Skip to Page Content | Skip to Site Navigation | Skip to Section Navigation

Enhanced Relief Refinance MortgageSM FAQs

General

  1. Can borrowers who have already refinanced into a Relief Refinance Mortgage refinance through Enhanced Relief Refinance?
  2. If the mortgage being refinanced needs to have a note date on or after October 1, 2017, does this mean the earliest an Enhanced Relief Refinance Mortgage can close is January 1, 2019?
  3. Does the Enhanced Relief Refinance offering have expiration dates like the Relief Refinance offering does?

Mortgage and Property Type

  1. Why are ARMs with loan-to-value (LTV) ratios greater than 105 percent not eligible for Enhanced Relief Refinance Mortgages?
  2. Why are 1/1 and 3/1 ARMs not eligible under the Enhanced Relief Refinance Mortgage offering?
  3. Does the Enhanced Relief Refinance Mortgage have to represent the same occupancy as the mortgage being refinanced?
  4. Can an Enhanced Relief Refinance Mortgage be amortized for a period other than 15, 20, or 30 years?

General Underwriting Requirements

  1. Is there a maximum debt-to-income ratio requirement for Enhanced Relief Refinance Mortgages?
  2. Are reserves required for Enhanced Relief Refinance Mortgages?
  3. Is a new (or updated) flood certification required for Enhanced Relief Refinance Mortgages?
  4. Does Freddie Mac have a maximum number of financed property requirement for Enhanced Relief Refinance Mortgages secured by investment properties or second homes?
  5. Under what circumstances can a borrower on the mortgage being refinanced be omitted from the Enhanced Relief Refinance Mortgage?
  6. Can a borrower who is not on the mortgage being refinanced be added to the Enhanced Relief Refinance Mortgage?
  7. Can a mortgage with a recent history of forbearance or a repayment plan be refinanced as an Enhanced Relief Refinance Mortgage?
  8. If I manually underwrite the Enhanced Relief Refinance Mortgage, how will I be able to tell if the mortgage being refinanced met the note date requirement or if it was a Relief Refinance Mortgage?

Indicator Scores

  1. Can a borrower who has a low credit score qualify for an Enhanced Relief Refinance Mortgage?
  2. Can a borrower who does not have a usable credit score due to insufficient or inaccurate information qualify for an Enhanced Relief Refinance Mortgage?
  3. Do I have to deliver an indicator score for Enhanced Relief Refinance Mortgages in instances where I do not have to requalify the borrower?

Closing Costs

  1. How may excess proceeds from an Enhanced Relief Refinance Mortgage transaction be applied?
  2. If there are proceeds remaining from the refinance that exceed the amount allowed to be distributed as cash out to the borrower, do I have options other than making a principal curtailment at closing?
  3. Do I have to document the source of closing costs paid by the borrower for Enhanced Relief Refinance Mortgages?
  4. Can a borrower elect a higher interest rate for the Enhanced Relief Refinance Mortgage and apply the funds from premium financing toward closing costs, financing costs and prepaids/escrows?

Secondary Financing

  1. When an existing junior lien is being refinanced simultaneously with the first lien, can the unpaid principal balance amount of the existing junior lien increase?

Loan Product Advisor

  1. Will Loan Product Advisor automatically identify mortgages eligible for the Enhanced Relief Refinance Mortgage?
  2. Are mortgages submitted through Loan Product Advisor that receive an Ineligible, Incomplete or Invalid eligible for the Enhanced Relief Refinance Mortgage?
  3. Will Loan Product Advisor check the note date and whether the existing loan was a Relief Refinance Mortgage when determining eligibility?

Mortgage Insurance

  1. Is mortgage insurance required on the Enhanced Relief Refinance Mortgage that has LTV ratio greater than 80 percent?
  2. If an existing mortgage has lender-paid mortgage insurance (LPMI), is it eligible under the Enhanced Relief Refinance Mortgage offering?

Collateral Assessment

  1. Is obtaining an exterior-only appraisal acceptable for determining property value for Enhanced Relief Refinance Mortgages?
  2. For the new Enhanced Relief Refinance Mortgage, will I be relieved of the representations and warranties for value, condition, and marketability of the property regardless of the type of property valuation used?
  3. What are Freddie Mac’s property valuation requirements for Enhanced Relief Refinance Mortgages secured by properties located in areas affected by disasters?

