Freddie allows low-loan-to-value (LTV) homeowners a chance to refinance

posted by Carrie B. Reyes | August 13, 2012 | In Real Estate Newsflash

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Do you have clients who would like to take advantage of today’s low interest rates by refinancing, but are unable to since they have more than 20% equity in their home? Good news! If their mortgage is owned by Freddie Mac, they may be in luck.

Freddie Mac has announced its plan to remove loan-to-value ratio (LTV) restrictions for Freddie Mac-owned or guaranteed mortgages under the Home Affordable Refinance Program (HARP 2.0) and Freddie’s Relief Refinance programs. These programs currently disqualify homeowners with LTV ratios below 80%.

Earlier this year, HARP 2.0 removed its LTV ceiling, allowing homeowners with LTVs above 125% to qualify. Together with this announced change, mortgages owned by Freddie Mac can qualify for HARP 2.0 regardless of their LTV, the ceiling and floor being stripped away.

The removal of the 80% LTV restriction will be effective January 1, 2013 and officially announced in September.

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