No Cash-out Refinance Mortgages
A no cash-out refinance mortgage can help customers consolidate higher-rate seconds into one, lower-rate loan with a no cash-out refinance mortgage.
This type of mortgage product can also lower a borrower's monthly payment, and all related closing costs, financing costs and prepaids/escrows may be rolled into the new loan amount. Plus, when you use Loan Product Advisor® automated underwriting technology to evaluate no cash-out refinance mortgages, you'll approve more borrowers and streamline your process with less documentation.
Eliminate mortgage insurance when the new appraisal or inspection report supports a higher value to calculate the new LTV ratio.
No cash-out refinance mortgages help you retain your current customer base and increase your origination volume with options to meet the needs of more borrowers, improve efficiencies using Loan Product Advisor and easily sell more mortgages to Freddie Mac.
Who are No Cash-out Refinance Mortgages for?
- Borrowers who want to lower their interest rate and payment.
- Homeowners who want to consolidate higher-rate seconds into one, lower-rate loan.
- People who'd like to eliminate upfront costs by rolling in all related closing costs, financing costs and prepaid items into the new loan amount.
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
- Eligible Mortgage Products
- Fixed-rate mortgages
- 5- and 7-year balloon/reset mortgages
- Most ARMs
- Super Conforming Mortgages. See Single-Family Seller/Servicer Guide (Guide) Chapter 4603 for requirements.
- Execution Options
- Servicing-retained Cash
- Fixed-rate Guarantor
- WAC ARM Guarantor
- MultiLender Swap
- See our Loan Selling Advisor® availability matrix for a list of specific mortgages eligible for sale best efforts or mandatory, servicing released.
- Credit Fees
Credit Fees in Price may apply based on the individual characteristics of the mortgage. See Guide Exhibit 19 for details on applicable fees.
- Delivery Requirements
Refer to Guide Section 6302.16(b) for special delivery instructions for no cash-out refinance mortgages.
- Property Type/Eligible Properties
- 1- to 4-unit primary residences, including condos, PUDs and manufactured homes.
- Second homes
- 1- to 4-unit investment properties
- Maximum LTV Ratios
Maximum LTV ratios must comply with Guide Section 4203.4 for Loan Product Advisor and manually underwritten mortgages
- Eligibility/Underwriting
- Loan Product Advisor Accept
- Non-Loan Product Advisor
- New mortgage may include amounts used to pay off junior liens secured by the mortgaged premises that were used in their entirety to acquire the subject property, or must be subordinated or paid off from borrower funds.
- All mortgages must meet the risk class and/or minimum Indicator Score requirements in Guide Exhibit 25.
- Maximum debt-to-income ratio of 45 percent for manually underwritten mortgages.
- Mortgage payment history and minimum income documentation in accordance with Loan Product Advisor credit risk/documentation class or Guide requirements.
- Refer to Guide Section 4301.2 for requirements on continuity of borrower ownership or obligation.
- The Seller must make the determination regarding borrower creditworthiness in accordance with the requirements of the Guide Section 5202.1(b).
- Down Payment or Closing Costs
All closing costs, financing costs and prepaids/escrows can be rolled into the new loan amount.
Growing Your Business
From valuable training and networking events to advanced tools and applications that help you work smarter, Freddie Mac has the resources you need to expand into new markets and grow your revenues.
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.