Getting a home improvement project to pay off is notoriously tricky. There's no guarantee you'll recoup the money you pour into a bathroom remodel or an outdoor kitchen. Plus, the COVID-19 pandemic
Fannie Mae Relaxes Standards Slightly To Allow For 3 Down Refinances
Dated: October 25 2016
Fannie Mae did more Monday than just announcing that it planned to grant lenders “freedom” from buyback risk. The government-sponsored enterprise also revealed to lenders that it is expanding its HomeReady program, which features Fannie Mae’s 3% down mortgage.
Fannie Mae made the announcement in a bulletin sent to lenders Monday. In the bulletin, Fannie Mae said that it is expanding its HomeReady program to allow for up to 97% loan-to-value ratio refinances for loans that are already owned by Fannie Mae.
Previously, Fannie Mae’s maximum allowable LTV ratio for certain refinances was 95%.
Specifically, Fannie said that it will soon allow for LTVs of 97% on one-unit limited cash-out refinance transactions that are underwritten by Fannie Mae’s Desktop Underwriter when the mortgage being refinanced is owned by Fannie Mae.
Additionally, Fannie Mae said that the requirement that the existing mortgage being refinanced be owned by Fannie Mae does not apply when the LTV is 95% or less, or when the CLTV only exceeds 95% due to a Community Seconds loan.
Fannie Mae said that the changes are part of its continuing effort to add features to the HomeReady program that enable lenders to expand access to credit in a “safe and responsible” manner.
The changes don’t come as a surprise, as Fannie Mae said in Julythat it planned to announce these exact changes later this year.
Fannie Mae also said Monday that it is expanding current HomeReady eligibility for temporary buydowns and adjustable-rate mortgages to include three- to four-unit properties to align with the GSEs current standard eligibility requirements for that property type.
Fannie Mae also announced that it is offering lenders some additional incentives to try to get high-LTV borrowers to participate in housing counseling prior to obtaining a mortgage.
According to Fannie Mae, these changes take effect on Dec. 10, 2016.
By Beth Lane at Housingwire.com
For Mark Ross, founder of Ross NW Real Estate and professional real estate broker, real estate has always been the career of choice. During his 25+ years in the industry, Mark has gained experience in....
Latest Blog Posts
Fannie Mae‘s latest forecast projects economic growth to hit 5.3% in 2021, an increase of 0.8 percentage points from what the government-sponsored enterprise projected last month.The forecasted