Fannie Mae Refi Plus - How It Works
Please note that we are not associated with Fannie Mae in any way. So if you have any questions about their Refi Plus program, you will have to contact a Fannie Mae representative. This lesson has been posted to the Mortgage Refinance School as a basic guide to Refi Plus for homeowners. With that out of the way, let’s talk about this unique refinancing program and how it works.
About Fannie Mae
This lesson will make a lot more sense if we start with an overview of the Fannie Mae organization. Everything I’m about to tell you is available on their own website, if you want to learn more.
Fannie Mae is part of the secondary mortgage market. The company’s full name is the Federal National Mortgage Association. But don’t let the “federal” name fool you — they are not part of the federal government. Fannie Mae was originally chartered by Congress, and they still receive government sponsorship, but they are a private company.
What does this have to do with mortgage refinance and the Refi Plus program? Well, Fannie Mae supports the secondary mortgage market by purchasing loans made by lenders in the primary market. For example, ABC Mortgage Company gives you a mortgage loan, and then they turn around and sell that loan to Fannie Mae in the secondary market. They also influence the refinance market in much the same way, and programs such as the Refi Plus are actually created by Fannie Mae.
About the Refi Plus Program
With that background information aside, let’s talk about the Refi Plus program and what it does. According to the company’s website, this program is designed to simplify “the process of refinancing loans that are already in a lender’s servicing portfolio.”
The Refi Plus program is unique in several ways. For one thing, it allows for a loan-to-value ratio (LTV) of up to 125%. This means the loan amount could be more than the home’s value — a huge plus for homeowners who saw their property value drop during the housing crash. But in order to refinance through the Refi Plus program, you must already have a Fannie Mae loan. And of course, there are other qualification criteria you must meet.
Does Fannie Mae currently own your mortgage loan? If you’re interested in Refi Plus, this is the first thing you need to find out. You can do so by using Fannie Mae’s mortgage lookup tool.
The company recently announced some new underwriting guidelines for the Refi Plus program, and from what I can tell they are more flexible than before. This means you can qualify for refinancing even if you don’t have perfect credit, and without a home appraisal in some cases. These are big changes that will surely attract more homeowners to the Fannie Mae program.
How to Apply for the Refi Program
First, you need to make sure your mortgage is currently owned by Fannie Mae, because you won’t be eligible for Refi Plus otherwise. To do this, you can use the lookup tool that I linked to earlier. After that, you’ll need to locate a lender that’s in the Fannie Mae network (use this search tool), and apply for the refinancing program directly through that lender.
The lender will review your financial information and your current mortgage to see if you meet the Refi Plus underwriting guidelines. If you do meet the guidelines, you’ll probably be approved for the program in short order. It’s a fairly streamlined process.
I hope this lesson helps you understand your refinancing options with Fannie Mae loans, and I wish you all the best in your refi efforts.
Types of Loans | admin | 
July 17, 2009 7:48 am
