Last year was exceptional for many reasons. For homeowners, an unexpected positive result of the pandemic was historically low interest rates. These low rates resulted in the most refinances in nearly two decades. While many Americans took advantage of these cost savings and were able to lower their monthly mortgage payments, there are still millions who haven’t been able to.

That’s why Fannie Mae and Freddie Mac are paving the way for low-income borrowers whose mortgages are owned or guaranteed by them to refinance and lower their mortgage payments, saving them potentially thousands of dollars over the course of their loan.

The new refinance option being launched this summer by Fannie Mae will be called RefiNow™️, and the new offering by Freddie Mac, slated to launch in August, is dubbed Refi Possible™️. Each organization will release more information closer to their program’s launch date. Still, we will introduce you to the basics of them, how to check if your loan is financed or guaranteed by Freddie Mac or Fannie Mae, general qualification requirements, and, most importantly, your potential savings.

New Refinancing Options Available this Summer

These new options from Fannie Mae and Freddie Mac were created to help homeowners earning 80% or lower than their area median income (AMI) refinance at a reduced interest rate and lower their monthly mortgage payments. For context, AMI is the middle household income in a region. So, if you looked at the AMI figure for your area and your household is earning 80% or less of that number, you’d be in the target group for this new offering.

To ensure that homeowners utilizing these new programs actually see tangible benefits, there are requirements for the minimum savings lenders must provide. We’ll get to that further down.

How to Lookup if your Loan can be Refinanced using these Programs

It’s important to note that your current mortgage must be owned or guaranteed by either Fannie Mae or Freddie Mac to take advantage of either the RefiNow or Refi Possible program.

Before jumping into the qualification requirements, we recommend utilizing these Lookup Tools to verify that.

General Program Qualification Requirements

While the final details of each program might change leading up to their planned launch date, here are the general requirements Freddie Mac and Fannie Mae have distributed.

To qualify for this new refinance option, a borrower needs to:

  • Have an owner-occupied, 1-unit, single-family mortgage owned or backed by Fannie Mae or Freddie Mac.
  • Have an income at or below 80% of the area median income (AMI).
  • Not have missed a mortgage payment in the past six months, and not missed more than one payment in the last year.
  • Not have a mortgage with a loan-to-value (LTV) ratio more than 97%, a debt-to-income (DTI) ratio over 65%, or a FICO score lower than 620.

How Much Can This New Option Save Me?

Like we alluded to earlier, to ensure low-income homeowners genuinely benefit from these new offerings, lenders have some requirements they must meet when completing these refinances:

  • The refinance must result in a savings of at least $50 per month on the borrower’s mortgage payment.
  • There must be a reduction of at least 0.50% to the borrower’s interest rate.

Additionally, borrowers can benefit from an up to $500 appraisal credit if they’re not already eligible for an appraisal waiver.


These new programs from Fannie Mae and Freddie Mac are exciting because they will allow even more homeowners to enjoy the cost savings that refinancing can offer. We encourage you to get in touch with a loan officer today so that you’re ready to take advantage of RefiNow or Refi Possible as soon as they hit the market.

The included content is intended for informational purposes only and should not be relied upon as professional advice. Additional terms and conditions apply. Not all applicants will qualify. Consult with a finance professional for tax advice or a mortgage professional to address your mortgage questions or concerns. This is an advertisement. Prepared 6/1/2021.