Refi Plus - The New Refinance Loan

Here are some of the finer points of the new refinance program being offered to lenders by Fannie Mae, and hopefully offered by lenders to brokers. That information is still forthcoming.

Maximum LTV Ratio

The maximum LTV ratio for DU Refi Plus and Refi Plus is 105 percent. There is no maximum CLTV or HCLTV; however, new subordinate financing is not permitted in conjunction with a DU Refi Plus or Refi Plus transaction.

MI Requirements (private mortgage insurance)

For new refinance transactions with an LTV ratio that exceeds 80 percent, MI may or may not be required depending on the current MI coverage on the existing loan. New refinance transactions with an LTV ratio less than 80 percent do not require mortgage insurance.

Eligible Borrowers

The borrower on the existing mortgage must be identical to the borrower(s) on the new mortgage. Borrower(s) may be added to the new loan, providing the existing borrower(s) is retained.

Ineligible Existing Mortgage Loans

Reverse, Second, and Government mortgage loans.

Loan Purpose

Limited cash-out refinances only, however, existing purchase money subordinate financing may not be satisfied with the proceeds of the Refi Plus mortgage loan.

All existing subordinate financing must be subordinated to maintain first lien priority of the new Refi Plus mortgage loan.

Credit History

No minimum credit score, but the borrower must meet the requirements for a Fannie Mae loan; and credit score will still be a factor in determining the interest rate.