Fannie Mae and Freddie Mac will offer new refinancing options in 2018, the two largest mortgage servicers announced Monday.
In a statement, the mortgage companies said that Fannie and Freddie will offer a new mortgage refinancing option, called a Fannie/Freddie Home Equity Line of Credit (FHLOC), which will allow borrowers to refinance at the lowest rate possible with up to $500,000 of the borrower’s equity.
Fannie will offer this option to borrowers who qualify, and Freddie is currently offering this option for borrowers who have been in arrears for five years.
The new refinanced loans will allow for a loan modification and the option of paying a lower interest rate.
The FHLOC is the second of two refinancing opportunities that the two lenders announced Monday, following the announcement of an expansion of the Fannie Home Mortgage Program.
The expansion is intended to help low-income homeowners with outstanding loans with low interest rates, but it also provides borrowers with access to refinancing tools like the FHL.
Fannie Mae said that borrowers who are not eligible for the new refinances can still refinance on their existing loans at the same rates.
The new options will be available to borrowers on existing Fannie or Freddie mortgage loans, but they will not be available for newly-borrowed Fannie loans, which were created to help struggling homeowners refinance their mortgages after the financial crisis.