Does Home Affordable Refinance provide opportunities for borrowers with existing Alt-A or subprime loans to refinance into more favorable terms?
If Fannie Mae is the investor on the borrower’s existing Alt-A or subprime loan, it may be eligible for the refinance flexibilities offered through DU Refi Plus, but is not eligible under Refi Plus (manual underwriting). Fannie Mae lenders may contact their customer account teams to discuss other options for loans that do not meet the manual eligibility criteria. Q30. Can borrowers with a first-lien loan and a home equity line of credit or a closed-end second mortgage combine the first and second mortgages into the new refinance if the maximum LTV is not exceeded? No. Subordinate financing in the form of a home equity line of credit or a closed-end second mortgage may not be satisfied with the proceeds of the refinance mortgage. This restriction includes any purchase-money second liens that typically would be permitted under our standard limited cash-out refinance guidelines. The authority given to Fannie Mae by FHFA for refinances of existing Fannie Mae loans with LTVs up to 125 perce
