The great refi boom in 2020 wasn’t exactly equitable. Wealthier borrowers with stable jobs and high credit scores were fortunate enough to lock in a forever rate, typically lowering their monthly mortgage payments by hundreds of dollars. But the lower-income borrowers? They were more likely to be mired in some form of forbearance plan than be given the opportunity to modify their mortgage with a rate below 3%.
On Wednesday, the government threw a bone to the little guy. The Federal House Finance Agency announced that sometime this summer Fannie Mae and Freddie Mac will introduce a new refi product in an attempt to usher these low-income borrowers into what is left of the refi wave. The option is coined as Refi Now at Fannie Mae and Refi Possible at Freddie Mac. Mark Calabria, Director of the FHFA, said nearly two million low-income families may be eligible to save anywhere between $1,200 and $3,000 a year.
But there is skepticism amongst industry stakeholders about how many of those two million families would even meet the requirements of the program.