Home Value Explorer®

  1. Can I use HVE for all Enhanced Relief Refinance Mortgages?
  2. How do I obtain an HVE value of the property for the Enhanced Relief Refinance Mortgage?
  3. Can I use the high or low HVE value estimates instead of the HVE point value estimate for determining property value for Enhanced Relief Refinance Mortgages?
  4. If I have several HVE point value estimates that are dated within 120 days as of the note date, which HVE point value should I use?
  5. If I do not get a HVE value does this mean I can't originate the loan?
  6. How do I access the HVE look-up tool if I am not a Loan Product Advisor user?

Delivery and Execution Requirements

  1. Are there any special delivery requirements for Enhanced Relief Refinance Mortgages?
  2. How do I deliver Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent under the Guarantor execution?

Cash Contracts

  1. Can I commingle in the same Cash commitment Enhanced Relief Refinance Mortgages with LTV ratios less than 105 percent and Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent?
  2. Can I commingle Enhanced Relief Refinance cash commitments with Relief Refinance cash commitments?
  3. How do I identify fixed-rate contracts for Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent?
  4. If I took out a contract for Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent, and the mortgages end up having LTV ratios less than 105 percent when I close them, do I need to pair out of the contract?

Cash Adjustor

  1. What is the cash adjustor value?

Representation and Warranty Framework

  1. How does the representation and warranty framework outlined in Guide Section 1301.11 apply to Enhanced Relief Refinance Mortgages?

General

  1. Can borrowers who have already refinanced into a Relief Refinance Mortgage refinance through Enhanced Relief Refinance?

    No.
  2. If the mortgage being refinanced needs to have a note date on or after October 1, 2017, does this mean the earliest an Enhanced Relief Refinance Mortgage can close is January 1, 2019?

    Yes. The note date of the new Enhanced Relief Refinance must be at least 15 months from the note date of the mortgage being refinanced.
  3. Does the Enhanced Relief Refinance offering have expiration dates like the Relief Refinance offering does?

    No.

Mortgage and Property Type

  1. Why are ARMs with loan-to-value (LTV) ratios greater than 105 percent not eligible for Enhanced Relief Refinance Mortgages?

    ARMs with an LTV ratio greater than 105 percent are not eligible for Enhanced Relief Refinance due to special disclosure and reporting requirements for mortgages with higher LTV ratios.
  2. Why are 1/1 and 3/1 ARMs not eligible under the Enhanced Relief Refinance Mortgage offering?

    The intent of this offering is to allow borrowers to refinance into mortgage products that better position them for long-term homeownership success. The ARM products we allow are 5-year, 5/1-, 7/1- and 10/1-year ARMs. These ARMs have longer fixed-initial periods, making them more stable products compared to short-term ARMs (1/1 and 3/1).
  3. Does the Enhanced Relief Refinance Mortgage have to represent the same occupancy as the mortgage being refinanced?

    No. The mortgage being refinanced and the new Enhanced Relief Refinance Mortgage do not have to represent the same occupancy.
  4. Can an Enhanced Relief Refinance Mortgage be amortized for a period other than 15, 20, or 30 years?

    Yes. For example, a 27-year mortgage can be sold to Freddie Mac as a 30-year mortgage provided it meets the requirements for Enhanced Relief Refinance Mortgages in Guide chapter 4304.

General Underwriting Requirements

  1. Is there a maximum debt-to-income ratio requirement for Enhanced Relief Refinance Mortgages?

    No, unless:

    • The P&I payment for the Enhanced Relief Refinance Mortgage will increase by more than 20 percent,
    • The Enhanced Relief Refinance Mortgage is a Higher-Priced Covered Transaction (HPCT) or Higher-Priced Mortgage Loan (HPML), or
    • A borrower on the note of the mortgage being refinanced is omitted from the note of the Enhanced Relief Refinance Mortgage and the remaining borrower(s) are being qualified for the mortgage based on the requirements in Guide Section 4304.

    For all these mortgages, you must manually underwrite the loan to ensure that the debt payment-to-income ratio is not greater than 45 percent, regardless of the Loan Product Advisor® Risk Class. See Section 4304.5 for full details.

  2. Are reserves required for Enhanced Relief Refinance Mortgages?

    No. However, you may opt to verify 12 months’ reserves, using the monthly payment amount as described in Sections 5501.2 and 5501.3, in lieu of verifying an income source as required in Section 4304.4, provided that:

    • The P&I payment for the Enhanced Relief Refinance Mortgage will not increase by more than 20 percent,
    • The Enhanced Relief Refinance Mortgage is not a Higher-Priced Covered Transaction (HPCT) or Higher-Priced Mortgage Loan (HPML), and

    A borrower on the note of the mortgage being refinanced is not being omitted from the note of the Enhanced Relief Refinance Mortgage under the option of qualifying the remaining Borrower(s) based on the requirements of Section 4304.5.5.

