High LTV Refinance Option
High LTV Refinance Option Temporarily Paused
Due to the low volume and the impact of the Revised QM Rule, we are temporarily pausing the acquisition of high LTV refinance loans. We will communicate any changes to the terms of this product in a future Selling Guide update.
Effective dates: All DU and manually underwritten high LTV refinances must have application dates on or before June 30, 2021 and must be purchased or securitized on or before Aug. 31, 2021.
The Fannie Mae high LTV refinance option provides refinance opportunities to borrowers who are paying their existing Fannie Mae mortgage on time but have a loan-to-value (LTV) ratio that exceeds the maximum allowed for a standard limited cash-out refinance.
Borrowers must benefit from the refinance in at least one of the following ways:
Reduced monthly principal and interest payment
Lower interest rate
Shorter amortization term
More stable mortgage products, such as moving from an adjustable-rate mortgage to a fixed-rate mortgage
Transferable mortgage insurance to the new loan
Simplified documentation requirements for employment, income, and assets
- Both Desktop Underwriter® (DU®) and manual underwriting options are available to the same or a new servicer