According to Freddie Mac, borrowers will benefit from a reduced interest rate and lower mortgage payment, and those who have not refinanced can save an estimated $100 to $250 a month. The FHFA also said that it will require the GSEs to modify other requirements to address operational frictions for lenders.
“We introduced RefiNow earlier this year as an option for lower-income homeowners who often miss out on refinancing options to reduce their monthly mortgage payments and increase their potential monthly savings. The enhancements… help expand the reach of RefiNow to additional creditworthy homeowners, further enabling equitable and sustainable access to homeownership,” head of Fannie Mae Single-Family Malloy Evans said.
“Freddie Mac is taking action to ensure more deserving homeowners can benefit from today’s low mortgage rate environment through refinancing,” said Donna Corley, executive vice president and head of Freddie Mac Single-Family. “Working with our lender clients and the Federal Housing Finance Agency, we are now able to help even more lower-income households reduce their interest rate and their monthly mortgage payment through our Refi Possible solution. Our priority is to create more equitable opportunities that responsibly support sustainable homeownership.”
In addition to expanded eligibility, Fannie and Freddie will incorporate desktop appraisals into their selling guides for new purchase loans starting in early 2022. According to the FHFA, this decision was the result of a thorough review of data collected from the use of the loan flexibilities, as well as input received from the Request for Input (RFI) and public listening session on appraisal-related policies, practices, and processes.