Are loans that have lender provided borrower benefits eligible for the Loan Purchase Programs?
A4 Generally, loans that have lender provided borrower benefits are not eligible for these programs. However, as provided in an Electronic Announcement #1, posted on June 12, 2008, there are two exceptions. First, an otherwise eligible loan remains eligible even if the lender paid, or offers to pay, any or all of the borrower’s up-front fees (borrower origination fee and/or borrower default fee). Second, an otherwise eligible loan remains eligible even if the lender promised up to a one-quarter of one percent interest rate reduction if the borrower repays the loan using automatic repayment.
Related Questions
- Does the lender need to verify the borrower’s employment and income for the loan to be eligible for Refi Plus?
- What organizations are eligible to participate in either or both of the FFEL Loan Purchase Programs?
- Are loans with a life-of-loan servicing contract eligible for the Loan Purchase Commitment Program?
