Fannie Mae plans to loosen its refinance rules under a program called DU Refi Plus, Bloomberg News reports, citing a notice that the government-sponsored enterprise sent to lenders. Some credit requirements will be dropped, income documentation standards will be reduced and appraisals in certain situations will be waived.
Fannie Mae will require only one current pay stub for income documentation. Also, credit score requirements will lowered in order to allow borrowers with scores below the 580 minimum to qualify for a refinanced loan that carries an 80% loan-to-value ratio.
Bloomberg News reports that Fannie Mae will likely use automated valuation models before offering to waive appraisals. The DU Refi Plus program will begin April 4.
SOURCE: Bloomberg News