The Obama administration continues to create mortgage help and foreclosure prevention programs. The Government’s latest efforts to provide US homeowners with mortgage relief has produced another loan refinance assistance program for borrowers who are stuck in high loan to value mortgages.
This is a Fannie and Freddie High Loan to Value Refinance Program.
You may be thinking to yourself that this government mortgage help program sounds an awful lot like the Obama refinance program, aka HARP – Home Affordable Refinance Program. You would be correct. These new Fannie and Freddie home loan help options have been created to replace the Obama refinance program (when it expires after September 2017) and continue the efforts of the US Government to help struggling homeowners who have been overwhelmed with mortgage hardship.
High Loan to Value Refinance Assistance Program
This program is designed to help homeowners with mortgages that have balances to high compared to home values to refinance through other refinance options.
High LTV Refinance Program Eligibility
- The existing mortgage must be held by Fannie or Freddie
- Current Loan to Value must exceed other program guidelines such as the Fannie Mae Limited Cash Out Refinance
- The Mortgage must have been owned by Fannie Mae or Freddie Mac for at least a year and twelve monthly mortgage payments must have been received.
- The current mortgage must be in good standing.
- No payments over 30 days late in last 6 months
- No more than one 30 day plus late payment in last 12 months.
- If homeowners are late they may want to consider the Obama loan modification program.
- Mortgage must not have come through the Fannie Mae Refinance Plus Program
- Mortgage Borrower Must Benefit from Refinance (at least one of the following must be true – If you are struggling with the question “should I refinance?” I have a great resource you should check out on this finance blog.)
- Reduce Monthly Principle
- Reduce Monthly Interest
- Shorter Repayment Term
- More Stable Mortgage Product
Homeowner Benefits from Refinance Assistance
- Lower mortgage payment
- Better Mortgage Product – Homeowners may be able to switch from a high interest ARM to a better fixed rate product
- Mortgage Insurance Transfers – Homeowners can transfer private mortgage insurance they have on other loan if need be.
- Application and verification process is streamlined
- Auto programed underwriting and manual underwriting available depending on borrower situation making the application and approval process flexible.
This Government refinance assistance program will become available October 2017 right after the current Obama refinance program expires in September 2017.