FHFA Announces New Refinance Option for Low-Income Families with Enterprise-Backed Mortgages

Originally published on April 28, 2021, by the Federal Housing Finance Agency.

​​​​​​Washington, D.C. – The Federal Housing Finance Agency (FHFA) announced today Fannie Mae and Freddie Mac (the Enterprises) will implement a new refinance option for low-income borrowers with Enterprise-backed single-family mortgages. Eligible borrowers will benefit from a reduced interest rate and lower monthly payment. FHFA estimates that borrowers who take advantage of the new refinance option could save an average of between $100 and $250 a month.  

The new refinance option includes:

  • A requirement that the lender provides a savings of at least $50 in the borrower’s monthly mortgage payment, and at least a 50-basis point reduction in the borrower’s interest rate;
  • A maximum $500 credit from the lender for an appraisal if the borrower is not eligible for an appraisal waiver (the Enterprises will provide the lender a credit of $500 upon the loan​s sale to an Enterprise); and 
  • A waiver of the 50 basis point up-front adverse market refinance fee for borrowers with loan balances at or below $300,000.
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