Refi Possible®
Freddie Mac Refi Possible® offers more options and newly expanded flexibilities to help you assist even more low-and moderate-income borrowers to consider refinancing their current loans to save on their monthly mortgage payments.
Refi Possible offers flexibilities to help borrowers take advantage of the current low interest rate market by refinancing their mortgages and lowering their monthly mortgage payments, which will help them achieve greater housing stability and build generational wealth. This refinancing option, targeted toward low-moderate income borrowers, may be especially beneficial for borrowers who may not believe they qualify for refinancing due to their incomes.
Refi Possible is available in Loan Product Advisor® and for manual underwriting as of August 30, 2021.
Refi Possible Is for
- Low- and moderate-income borrowers who may not have realized the benefit of refinancing their current loan.
- Borrowers looking to save more on their monthly principal and interest payments.
- 1-unit primary residence, manufactured housing and all eligible property types homeowners.
This Bulletin announces updates to Refi Possible®, credit underwriting, property eligibility and appraisals, Condominium and Cooperative Projects, access notification requirements, and more.
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.
Refi Possible Mortgage Features
- Property Type/Eligible Properties
Eligible Property Occupancy
- First Lien, conventional mortgage currently owned by Freddie Mac, in whole or in part, or securitized by Freddie Mac
- 1-unit primary residence
- All eligible property types permitted
The Seller is not required to evaluate if the condominium or cooperative project meets the project eligibility requirements, provided that:
- Seller represents and warrants that the project is not located in a condominium hotel, cooperative hotel, houseboat project, timeshare project or project with segmented ownership; and
- The project has insurance that meets the applicable insurance requirements of Guide Chapter 4703
- Income Limits
Borrower Income
Less than or equal to 100% area median income (AMI)
- Special Requirements
Loan Terms
- Fixed-rate only
- No super conforming, temporary subsidy buydowns or Texas Equity Section 50(a)(6) Mortgage
- Cash out limited to $250
- No existing secondary financing may be satisfied with proceeds
Standard LTV/TLTV/HTLTV limits per the Seller/Servicer Guide Bulletin 2021-17:
- 97%* maximum: 1-unit properties except for the following:
- 95% maximum: Manufactured homes
- 95%* maximum: Mortgage with non-occupying borrower
Note: *A TLTV ratio up to 105% is permitted when the Mortgage is not secured by a Manufactured Home and secondary financing is an Affordable Second®.
Note: Newly expanded loan terms effective October 20, 2021. Refer to Guide Bulletin 2021-33 for details.
- Eligibility/Underwriting
Minimum Indicator Score
No minimum requirement for Loan Product Advisor® (LPASM) and manually underwritten mortgages.
Note: There is no minimum Indicator Score required for eligibility of Refi Possible Mortgages; however, the Seller must identify and deliver an Indicator Score for all Refi Possible Mortgages in accordance with the requirements of Section 5203.2(e). If the Seller determines that there is no usable Credit Score due to insufficient information or inaccurate information, the Mortgage is not eligible for sale to Freddie Mac.
Maximum Debt-to-Income Ratio
65% for LPA and manually underwritten mortgages
- Collateral Assessment
- Standard property valuation – Automated Collateral Evaluation (ACE) or appraisal required
- A $500 credit will be provided to the Seller when an appraisal is obtained. The Seller must pass the credit to the borrower
- Special Requirements
Income Verification/Documentation
Primary Base Non-Fluctuating
- YTD paystub and 10-day pre-closing verification (PCV) (or written verification of employment (VOE) and PCV)
Primary Hourly Fluctuating
- YTD paystub, most recent W-2 and10 day PCV (or written VOE and 10-day PCV)
Primary Other Fluctuating (e.g. overtime, bonus etc.)
- YTD paystub, most recent W-2 and 10-day PCV (or written VOE and 10-day PCV)
Military
- Most recent Leave and Earnings Statement
Self-Employed
- Most recent complete individual and business tax return and third-party verification of the current existence of the business dated no more than 120 days before Note Date
Alimony, Child Support or Separate Maintenance
- Most recent one month documentation to evidence receipt of the alimony, child support and/or separate maintenance payment amount. A copy of the signed court order, legally binding agreement and/or final divorce decree verifying the payor’s obligation for the previous one month, including the amount and duration of the obligation.
Note: For all other income types and characteristics; standard Guide requirements apply
Expanded Eligibilities: Refinance is Easier than Ever for More of Your Borrowers
With our newly expanded eligibility requirements and product flexibilities for Refi Possible, you are able to help even more eligible low- and moderate-income borrowers refinance their existing mortgages.
For the offering:
- Removal of the $5,000 cap on financing costs
- Total borrower(s) qualifying income less than or equal to 100% of AMI
- Removal of the maximum 10-year (120-months) seasoning on existing loans. A minimum of 12-month loan seasoning is required
- Removal of the minimum 620 indicator score requirement.
Borrower Benefits:
- Removal of the minimum $50 monthly mortgage payment reduction.
- Maintaining the minimum 50 bps interest rate reduction
For More Information:
Contact your Freddie Mac representative or the Customer Support Contact Center (800-FREDDIE).
Grow Your Book of 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.
- Expand your market opportunity: Accommodate borrowers in a wide range of life stages with low- and moderate-incomes looking to expand their monthly savings.
- Expanding your business by meeting a greater variety of client needs: Offer expanded eligibility features to meet the needs of diverse borrower situations, giving them the practical solutions to sustain their homeownership and build generational wealth.
- Benefit from certainty: Choose to qualify through Loan Product Advisor for greater certainty in the loans you sell to Freddie Mac.
Serve as a Trusted Advisor
- Improve spending capabilities: Offer lower monthly mortgage payments and improved spending power on other expenses
- Sustainable homeownership: Fulfill the dream of homeownership with access to credit by securing low interest rates and qualifying with expanded flexibilities.
- Equitable housing: Overcome common borrower challenges and enable homeowners across all communities to build generational wealth.