Refi Possible FAQ
This information is not a replacement or substitute for the requirements in the Freddie Mac Single-Family Seller/Servicer Guide and other Purchase Documents.
Why did Freddie Mac and Fannie Mae (the GSEs) launch this offering?
Freddie Mac Refi Possibl® and Fannie Mae RefiNow™ are designed to address some of the barriers that prevent lower-income borrowers from refinancing and taking advantage of record low interest rates. Refi Possible and RefiNow help improve mortgage affordability by reducing the amount of the borrower’s monthly mortgage payments and continue to build their generational wealth through housing.
How will a Seller or borrower know if the loan being refinanced is a Freddie Mac-owned loan?
To be eligible for Refi Possible, the mortgage must currently be owned by Freddie Mac. Sellers or borrowers may use any of the following three ways to validate that a mortgage is Freddie Mac-owned:
- Loan Look-Up Tool: Access the Freddie Mac Loan Look-Up Tool to find out if a loan is Freddie Mac-owned. This resource can also be used by borrowers to find out if Freddie Mac owns their current loan.
- Loan Look-Up Tool API: Learn more about the application programming interface (API) on the Developer Portal and get access here.
- Loan Product Advisor® (LPA®) Feedback Messages: For all no cash-out refinance mortgages submitted, LPA Feedback Messages indicate whether Freddie Mac owns the mortgage being refinanced.
I am a Servicer of a loan being refinanced and our records indicate the loan is owned by Freddie Mac however, the LPA Feedback Message is returning an error message stating the loan being refinanced must match an active Freddie Mac-owned loan...
Question: I am a Servicer of a loan being refinanced and our records indicate the loan is owned by Freddie Mac however, the LPA Feedback Message is returning an error message stating the loan being refinanced must match an active Freddie Mac-owned loan. What should I do?
Answer: Please follow these steps to troubleshoot:
- Verify the property street address and SSN of all of borrowers on the current loan being refinanced, entered is correct and resubmit.
- If upon resubmission the error message is still returned, please contact the Customer Support Contact Center (800-FREDDIE) for assistance.
If there are multiple borrowers, is the requirement that the borrower income be less than or equal to 100% of the area median income (AMI) on a per borrower basis or based on the total income for all borrowers on the loan?
For purposes of determining eligibility, the Seller must include the income from all borrowers who will sign the note to the extent that the income is considered in evaluating creditworthiness for the loan.
For example: If there are two borrowers on a loan application, the lender will use the combined total qualifying income amount to determine whether the at or below 100% of AMI limit has been met.
How is a Refi Possible mortgage different from a Freddie Mac Home Possible® mortgage refinance?
Check out our Refi Possible and Home Possible Refinance Comparison grid to view a side-by-side comparison of product features. In addition, the complete requirements of each offering may be found in the Freddie Mac Single-Family Seller/Servicer Guide (Guide).
Can existing mortgage insurance (MI) be transferred to the new loan?
MI coverage for Refi Possible is not restricted to the current mortgage insurer on the existing loan. LPA will identify the mortgage insurer that is currently providing coverage including the certificate number and percentage of insurance. The Seller should contact the mortgage insurer to confirm if the existing MI will be transferred to the new loan.
The appropriate level of mortgage insurance must be obtained in accordance with Guide Section 4701.1. Standard coverage and custom coverage with corresponding credit fees set forth in Exhibit 19 are both permissible subject to the Guide requirements.
Can Refi Possible be combined with Home Possible?
No, these are two distinct Freddie Mac offerings with each having benefits to serve lower-income borrowers. These offerings cannot be combined. The Seller should review complete requirements for Refi Possible and Home Possible to determine which of the two offering suits the borrower best.
Existing Relief Refinance mortgages and Enhanced Relief Refinance mortgages are not eligible to be refinanced into a Refi Possible mortgage. If I manually underwrite a Refi Possible mortgage, how will I be able to tell if the existing mortgage is a...
Question: Existing Relief Refinance mortgages and Enhanced Relief Refinance mortgages are not eligible to be refinanced into a Refi Possible mortgage. If I manually underwrite a Refi Possible mortgage, how will I be able to tell if the existing mortgage is a Relief Refinance mortgage or Enhanced Relief Refinance mortgage?
Answer: You will be able to use the Freddie Mac Loan Look-up Tool to obtain this information. You may also use LPA to verify if the existing loan is a Relief Refinance or Enhanced Relief Refinance® mortgage.
How must the Seller provide the $500 credit to the borrower when an appraisal is obtained?
Freddie Mac requires that the full $500 be provided to the borrower but does not specify how that must be operationalized. As always, the Seller must comply with applicable regulatory requirements.
Will LPA automatically identify mortgages eligible for Refi Possible?
If the lender does not submit the loan as Refi Possible, but the loan meets Refi Possible income requirements, LPA will return a message stating, “This loan meets Refi Possible income limits. To assess the loan as a Refi Possible mortgage, resubmit as Refi Possible."
Is Refi Possible limited to the same servicer?
No, this offering is not limited to the same servicer as the current mortgage being refinanced.
For more Refi Possible FAQs related to the Guide, click here.