The Federal Housing Finance Agency announced plans to expand refinance programs introduced last spring for low- to moderate-income borrowers. At an industry event today, FHFA Acting Director Sandra Thompson said Fannie Mae and Freddie Mac will expand eligibility requirements for their RefiNow and Refi Possible refinance programs for low-income borrowers. They also will incorporate desktop appraisals into selling guides for new purchase loans.
When the programs were rolled out earlier this year, area median income requirements were limited to borrowers with current income at or below 80%. Today’s announcement expands the income threshold to include some moderate-income borrowers with incomes at or below 100% of AMI. Fannie and Freddie also will modify other requirements to address certain operational frictions for lenders. Thomson called it an “urgent priority,” due to the “significant numbers of lower income and minority enterprise borrowers stuck in rates 30 to 60% higher than the current average.”
Desktop appraisals will be added to the selling guides for many new purchase loans starting in early 2022, she reported. “With desktop appraisals included … what was one of the temporary flexibilities with an uncertain future has been adjusted to mitigate risk for use over the long-term and will now become an established option for originating enterprise loans,” Thompson said, adding that it should allow lenders, borrowers and appraisers to “take advantage of the efficiency gains that desktop appraisals can provide.”