Do you qualify for refi plan?

  • No minimum credit score is required. However, borrowers whose credit is impaired may be offered a higher interest rate.
  • The borrower must complete a standard loan application.
  • An appraisal may be required.
  • More information can be found on Fannie Mae's Web site.

Freddie Mac Relief Refinance Mortgage rules

Objective: Freddie Mac's Home Affordable Refinance program, known as the Relief Refinance Mortgage, is designed to assist borrowers who are current on their mortgage payments, but would benefit from refinancing into a mortgage that would better position them for long-term homeownership. The program may be used to reduce the borrower's interest rate, shorten the loan repayment period or replace an adjustable-rate mortgage, interest-only mortgage or balloon/reset mortgage with a fixed-rate loan.
  • To qualify, the borrower must have an existing mortgage that is owned or guaranteed by Freddie Mac. To find out whether Freddie Mac owns or guarantees your loan, call (800) 373-3343, call your loan servicer or search for your loan on Freddie Mac's Web site.
  • Borrowers can apply for this program through their current loan servicer or any Freddie Mac-affiliated lender. Borrowers who apply through their current servicer won't have to have their loan re-underwritten in most cases, but borrowers who switch to a different lender will have to have their loan re-underwritten.
  • The new mortgage can be a 15-, 20- or 30-year, fixed-rate loan or an adjustable-rate mortgage  with an initial term of five, seven or 10 years. The loan must be fully amortizing (i.e., not an interest-only or payment-option loan). An existing fixed-rate mortgage may not be refinanced with an ARM.
  • The property may be a vacation/second home if the existing mortgage was originated as a second-home loan or the borrower now occupies the home as a principal residence.
  • The property may be an investment property if the existing mortgage was originated as an investment property or the borrower now occupies the home as a principal residence.
  • The existing loan, new loan or both may be a so-called "super-conforming" loan limit within the applicable loan limit for the area.
  • If the original loan is covered by mortgage insurance, the insurer must agree to transfer the insurance to the new loan.
  • The new loan cannot be used to make a payment on or pay off a second loan.
  • Lenders are encouraged to use Freddie Mac's automated valuation model, or AVM, to estimate the property's current market value. Borrowers should ask whether a new appraisal will be required.
  • Borrowers may be able to finance an additional $5,000 or up to 4 percent of the new loan amount, whichever is less, to pay closing costs, financing costs or prepaid sums due at closing.
  • Borrowers whose monthly payment increases 20 percent or more must provide income and employment documentation and have an acceptable credit score and debt-to-income ratio to demonstrate they can afford the new higher payment. (This scenario typically applies only to borrowers who want to refinance an ARM, interest-only or payment-option type of mortgage, which has a very low interest rate.)
  • More information may be found on Freddie Mac's Web site.




Show Bankrate's community sharing policy
          Connect with us

Timely market news and advice for consumers ready to buy, sell or invest in real estate. Delivered weekly.


Greg McBride

Greg McBride: Lay down ARMs?

Don't rule out adjustable-rate mortgages as interest rates rise.  ... Read more

Partner Center

Connect with us