The Fannie Mae refinance plus program

Fannie Mae Refi Plus (also known as Fannie Mae Refinance Plus and FNMA Refi Plus) is the HARP or Home Affordable Refinance Program offered through Fannie Mae, or the Federal National Mortgage Association.

Purpose Of The Fannie Mae Refinance Plus Program

The FNMA Refi Plus program was created as a way to help stimulate the housing economy by making it easier for lenders to refinance loans already in their portfolio. One way the Fannie Mae Refi Plus Program does this is by allowing homeowners to refinance, even if the value of their home now is less than the amount they still owe on their existing mortgage. Through the program, lenders with Fannie Mae backed mortgages will now be allowed to consider making refinance loans for homes with a loan to value ratio (LTV) of up to 125%. That means the home could be a full 1/4 less valuable than the amount owed on the loan and still be eligible for a FNMA Refi Plus loan.

Besides the first benefits already stated above, the ability to refinance a mortgage higher than the current value of the home, there are a couple of other key benefits to FNMA Refi Plus as well. A Fannie Mae Refi Plus loan may have a lower monthly interest and principal payment than their existing mortgage and/or it may get a homeowner out of a riskier (i.e. subprime) mortgage in favor of a more stable, fixed rate refinance mortgage. All Fannie Mae Refi Plus rates are fixed rates.

Other benefits are that applicants do not need perfect credit, and may not even need a home appraisal done to qualify (with a PIW or Property Inspection Waiver). The lenders who make Fannie Mae Refi Plus loans also benefit from the transaction by reducing their risk of default on the loan.

Qualifying For The Fannie Mae Refi Plus Program

The biggest (or at least first) qualification for the Fannie Mae Refi Plus Program is that your existing mortgage already be in the Fannie Mae portfolio.

As part of the secondary mortgage market, Fannie Mae buys up existing loans in the primary mortgage market. Fannie Mae then becomes your new de facto lender. That means it is possible you could be eligible to get a Fannie Mae Refi Plus loan even if your existing mortgage loan wasn’t originally made with Fannie Mae. If Fannie Mae purchased your mortgage from your lender, then you may qualify for the Fannie Mae Refinance Plus Program. The Fannie Mae website has a free online look-up tool you can use to determine whether or not Fannie Mae does currently hold your loan or not.