The Federal Housing Finance Agency (FHFA) today announced modifications to the streamlined refinance program for borrowers with high loan-to-value (LTV) ratios. On August 25, 2016, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) would implement a High LTV Streamlined Refinance program to provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance because their loans have LTV ratios that exceed the Enterprises’ maximum limits.
The program announced today establishes an eligibility date which makes the program available for loans originated on or after October 1, 2017. The eligibility date was necessary to preserve the objectives of the Enterprises’ credit risk transfer (CRT) program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017. The Enterprises will modify the structure of future CRT transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid. This will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.
The changes made to the High LTV Streamlined Refinance program appropriately balance continuing to offer assistance to underwater borrowers with protecting taxpayers.
HARP Extended Through 2018
To ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option, FHFA is also directing the Enterprises to extend HARP through December 31, 2018. HARP continues to be one of the most successful crisis-era programs through which more than 3.4 million homeowners have refinanced their mortgages. More than 143,000 homeowners could still benefit from refinancing through HARP. Visit HARP.gov and follow @FHFA on Twitter, LinkedIn and YouTube for more information.
For further details on the High LTV Streamlined Refinance program, view the following fact sheets: