Enhanced Relief Refinance® Mortgage
The Freddie Mac Enhanced Relief Refinance® Mortgage provides opportunities to borrowers with existing Freddie Mac mortgages who are making timely payments, but are unable to take advantage of the standard Freddie Mac "no cash-out" refinance offering because the new mortgage exceeds maximum loan-to-value (LTV) limits.
Enhanced Relief Refinance helps you meet the needs of borrowers who are making timely mortgage payments but have been unable to refinance due to declining property values, take advantage of expanded refinancing opportunities and provide additional flexibilities for mortgages with LTV ratios that exceed maximum limits for a “no cash-out” refinance offering.
Important Update
As announced in Single-Family Seller/Servicer Guide Bulletin 2021-19, Freddie Mac is pausing its purchase of Enhanced Relief Refinance Mortgages until further notice.
Reminder
Enhanced Relief Refinance® Mortgages with Application Received Dates on or after July 1, 2021 and all Enhanced Relief Refinance Mortgages with Settlement Dates after August 31, 2021 are not eligible for delivery until further notice. Refer to Bulletins 2021-19 and 2021-27 for additional information.
Who is the Enhanced Relief Refinance Mortgage for?
- Borrowers who want to refinance into a more sustainable mortgage that promotes long-term homeownership success.
- Borrowers looking to reduce the monthly principal and interest payment of their First Lien Mortgage.
- Borrowers who are interested in potentially reducing principal and interest payment.
The information on this page is not part of, and is not a replacement or substitute for, the requirements found in the Freddie Mac Single-Family Seller/Servicer Guide and your other Purchase Documents.
Product Features
- Maximum LTV Ratios
- For adjustable-rate mortgages, the maximum LTV ratio is 105%.
- For fixed-rate mortgages, there is no maximum LTV ratio.
- Eligible Mortgage Products
- Effective for mortgages with application received dates on or after November 1, 2018.
- A conventional 15-, 20-, or 30-year fixed-rate mortgage.
- A conventional 5-year, 5/1, 7/1, 10/1, 5/6-Month, 7/6-Month, or 10/6-Month ARM, provided the Mortgage being refinanced is an ARM, and except that a Mortgage secured by a Manufactured Home must not be a 5-year, 5/1, or 5/6-Month ARM.
- No program expiration date.
- All occupancy types are eligible.
- LTV ratios that exceed the maximum LTV ratio limits for Freddie Mac standard “no cash-out” refinance mortgage (Note: due to the implementation of the Enhanced Relief Refinance offering, special requirements for “no cash-out” refinances owned or securitized by Freddie Mac, including the special LTV, TLTV and HTLTV limits will be retired at a later date).
- Lenders are not required to comply with standard waiting periods and re-establishment times for derogatory events (e.g., bankruptcy, foreclosure).
- Minimum LTV Ratios
Primary Residence
- 1-unit (including manufactured homes) - 97.01%
- 2-unit - 85.01%
- 3- and 4-unit - 80.01%
Second Home
- 1-unit (including manufactured homes) - 90.01%
Investment Property
- 1-unit - 85.01%
- 2- to 4-unit - 75.01%
- Mortgage Payment History
- The mortgage has not been 30-days delinquent in the most recent six months; and
- Has not been 30-days delinquent more than once in the most recent 12 months.
- Seasoning
The existing mortgage must be seasoned at least 15 months (that is, at least 15 months must have passed between the note date of the mortgage being refinanced and the note date of the Enhanced Relief Refinance Mortgage).
- Use of Mortgage Proceeds
- New mortgage amount limited to the payoff of the unpaid principal balance accrued interest, the financing of the closing costs not to exceed $5,000 and cash disbursed to the borrower not to exceed $250.
- Excess proceeds must be applied as a principal curtailment on the new mortgage.
Growing Your Business
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Resources for Borrowers
Reaching and educating borrowers – and helping them find the right mortgage – is essential for your business. Freddie Mac provides an array of materials you can share with your clients and business prospects.