit towards appraisal costs if an appraisal is deemed necessary.
According to the FHFA, over 2 million low-income households didn’t refinance when mortgage rates were at their lowest, thereby losing out on thousands of potential savings. Don’t wait – refinance while rates are still low with the help of RefiNow™!
RefiNow™ was announced in April of 2021 and became available for borrowers on June 5, 2021. Why wait? Contact your lender for more information on Fannie Mae RefiNow™, and find other useful tips right here on RateZip!