Enhanced Relief RefinanceSM Mortgage
The Freddie Mac Enhanced Relief RefinanceSM Mortgage provides opportunities to borrowers with existing Freddie Mac mortgages who are making timely payments, but are unable to take advantage of the standard Freddie Mac "no cash-out" refinance offering because the new mortgage exceeds maximum loan-to-value (LTV) limits.
This offering builds on the Freddie Mac Relief RefinanceSM Mortgage (the Freddie Mac implementation of the Home Affordable Refinance Program® (HARP®). Relief Refinance Mortgages – Same Servicer and Open Access which has been extended to allow application received dates on or before December 31, 2018 and settlement dates on or before September 30, 2019.
Enhanced Relief Refinance Mortgages are:
- Subject to minimum LTV ratios.
- Available to Sellers regardless of whether they are also the current Servicer of the mortgage being refinanced.
|Mortgage Being Refinanced – Eligibility Requirements
||Detailed requirements for Enhanced Relief Refinance Mortgage can be found in the Single-Family Seller/Servicer Guide (Guide) Chapter 4304.
The mortgage being refinanced must:
- Be a First Lien, conventional mortgage, owned or securitized by Freddie Mac.
- Not be a Freddie Mac Relief Refinance Mortgage.
- Have a Note Date on or after October 1, 2017.
- Be seasoned for at least 15 months (that is, at least 15 months must have passed between the note date of the mortgage being refinanced and the note date of the Enhanced Relief Refinance Mortgage)
- Not be a mortgage subject to an outstanding repurchase request.
|Mortgage Payment History
- The mortgage has not been 30-days delinquent in the most recent six months; and
- Has not been 30-days delinquent more than once in the most recent 12 months.
- Effective for mortgages with application received dates on or after November 1, 2018.
- A conventional 15-, 20-, or 30-year fixed-rate mortgage.
- A conventional 5-year, 5/1, 7/1 or 10/1 ARM, provided the Mortgage being refinanced is an ARM, and except that a Mortgage secured by a Manufactured Home must not be a 5-year or a 5/1 ARM.
- No program expiration date.
- All occupancy types are eligible.
- LTV ratios that exceed the maximum LTV ratio limits for Freddie Mac standard “no cash-out” refinance mortgage (Note: due to the implementation of the Enhanced Relief Refinance offering, special requirements for “no cash-out” refinances owned or securitized by Freddie Mac, including the special LTV, TLTV and HTLTV limits will be retired at a later date).
- Lenders are not required to comply with standard waiting periods and re-establishment times for derogatory events (e.g., bankruptcy, foreclosure).
The following mortgage types are ineligible:
- Existing mortgages originated as part of the Home Affordable Refinance Program (HARP) – Relief Refinance Mortgages (Same Servicer and Open Access).
|Minimum LTV Ratios
||Number of Units
||Minimum LTV Ratio
||1-unit (including manufactured homes)
(including manufactured homes)
|2- to 4-unit
|Maximum LTV Ratios
- For adjustable-rate mortgages, the maximum LTV ratio is 105%.
- For fixed-rate mortgages, there is no maximum LTV ratio.
- Reduction in the interest rate of their First Lien Mortgage.
- Replacing an ARM with a FRM.
- Reduction in amortization term of the First Lien Mortgage.
- Reduction in the monthly principal and interest payment of the First Lien Mortgage.
- The existing mortgage must be seasoned at least 15 months (that is, at least 15 months must have passed between the note date of the mortgage being refinanced and the note date of the Enhanced Relief Refinance Mortgage).
|Use of Mortgage Proceeds
- New mortgage amount limited to the payoff of the unpaid principal balance accrued interest, the financing of the closing costs not to exceed $5,000 and cash disbursed to the borrower not to exceed $250.
- Excess proceeds must be applied as a principal curtailment on the new mortgage.
Enhanced Relief Refinance helps you:
- Meet the needs of borrowers who are making timely mortgage payments but have been unable to refinance due to declining property values.
- Take advantage of expanded refinancing opportunities.
- Provide additional flexibilities for mortgages with LTV ratios that exceed maximum limits for a “no cash-out” refinance offering.
Enhanced Relief Refinance helps your borrowers:
- Refinance into a more stable and sustainable mortgage that promotes long-term homeownership success.
- Take advantage of expanded LTV ratios for mortgages.
- Potentially reduce principal and interest payment.
For More Information
- Contact your Freddie Mac representative.