A long stretch with near-record low interest rates motivated a lot of homeowners to refinance over the past year. In a couple of months, there may be an easier way for low-income borrowers to get in on the savings as well.
The Federal Housing Finance Agency (FHFA) announced a program this week that would enable homeowners with Fannie Mae- or Freddie Mac-backed mortgages to refinance. Lenders would be required to ensure eligible borrowers get payments reduced by at least $50 per month and a minimum 50-basis-point interest rate reduction.
The refinance program would also reimburse lenders who credit borrowers up to $500 for an appraisal if they are unable to get an appraisal waiver. For borrowers whose remaining balances are no more than $300,000, the program would also waive the typical upfront 50 basis point adverse market refinance fee.
Eligible borrowers cannot earn more than 80% of the area median income, can't have missed any payments in the past six months (or more than one in the past year), and must also meet debt-to-income ratio and FICO score requirements. By FHFA's estimates, borrowers who use the refinance program could save $100-$250 per month, on average.
This article originally published at https://dc.urbanturf.com/articles/blog/a-refinance-program-for-low-income-homeowners/18203.
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