The VA home loan program has spread the word on their Interest Rate Reduction Refinance Loan (IRRRL) for years. This loan makes it easy to refinance an existing VA loan at today’s great rates with reduced paperwork. Now, people who have a loan via a Fannie Mae lender can get a similar deal with the DU Refi Plus.
What is Fannie Mae?
Like the VA, Fannie Mae is a loan servicing organization. They create guidelines for loans and allow approved lenders to offer these loans. Fannie Mae does not offer a mortgage loan, but rather oversees the loans that come from banks, credit unions and mortgage companies.
What is the DU Refi Plus?
This is a refinance option that has not been made available up until recent times. It is a great way for people with a conventional loan to refinance to current rates and avoid much of the paperwork that comes with a typical mortgage process.
- It is possible to skip the appraisal
- The streamlined refinance is available to people that have an existing Fannie Mae loan on various properties such as condos, single family homes and co-ops
- People that financed a second home with a Fannie Mae loan can also refinance that loan if the property is a single family home
- Lower credit scores can be accepted if the loan to value on the new mortgage is at 80% or lower
- Unlimited loan to value is possible. For existing subordinate loans, such as a second mortgage or equity line of credit, those loans can remain in place as long as they continue to subordinate to the first mortgage
- It’s possible for people who have a W-2 type employment to only need to prove income with a single paystub from their current job.
- It’s possible for self-employed borrowers to only need to provide a single year of tax returns.
- Homeowners are not required to have a credit score of at least 680 to qualify for an adjustable rate loan. If the loan to value falls below 80%, the credit requirement is waived.
Another appealing point of the DU Refi Plus is that any participating Fannie Mae lender can assist homeowners with this refinance. The homeowner is not forced to return to the lender that helped them with their original mortgage. This offers the flexibility to homeowners to shop around with competing lenders and get the best deal for their situation.