RefiNow

Expanding the refinance market to those who need it most

Refinancing a mortgage can make owning a home more affordable. It can decrease monthly payments and help make homeownership more sustainable. But it’s often unavailable to borrowers who could see the most benefit.

RefiNow™ is a new refinance mortgage option with flexibilities aimed at making it easier and less expensive for qualifying homeowners to reduce their monthly housing costs by taking advantage of today’s historically low interest rates.

Highlights

Debt-to-income ratio (DTI) up to 65%
Interest rate reduction of at least 50 bps required
A reduction in the monthly payment that includes principal, interest, and the mortgage insurance payment (if applicable)
$500 LLPA credit if appraisal obtained¹

Eliminate Borrower Barriers

With eligibility expanded to borrowers with up to 65% DTI, RefiNow represents an opportunity to offer mortgage refinancing to those who may not have previously qualified.

Support Stable Homeownership

Reduced interest rates make homeownership more sustainable for borrowers who are current on their mortgage.

Address Upfront Costs

Upfront costs can present obstacles for homeowners but features like appraisal waivers or credits put refinancing within reach.

Fannie Mae expects lenders to help borrowers understand the benefit of RefiNow and the total cost of the refinance over the life of the loan.

To qualify for RefiNow, a borrower must have:

A Fannie Mae-owned mortgage secured by a one-unit, principal residence;
Current income at or below 100% of the Area Median Income (AMI);
No missed payments on their current mortgage loan in the past six months, and no more than one missed payment in the past 12 months²; and
A mortgage with a loan-to-value ratio up to 97%, a DTI of 65% or less, and a minimum 620 credit score (applies to the new refinance loan).

RefiNow vs. HomeReady

Some borrowers who qualify for RefiNow may also qualify for HomeReady® and, in certain circumstances, may see more savings with our flagship affordable product. This chart will help you identify which option is right for your borrower

Category	RefiNow Limited cash-out refinance	HomeReady Limited cash-out refinance
Existing Loan Eligibility	Must be owned by Fannie Mae Loan must be seasoned at least 12 months	Must be owned by Fannie Mae only if LTV is 95-97% Does not limit loan seasoning
New Loan Eligibility	New loan amount may include cash out limited to less than or equal to $250 Fixed-rate mortgage (FRM) only No high balance loans	Max 2% or $2,000 cash back May pay off subordinate financing Permits adjustable-rate mortgages (ARMs) and FRMs under specific eligibility criteria Permits high balance loans
Collateral & Property Valuation	Provide $500 lender credit if appraisal obtained	Does not provide an appraisal credit
DTI	Max DTI 65%	Max DTI 50% for loans underwritten in DU or DTI 45% for manually underwritten loans
Pricing	Standard LLPAs (no caps applied)	Waives LLPAs for LTV greater than 80% and credit scores greater than or equal to 680 and caps LLPAs for other loans at 1.5%
Mortgage Insurance (MI)	Standard MI requirements and coverage levels	Reduced MI coverage for loans with LTV 90.01 - 97%

Scenarios: RefiNow vs. HomeReady

The below scenarios represent examples of how a lender may determine which product is better suited for a borrower.

The scenarios are hypothetical and assume the borrowers meet all other eligibility requirements.

Scenario	RefiNow	HomeReady
45% DTI, 640 credit score, 82% LTV	DU recommendation: Approve/Eligible Loan meets eligibility requirements for DTI, credit score, and LTV	DU recommendation: Refer with Caution (RWC) Loan does not meet DU credit risk assessment
58% DTI, 700 credit score, 82% LTV	DU recommendation: Approve/Eligible Loan meets eligibility requirements for DTI, credit score, and LTV	DU recommendation: Approve/Ineligible Loan meets DU risk assessment; exceeds maximum DTI
37% DTI, 700 credit score, 82% LTV	DU recommendation: Approve/Eligible Loan meets eligibility requirements for DTI, credit score, and LTV	DU recommendation: Approve/Eligible Loan meets DU risk assessment and eligibility requirements

NOTE: All scenarios are hypothetical and provided for illustrative purposes only. The DU recommendation
provided for HomeReady loans may vary depending on other risk factors in the mortgage application considered
as part of the DU credit risk assessment. The DU recommendation provided for RefiNow loans is based on the
program eligibility rules check and assumes the borrower meets all other program requirements.

¹Credit will be provided in the form of a $500 LLPA credit to the lender at the time the loan is purchased

if an appraisal was obtained for the transaction. The lender must pass the credit on to the borrower

²Missed payments due to a COVID-19 forbearance that have been resolved in accordance with Lender Letter LL-2021-03 are not considered delinquencies for

purposes of meeting these payment history requirements.