  3. Is a new (or updated) flood certification required for Enhanced Relief Refinance Mortgages?

    Flood zone determination must be made for each mortgage sold to Freddie Mac, including Enhanced Relief Refinance Mortgages.
  4. Does Freddie Mac have a maximum number of financed property requirement for Enhanced Relief Refinance Mortgages secured by investment properties or second homes?

    No. For Enhanced Relief Refinance Mortgages secured by an investment property or a second home, you are not required to represent and warrant that the mortgage meets our requirements related to the number of financed properties in Guide Subsections 4201.15(b)(2) or 4201.16(c).
  5. Under what circumstances can a borrower on the mortgage being refinanced be omitted from the Enhanced Relief Refinance Mortgage?

    A borrower on the mortgage being refinanced may be omitted for any cause, however, at least one borrower from the mortgage being refinanced must be retained. When a borrower is omitted from the Enhanced Relief Refinance Mortgage:

    • The mortgage file must contain evidence that the remaining borrower has been making the mortgage payments, including the payments for any secondary financing, for the most recent 12-month period, or
    • The remaining borrower(s) must qualify for the mortgage based on the requirements in Guide Section 4304.5, or
    • In the case of death, you must obtain and retain in the mortgage file documentation of the borrower’s death.
  6. Can a borrower who is not on the mortgage being refinanced be added to the Enhanced Relief Refinance Mortgage?

    No.
  7. Can a mortgage with a recent history of forbearance or a repayment plan be refinanced as an Enhanced Relief Refinance Mortgage?

    The mortgage may be eligible to be refinanced as an Enhanced Relief Refinance Mortgage provided it is brought current prior to the note date and all other Enhanced Relief Refinance Mortgage requirements are met. To bring the loan current, the borrower must remit sufficient funds to pay all outstanding arrearages through reinstatement or completion of a repayment plan. The arrearages may not be included in the proceeds of the Enhanced Relief Refinance Mortgage.
  8. If I manually underwrite the Enhanced Relief Refinance Mortgage, how will I be able to tell if the mortgage being refinanced met the note date requirement or if it was a Relief Refinance Mortgage?

    You will be able to use the Loan Look-up tool to obtain this information. The tool will be updated by November 1, 2018.

Indicator Scores

  1. Can a borrower who has a low credit score qualify for an Enhanced Relief Refinance Mortgage?

    There is no minimum indicator score requirement unless:

    • The P&I payment for the Enhanced Relief Refinance Mortgage will increase by more than 20 percent,
    • The Enhanced Relief Refinance Mortgage is a Higher-Priced Covered Transaction (HPCT) or Higher-Priced Mortgage Loan (HPML), or
    • A borrower on the note of the mortgage being refinanced is omitted from the note of the Enhanced Relief Refinance Mortgage and the remaining borrower(s) are being qualified for the mortgage based on the requirements in Guide Section 4304.5.
  2. Can a borrower who does not have a usable credit score due to insufficient or inaccurate information qualify for an Enhanced Relief Refinance Mortgage?

    If you determine that there is no usable credit score due to insufficient information or inaccurate information, the mortgage may be eligible for purchase, unless a minimum indicator score is required as outlined in Section 4304.5. Refer to Guide Sections 5203.2(f) and 6302.11 for indicator score delivery requirements.
  3. Do I have to deliver an indicator score for Enhanced Relief Refinance Mortgages in instances where I do not have to requalify the borrower?

    Yes. You must identify and deliver an indicator score for all Enhanced Relief Refinance Mortgages in accordance with the requirements of Guide Section 5203.2(e), unless there is no usable credit score.

Closing Costs

  1. How may excess proceeds from an Enhanced Relief Refinance Mortgage transaction be applied?

    After proceeds are applied as required by the Guide, any excess amount must be applied as a principal curtailment to the Enhanced Relief Refinance Mortgage at closing and must be clearly reflected on the Settlement/Closing Disclosure Statement. Under no circumstances may cash disbursed to the borrower exceed $250.
  2. If there are proceeds remaining from the refinance that exceed the amount allowed to be distributed as cash out to the borrower, do I have options other than making a principal curtailment at closing?

