RefiNow™ Expands Eligibility to Help More Homeowners Reduce Their Monthly Mortgage Payment
(Applicable for Retail and Wholesale channels)
CLIENTS! HOMEOWNERS! People who didn't refinance because of something or other...
May 5 2021, introducing Lender Letter 2021-10 the new government RefiNow™ option to enable borrowers to refinance to a lower rate and reduce their monthly mortgage payment. With this program option qualifying homeowners whose earnings are no more that 80% of the Area Median Income (AMI) will be eligible to refinance their Fannie Mae-owned loans to a lower interest rate and a corresponding lower monthly mortgage payment.
The RefiNow™ program option starts June 5, 2021.
Sun West Mortgage Company, Inc. is offering RefiNow™ loan program with an application date on or after June 5, 2021.
RefiNow™ helps the borrower by:
- Requiring a reduction in the homeowner's interest rate by a minimum of 0.5 percent and a savings of at least $50 in the homeowner's monthly principal and interest 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 this credit to the homeowner after closing. Some transactions do not require an appraisal and this discount will not apply if no appraisal is needed.
- 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. This discount is sizable money on a mortgage.
To qualify for RefiNow™, the borrower must have:
- a Fannie Mae-backed mortgage secured by a 1-unit, principal residence;
- a current qualifying income at or below 80% of the Area Median Income (AMI);
- not missed a mortgage payment in the past six months, and have 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 FICO score of 620.
FHA loan limits are derived from the loan limits adopted by the Federal National Mortgage Corporation (Fannie Mae-FNMA) and the Federal Home Loan Mortgage Corporation (Freddie Mac-FHLMC). The 2021 maximum conforming loan limit for a single-family home will be $548,250. That’s an increase of $37,850 from the 2020 baseline limit of $510,400. This marks the fifth year in a row that federal housing officials have raised the baseline.
LOW-COST AREA OR FLOOR
The FHA national low-cost area mortgage limits, which are set at 65 percent of naäonal
ming limit of $548,250 for a one-unit Property, are, by property unit number, as follows:
- One-unit: $356,362 (FHA limit can be this low AKA the Floor)
- Two-unit: $456,275
- Three-unit: SSS1,soo
- Four-unit: $685,400
HIGH-COST AREA OR CEILING
The FHA national high-cost area mortgage limits, which are set at 150 percent ofthe national ming limit of $548,250 for a one-unit Property, are, by property unit number, as follows:
- One-unit: $822,375 (FHA limit can be this high AKA the Ceiling)
- Two-unit: $1,053,000
- Three-unit: $1,272,750
- Four-unit: $1,581,750
SPECIAL EXCEPTIONS FOR ALASKA, HAWAII, GUAM, AND THE VIRGIN ISLANDS
Mortgage limits for the special exception areas of Alaska (AK), Hawaii (HI), Guam (GU) and the Virgin Islands (VI) are adjusted by FHA to account for higher costs of construction. These four special exception areas have a higher ceiling as follows:
- one-unit: $1,233,550
- Two-unit: $1,579,500
- Three-unit: $90,9125
- Four-unit: $2,372,625
