Many homeowners face barriers when refinancing their mortgage, such as high closing costs, insufficient home equity, or strict income requirements. To address these challenges, Fannie Mae (the Federal National Mortgage Association) introduced the RefinanceNow™ program, aimed at making refinancing more accessible for low-income borrowers.
The RefinanceNow™ program offered guaranteed savings by requiring lenders to lower the borrower’s interest rate by at least 0.50% and reduce monthly principal and interest payments by at least $50. It also helped with closing costs by providing lenders with a $500 credit if an appraisal was required, or a similar benefit otherwise.
Eligibility was focused on homeowners with Fannie Mae-backed, conventional loans on one-unit primary residences, who had a household income at or below 100% of the Area Median Income (AMI) for their location. Borrowers needed a clean payment history — no missed payments in the past six months and no more than one in the last 12 months. The program allowed loan-to-value ratios up to 97%, meaning homeowners could refinance with as little as 3% equity. The debt-to-income ratio limit was also flexible, at up to 65%, compared to the usual 43-50% cap.
Compared to traditional refinancing, RefinanceNow™ lowered barriers significantly for low-income homeowners, especially those with limited equity or higher debt-to-income ratios. Unlike standard refinance loans, it guaranteed financial benefits and included appraisal cost assistance.
While the RefinanceNow™ program is no longer accepting applications and officially ended in August 2023 (per the Federal Housing Finance Agency’s announcement), it demonstrated the potential for refinance programs tailored to assist borrowers with unique challenges. Homeowners interested in refinancing today should explore other options such as the FHA Streamline Refinance or a conventional refinance that fits their qualifications. For more on FHA Streamline Refinance, see our FHA Streamline Refinance glossary article.
The program’s legacy underscores the importance of accessible refinance options that help responsible homeowners reduce monthly housing costs and build financial stability.
Sources:
- Fannie Mae RefinanceNow™ Fact Sheet
- FHFA Announces Wind-Down of COVID-Era Refinance Options
- Forbes: RefiNow And Refi Possible: What They Are And How They Work
See also our related articles on Mortgage Refinance and Refinance Closing Costs for further guidance.