Maximum Loan Amount for Freddie Mac Relief Refinance Mortgages

NOTE FROM MY INVESTORS:

Determining the Maximum Loan Amount for Freddie Mac Relief Refinance
Mortgages

Correspondent lenders are reminded that Freddie Mac Relief Refinance Mortgages must have the proper maximum loan amount calculated to be eligible for purchase by the majority of mortgage investors.

To assist correspondent lenders, attached is Freddie Mac’s worksheet for Determining the Maximum Loan Amount on Freddie Mac Relief Refinance Mortgages.

For LTV ratios less than or equal to 80%, the proceeds of the Relief Refinance mortgage must be used only to:

  • Pay off the first Mortgage (amount including only the unpaid principal balance and interest accrued through the date the Mortgage being refinanced is paid off).
  • Pay related Closing Costs, Financing Costs and Prepaids/Escrows
  • Disburse cash out to the Borrower (or any other payee) not to exceed 2% of the Relief Refinance Mortgage – Open Access or $2,000, whichever is less
  • Under no circumstances may cash disbursed to the Borrower (or any payee) exceed the maximum permitted.

 

For LTV ratios greater than 80%, the proceeds must be used only to:

  • Pay off the first Mortgage (amount including only the unpaid principal balance and interest accrued through the date the Mortgage being refinanced is paid off).
  • Pay up to the lesser of 4% of the unpaid principal balance or $5,000 in related Closing Costs, Financing Costs and Prepaids/Escrows.
  • Under no circumstances may cash disbursed to the Borrower exceed $250 — The proceeds may not be used to pay off or pay down any subordinate liens.

 

Important: In the event there are remaining proceeds, the loan amount must be reduced or the excess
amount must be applied as a principal curtailment to the new refinanced mortgage at closing. This principal curtailment must be clearly reflected on the HUD-1 Settlement Statement or equivalent  closing statement.

Additional Resources:
Relief Refinance Mortgage – Open Access Fact Sheet [PDF]
Relief Refinance Mortgage FAQs

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