Fannie Mae “Making Home Affordable” refi initiative - up to 105% Loan-To-Value

Can closing costs be rolled into the new loan? – Yes, as long as the new first mortgage loan will not exceed 105% of the appraised value.

What about my existing second mortgage? — If there is a second mortgage or Home Equity Line of Credit, it can be subordinated, and remain in place behind the new first mortgage.  Big if here.  IF the 2nd lender will allow the 2nd mortgage to be subordinated.  At the current time, that is unlikely.

What if the combination of the first mortgage, existing second or HELOC, and closing costs [these three together are the Combined Loan-To-Value - “CLTV”] will exceed 105%? – That is OK, there is no cap on the CLTV.   Again, it is currently difficult to get your 2nd lender to agree to the subordination.

What about Mortgage Insurance? – If the loan currently has private mortgage insurance (MI), that MI policy will simply carry through the refi, and will stay in place. If there is no MI on the current loan, then MI is not necessary for the new loan, regardless of the new LTV.

What properties are eligible? – Owner-occupied primary homes (detached and condos).

What payment history is required on the existing mortgage? – One 30-day late payment is allowed.