Freddie Mac plans to allow borrowers with loan-to-value ratios under the 80% mark the same entry requirements for the government-sponsored enterprise's Relief Refinance Mortgage and Home Affordable Refinance Programs.
The change also applies to HARP 2.0, the latest evolution of the HARP program designed to refinance underwater borrowers.
Freddie plans to expand HARP and its Relief Refinance programs by tweaking the guidelines so mortgages with LTV ratios of 80% or under have the same entry requirements as loans with LTV scores of 80% or above.
Prior to the change, borrowers hoping to refinance under HARP 2.0 or the Relief Refinance programs were required to have LTV ratios of 80% or greater to qualify.
"Once implemented, the changes will give lenders a new measure of certainty and ease when they help borrowers with Freddie Mac owned or guaranteed mortgages take advantage of today's historically low mortgage rates," said Paul Mullings, senior vice president and interim head of single family at Freddie Mac.
"This will help us build on the success of the HARP 2.0 and Relief Refinance Mortgage programs of helping more than 1.3 million Freddie Mac borrowers."
The changes will be announced to lenders by mid-September so financial firms can begin accepting applications on loans to be delivered as early as Jan. 1, 2013.
Freddie also is reevaluating the borrower eligibility requirements for its Relief Refinance-Open Access offering. Loans that qualify for Open Access can apply for the GSE to refinance their mortgages through lenders other than their current servicers, Freddie said. Right now, Freddie Mac is brainstorming the best approach to enhance the program's reach to borrowers while helping lenders with capacity.
All of the planned changes are the result of lender feedback on HARP 2.0 and other Freddie refinancing programs.