NEWS HEADLINES

Fannie Mae Rolls Out Refi Plus

By Jerry Ascierto

Fannie Mae has finished developing Refi Plus, a portfolio retention tool that it plans to introduce in the coming days.

The program allows borrowers to lock in rates for the refinance of existing Fannie Mae loans up to two years in advance of the prepayment period end date, in conjunction with supplemental financing.

The company feels the time is perfect for such a product, since acquisition activity has sharply declined over the last six months and more owners are opting to refinance rather than sell.

“If you have two years of yield maintenance remaining, but you like where rates are today and you’re ready to put a supplemental on, we now have a product for that,” said Heidi McKibben, Fannie Mae’s vice president of multifamily production. “This will give borrowers the flexibility to lock in today’s rates if they feel like we’re in a rising interest-rate environment, take out a supplemental, and basically lock up their new loan up to two years out.”

Borrowers using Refi Plus are able to get cash out immediately in the form of a supplemental loan, which is issued at first-mortgage pricing. Borrowers also eliminate uncertainty about future rates since they’re locking in the rate on a forward basis. Additionally, there’s no prepayment premium on the existing loan.