The Federal Housing Finance Agency (FHFA) today announced two measures to sustainably advance the affordability of homeownership for mortgage borrowers across the nation, especially those in underserved communities.
First, over the coming months, Fannie Mae and Freddie Mac (the Enterprises) will expand certain eligibility requirements for their RefiNow and Refi Possible refinance programs aimed at assisting low-income borrowers. Additionally, the Enterprises will be incorporating desktop appraisals into their selling guides for new purchase loans.
When the Enterprises established their RefiNow and Refi Possible programs for low-income borrowers, area median income (AMI) requirements were limited to borrowers with current income at or below 80%. The announcement today expands the income threshold to include some moderate-income borrowers, with incomes at or below 100% percent of area median income. In addition, the Enterprises are modifying other requirements to address certain operational frictions for lenders.
Second, both Enterprises will incorporate desktop appraisals into their Selling Guides for many new purchase loans starting in early 2022. The use of desktop appraisals by the Enterprises was one of several temporary flexibilities initiated last year in response to the COVID-19 pandemic.