Skip to Content

Fannie Mae Refi Plus

In early 2009 as our nation was just making the first stabs at economic stimulus, the Obama administration created a special mortgage program that would help homeowners who found themselves to be underwater in their homes equity.  This program is sometimes referred to as the HAMP loan (Home Affordable Mortgage Program), but in the industry the loan has come to be called the “DU Refi Plus”.  DU refers to the Fannie Mae desktop underwriter software that makes automated underwriting decisions for borrowers.  The Plus refers to GREATLY LOOSENED EQUITY REQUIREMENTS.

This mortgage program is to help existing homeowners who bought their house with a down payment, to find themselves in a zero to negative equity position with home values declining.  The Fannie Mae DU Refi Plus allows a new first mortgage to be up to 105% of the appraised value, WITH NO MORTGAGE INSURANCE.

EXAMPLE:  This means if you bought a house in 2005 for $250,000 and you owed $200,000 against it, you can refinance that loan at todays interest rate, even if the house appraises for $190,000.

So what’s the catch?  Ok… there are actually 3 catches:

  1. Catch #1- Rate and term refinances only! — this program is not to help homeowners who aggressively cashed out their homes in recent years.  Only those who purchased, and found their equity evaporated.
  2. Catch #2- Fannie Mae DU Refi Plus only works for existing loans that DO NOT have mortgage insurance. – This is a tough one, if you purchased with Lender paid mortgage insurance, or with regular PMI, you presently do not qualify for a Home Affordable, DU Refi Plus loan.  However- If you purchased with an 80/20 mortgage to avoid PMI, YOU CAN qualify to refinance the 80% first loan portion of your mortgages.  We would have to have the existing second loan agree to re-subordinate to the new first, but this has proven to be quite easy.  The LTV requirements are still 105%, and the CLTV requirements are virtually UNLIMITED.
  3. Catch #3- You ONLY QUALIFY IF YOUR EXISTING LOAN IS CURRENTLY BACKED BY FANNIE MAE. — Fannie mae purchases and securitizes about one in three of all mortgages made in the US.  If your current loan was not one of these, then its game over.

HOW CAN YOU FIND OUT IF YOUR LOAN IS BACKED BY FANNIE MAE? …. An excellent question, and you are in luck.  They were nice enough to make a website that tells you if yours is in the lucky Third.

IS MY LOAN BACKED BY FANNIE MAE?

If you would like a refinance analysis to determine if your loan qualifies for this program please contact James Adair for a refinance consultation

If your loan is NOT in this lucky pool of Fannie mae goodness, DONT PANIC!  There is an identical program available to those whose mortgages are backed by Freddie Mac! called the Freddie Mac Open Access Loan!