Roughly half of all mortgages in the US are backed by Fannie Mae and Freddie Mac. That’s a huge percentage! And, in late 2016 and early 2017, these organizations made a few changes to their processes.
Do you plan to secure a mortgage backed by Fannie Mae or Freddie Mac? Do you have a mortgage secured by either of these organizations? The following are some of the important updates of which you’ll want to be aware:
Loan Limits Have Increased
With Seattle’s booming real estate market, securing a home for less than $500,000 can be difficult. This is especially true in Bellevue, Kirkland, and Issaquah. Luckily, loan limits on standard conforming loans has been raised.
In the Seattle area, these government-backed loans are now capped at $592,250.
Extension & Replacement of Home Affordable Refinance Program
The Home Affordable Refinance Program (HARP) was created to help borrowers with loans backed by Fannie Mar and Freddie Mac improve their financial status. HARP allowed eligible borrowers to refinance, even if their loan balance exceeded their property value.
While this program was supposed to come to an end, it’s been extended until September 2017. Additionally, in October 2017, HARP will be replaced by a different high loan-to-value refinance program.
Appraisals Might Not Be Needed
In most cases, when you want to refinance your home, you’ll need your property to be appraised. This cost falls on you, the borrower.
However, your lender may be able to give you a Property Inspection Waiver (PIW). Qualifying mortgages must be underwritten electronically through Fannie Mae’s ‘Desktop Underwriter’ (DU).
When you apply to have your loan refinanced, Fannie Mae will automatically process your appraisal information through their DU. If the software determines your home’s value is acceptable, you could be good to go without an appraisal.
Have additional questions about what updates were made to the Fannie Mae and Freddie Mac’s rules and regulations? I’d be glad to provide answers, contact me anytime.