The Making Home Affordable program announced by the Department of the Treasury on March 4, 2009, includes a new initiative – Home Affordable Refinance – to provide refinance opportunities to borrowers with mortgages held or guaranteed by Fannie Mae.  This initiative is for borrowers who have demonstrated an acceptable payment history on their mortgage but due to a decline in home prices or where mortgage insurance (MI) is not available, have been unable to refinance to obtain a lower payment or move to a more stable product. The Federal Housing  Finance Agency (FHFA) has also provided greater flexibility to Fannie Mae to implement this refinance initiative. 

Fannie Mae is announcing new refinance options to achieve the goals set out for this initiative and to incorporate additional flexibilities provided by FHFA.  Importantly, the maximum loanto-value (LTV) ratio for refinance mortgage loans under this initiative will be expanded to 105 percent, and MI requirements  will be significantly relaxed  to assist borrowers who have experienced home price declines. This Announcement provides the details of the eligibility, pricing, and delivery requirements established to assist borrowers in refinancing into new loans with lower monthly payments or more sustainable mortgages in accordance with the Plan and FHFA’s guidance.