    The only alternative to a principal curtailment is to reduce the loan amount prior to closing.
  3. Do I have to document the source of closing costs paid by the borrower for Enhanced Relief Refinance Mortgages?

    No, except as specifically stated otherwise in Guide Section 4304.5.
  4. Can a borrower elect a higher interest rate for the Enhanced Relief Refinance Mortgage and apply the funds from premium financing toward closing costs, financing costs and prepaids/escrows?

    Yes. A borrower may elect a higher interest rate for the Enhanced Relief Refinance Mortgage and apply the premium financing toward closing costs, financing costs and prepaids/escrows, provided that the “Borrower benefit” provision in Guide Section 4304.1 is met.

Secondary Financing

  1. When an existing junior lien is being refinanced simultaneously with the first lien, can the unpaid principal balance amount of the existing junior lien increase?

    No, the unpaid principal balance of the new junior lien may not be more than the unpaid principal balance, at the time of payoff, of the junior lien being refinanced.

Loan Product Advisor

  1. Will Loan Product Advisor automatically identify mortgages eligible for the Enhanced Relief Refinance Mortgage?

    No. You will need to select the Offering ID 320 in Loan Product Advisor if you are submitting the mortgage as an Enhanced Relief Refinance Mortgage.
  2. Are mortgages submitted through Loan Product Advisor that receive an Ineligible, Incomplete or Invalid eligible for the Enhanced Relief Refinance Mortgage?

    If the mortgage receives a Loan Product Advisor evaluation status of Invalid, Ineligible or Incomplete, you must take all steps possible in accordance with Guide Section 5101 to correct the information and resubmit the mortgage to Loan Product Advisor. Alternatively, the loan can be manually underwritten to determine eligibility, and must meet the terms of Guide Chapter 4304.
  3. Will Loan Product Advisor check the note date and whether the existing loan was a Relief Refinance Mortgage when determining eligibility?

    Yes, once Loan Product Advisor is updated on November 1, 2018, it will check for those eligibility requirements.

Mortgage Insurance

  1. Is mortgage insurance required on the Enhanced Relief Refinance Mortgage that has LTV ratio greater than 80 percent?

    If the existing mortgage does not currently have mortgage insurance, then mortgage insurance is not required for the Enhanced Relief Refinance Mortgage. If the mortgage being refinanced has mortgage insurance, it must be transferred to the Enhanced Relief Refinance Mortgage with the existing or replacement certificate and the same percentage of coverage.
  2. If an existing mortgage has lender-paid mortgage insurance (LPMI), is it eligible under the Enhanced Relief Refinance Mortgage offering?

    Yes, LPMI is permitted. The same percentage of LPMI coverage must be maintained for the Enhanced Relief Refinance Mortgage. You should consult with the mortgage insurer to determine if the mortgage insurer will permit the transfer of LPMI or have different rules for loans with LPMI.

Collateral Assessment

  1. Is obtaining an exterior-only appraisal acceptable for determining property value for Enhanced Relief Refinance Mortgages?

    No. If the new appraisal option is selected for the Enhanced Relief Refinance Mortgage, the appraisal must be an appraisal with an interior and exterior inspection. The appraisal must meet the requirements of your purchase documents, including the requirements outlined in Guide Subsection 4304.7(b).
  2. For the new Enhanced Relief Refinance Mortgage, will I be relieved of the representations and warranties for value, condition, and marketability of the property regardless of the type of property valuation used?

    If you use Option 1: Home Value Explorer (HVE), you will be relieved of representations and warranties related to value, condition and marketability of the property.

    If you obtain a new appraisal (Option 2), you will be relieved of representations and warranties related to condition and marketability, however you will still be responsible for the representations and warranties related to value.

  3. What are Freddie Mac’s property valuation requirements for Enhanced Relief Refinance Mortgages secured by properties located in areas affected by disasters?

    For Enhanced Relief Refinance Mortgages secured by properties in areas affected by disasters:

    • Repairs to a property damaged as the result of a disaster will not be required prior to the settlement date as long as the mortgage meets the insurance requirements in Guide Chapter 8202 and
    • There are no restrictions on the use of HVE values. A Seller can use an HVE point value estimate with a high or medium confidence score provided that the mortgage meets the insurance requirements of Guide Chapter 8202.

Home Value Explorer®

NOTE: Seller/Servicers must meet the terms and conditions defined in Guide Exhibit 32 when using Freddie Mac's HVE look-up tool.

