Freddie Mac’s Open Access

Both Fannie Mae and Freddie Mac have special refinance programs available to consumers that have Fannie or Freddie mortgages.   These programs were designed to help those that want to refinance their mortgages, but their home values have decreased. 

Open Access allows you to refinance your home if:

• If your loan was sold to Freddie Mac originally
• If your loan doesn't have mortgage insurance right now
• If you don't owe over 105-125% of what the house is worth today – not what you paid for it
• If the loan is a rate/term refinance, not a cash out
• Then you can probably take advantage of the Freddie Mac Open Access program.

This has been going on for several months now, but with Freddie Mac until now, you had to use the lender that wrote your loan.  For example if you had a loan that was bought by Bank of America, you had to work with Bank of Amercia, now you can work with any lender that is approved to do the Freddie Mac Open Access program.

Fannie Mae has allowed this from the beginning.  Fannie's rules are basically the same as Freddie's and their program is called DU refi plus.  If your loan is with a different bank, some banks are requiring a value of not more than 95%.  The best part of that is if you qualify for the loan and you are not currently paying mortgage insurance, when you refinance you will not have MI on the new loan. 

If you currently have mortgage insurance, it is more difficult to almost impossible.  You must still keep mortgage insurance on your loan and it has to be transferred in accordance with the MI providers transfer policies.  Standard MI is not allowed.  Many lenders are only doing these loans if the borrower currently does not have mortgage insurance.

To find out if you have a loan that will qualify for these programs, you need to contact a lender that is approved to do these loans.  If you aren't sure if your current mortgage is a Fannie or Freddie loan, you can go to their websites and put in your address.   Fannie Mae is www.fanniemae.com and Freddie Mac is www.freddiemac.com.  Both sites have spots for you to put in your address and it will tell you if your loan is owned by that company.

As long as your house appraises for 105% or more of your current mortgage, you should be able to refinance with these programs – as long as you qualifywithin income and credit guidelines.  Both Freddie and Fannie allow for up to 125%, but most lenders are capping the program at 105%.  So if you bought your home for $200,000 and have a mortgage of $160,000; the appraisal would have to be at least $168,000 for you to refinance with these programs.

Leslie Vanderwerf, Advisors Mortgage - Email – Website