  1. Can I use HVE for all Enhanced Relief Refinance Mortgages?

    You may use HVE data for Enhanced Relief Refinance Mortgages to determine property values for certain 1-unit and 2-unit properties. You must review the HVE point value estimate and determine whether it meets the requirements of the program.
  2. How do I obtain an HVE value of the property for the Enhanced Relief Refinance Mortgage?

    Loan Product Advisor will provide the value on eligible mortgages. Alternatively, you can sign up to purchase HVE through one of Freddie Mac's approved distributors. Third-party originators may only have access to the HVE look-up tool through Freddie Mac-approved Seller/Servicers under the terms and conditions defined in Guide Exhibit 32.
  3. Can I use the high or low HVE value estimates instead of the HVE point value estimate for determining property value for Enhanced Relief Refinance Mortgages?

    No. You must use the HVE point value estimate. Additionally, the HVE point value estimate must receive a medium or high confidence score to be eligible for use.
  4. If I have several HVE point value estimates that are dated within 120 days as of the note date, which HVE point value should I use?

    We do not prescribe which HVE point value estimate must be used in this scenario provided all applicable requirements are met (e.g., the value used is no more than 120 days old as of the note date, the Forecast Standard Deviation must not be greater than 0.200, you maintain the HVE point value estimate and any information necessary to evidence compliance with the HVE requirements, and must provide a copy of the HVE documentation upon Freddie Mac's request).
  5. If I do not get a HVE value does this mean I can't originate the loan?

    No. Our requirements permit two options to determine property value: the use of HVE or a new appraisal.
  6. How do I access the HVE look-up tool if I am not a Loan Product Advisor user?

    You may sign up to become a Loan Product Advisor user. Alternatively, you can sign up to purchase HVE through one of Freddie Mac's approved distributors listed on FreddieMac.com.

Delivery and Execution Requirements

  1. Are there any special delivery requirements for Enhanced Relief Refinance Mortgages?

    Yes. When delivering Enhanced Relief Refinance Mortgages, you must:

    • Deliver the exact 9-digit Freddie Mac loan number for the mortgage being refinanced
    • Complete all required mortgage insurance fields
    • Refer to Guide Section 6302.40 for special delivery requirements for Enhanced Relief Refinance Mortgages
  2. How do I deliver Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent under the Guarantor execution?

    These mortgages must be pooled separately and you must select specific security products in the Selling System® as follows: from the "Create Guarantor Contract" screen choose the following from the "Security Product" drop-down menu: 30 (20, 15) year Gold PC High LTV >105 - <= 125%. See Guide Exhibit 17S for additional information.

Cash Contracts

  1. Can I commingle in the same Cash commitment Enhanced Relief Refinance Mortgages with LTV ratios less than 105 percent and Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent?

    No. You must take out a separate Cash commitment for LTV ratios greater than 105 percent.
  2. Can I commingle Enhanced Relief Refinance cash commitments with Relief Refinance cash commitments?

    Yes, but separate cash commitments must be taken out for LTVs greater than 105 percent LTV.
  3. How do I identify fixed-rate contracts for Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent?

    These mortgages must be identified by selecting one of the following options for the "LTV Range for the contract" field on the "Take Out Cash Contract" screen in the Selling System:

    • LTV ratios greater than 105 percent and less than or equal to 115 percent: select ">105% - <=115%"
    • LTV ratios greater than 115 percent: select ">115%"
  4. If I took out a contract for Enhanced Relief Refinance Mortgages with LTV ratios greater than 105 percent, and the mortgages end up having LTV ratios less than 105 percent when I close them, do I need to pair out of the contract?

    Yes. You will need to pair out of the contract or substitute the mortgage with another loan(s).

Cash Adjustor

  1. What is the cash adjustor value?

    The cash adjustor for Enhanced Relief Refinance Mortgages applies only to loans with LTV ratios greater than 105 percent sold under fixed-rate Cash. The cash adjustor values may change at any time at Freddie Mac’s discretion. The current cash adjustor value matrix, Cash Adjustor for Enhanced Relief Refinance Mortgages, is available through the Selling System welcome page.

Representation and Warranty Framework

  1. How does the representation and warranty framework outlined in Guide Section 1301.11 apply to Enhanced Relief Refinance Mortgages?

    An Enhanced Relief Refinance Mortgage may obtain relief from certain selling representations and warranties under Version 2 based either on the borrower’s acceptable payment history, or a satisfactory conclusion of a Freddie Mac quality control review.

Back to Top