What Is Refi Possible and Why These Rules Exist
Refi Possible is Freddie Mac's streamlined refinance program designed to help borrowers with limited equity refinance their homes. The program targets homeowners who might not qualify for traditional refinancing due to high loan-to-value ratios but have demonstrated responsible payment behavior.
These eligibility requirements exist because Freddie Mac wants to ensure they're refinancing loans that have performed well. They're essentially asking: "Has this borrower proven they can handle mortgage payments responsibly?" The 12-month seasoning requirement and payment history standards serve as proof of that responsibility.
Your Existing Loan Must Be a Freddie Mac Loan
Your current mortgage must already be owned by Freddie Mac, either in whole or in part, or securitized by them. This means Freddie Mac either bought your loan from your original lender or packaged it into mortgage-backed securities.
Most borrowers don't know who owns their loan. Your monthly payment goes to a servicer, but the actual owner might be different. You can check who owns your loan by calling your current servicer or using Freddie Mac's loan lookup tool on their website.
Say you got your original mortgage from Wells Fargo three years ago. Wells Fargo might have sold that loan to Freddie Mac six months after you closed. Even though you still send payments to Wells Fargo, Freddie Mac owns the loan and you'd be eligible for Refi Possible.
The 12-Month Seasoning Requirement
Your existing mortgage must be at least 12 months old, measured from the original note date to the new note date of your Refi Possible loan. This seasoning period proves you can handle the payment obligations over time.
If you closed on your current mortgage on March 15, 2023, you couldn't apply for Refi Possible until after March 15, 2024. The lender will verify this date using your original loan documents.
This requirement prevents borrowers from immediately refinancing into Refi Possible after getting their initial mortgage. Freddie Mac wants to see a track record of payments before offering this streamlined option.
Loans That Don't Qualify
Certain types of existing mortgages are specifically excluded from Refi Possible. Your current loan cannot be a Freddie Mac Relief Refinance Mortgage, Enhanced Relief Refinance Mortgage, or another Refi Possible mortgage.
These exclusions prevent borrowers from repeatedly using relief programs. If you already used a relief refinance program, Freddie Mac considers that you've already received assistance and shouldn't need another streamlined option.
Your loan also cannot have outstanding repurchase requests or be subject to recourse agreements. These are technical issues that indicate problems with your original loan that need resolution before refinancing.
Payment History Requirements
The payment history standards are strict but clear. You cannot have been 30 days late on your mortgage in the past six months. You can have been 30 days late once in the past 12 months, but not more than once. You cannot have been 60 or more days late at any point in the past 12 months.
These requirements focus on recent payment behavior. A single 30-day late payment 10 months ago won't disqualify you, but two 30-day late payments in the past year will.
Your lender will check your credit report for payment history, but they're also responsible for verifying payments between the last credit report update and your new loan closing. This means they might contact your current servicer directly to confirm recent payments.
COVID-19 Forbearance Exception
If you received COVID-19 mortgage forbearance and properly resolved those missed payments according to Freddie Mac guidelines, those missed payments don't count as delinquencies for Refi Possible eligibility.
This exception recognizes that many responsible borrowers needed temporary payment relief during the pandemic. As long as you followed the proper forbearance resolution process outlined in Freddie Mac Bulletin 2020-17, your payment history remains clean for Refi Possible purposes.
Say you entered forbearance in April 2020 and missed three payments, but you completed a modification in January 2021 that brought your loan current. Those missed payments during forbearance won't prevent you from qualifying for Refi Possible.
What Documents You'll Need
Your lender will need your original loan documents to verify the note date and confirm Freddie Mac ownership. They'll pull your credit report to check payment history and may contact your current servicer for recent payment verification.
If you had COVID-19 forbearance, gather documentation showing how you resolved the missed payments. This might include modification agreements, repayment plans, or correspondence from your servicer confirming the resolution.
You won't need to provide extensive payment history documentation yourself since most of this verification happens between lenders. However, keep records of any recent payments you've made, especially if you're close to the application date.
Common Issues That Cause Problems
The most common disqualifier is recent late payments. Even one 30-day late payment in the past six months eliminates your eligibility. Many borrowers don't realize how strict this requirement is.
Another issue is confusion about loan ownership. Some borrowers assume their loan qualifies because they recognize the Freddie Mac name, but their loan might actually be owned by Fannie Mae or a private investor. Loan ownership isn't always obvious from your monthly statements.
Timing can also create problems. If you're eager to refinance and apply too early, you might not meet the 12-month seasoning requirement. The note dates must be exactly 12 months apart, not just close to 12 months.
Technical issues with your existing loan can surface during the eligibility review. Outstanding quality control issues or documentation problems from your original loan might need resolution before you can proceed with Refi Possible.
References
For the official guidelines, see 4302.3: Eligibility requirements for the Mortgage being refinanced in the Freddie Mac Selling Guide.
Mortgage guidelines change. Stay current.
Fannie Mae and Freddie Mac update their rules several times a year. Get notified when changes affect your mortgage eligibility, required documents, or loan terms.
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Original Freddie Mac Guideline Text
Eligibility requirements for the Mortgage being refinanced under the Refi Possible
®
offering
Topic
Eligibility requirements for Mortgage being refinanced
The Mortgage being refinanced must:
Be a First Lien, conventional Mortgage currently owned by Freddie Mac, in whole or in part, or securitized by Freddie Mac
Be seasoned for at least 12 months (i.e., the Note Date of the Mortgage being refinanced must be at least 12 months prior to the Note Date of the Refi Possible Mortgage)
Ineligible Mortgages
The Mortgage being refinanced must not be:
A Freddie Mac Relief Refinance Mortgage℠
®
A Refi Possible Mortgage
A Mortgage subject to an outstanding repurchase request
A Mortgage subject to recourse, indemnification, or another credit enhancement other than mortgage insurance unless requirements in
Section 4302.6
are met
Payment history
The Mortgage being refinanced must have a payment history that indicates all of the following:
The Mortgage has not been 30 days delinquent in the most recent six months
The Mortgage has not been 30 days delinquent more than once in the most recent 12 months
The Mortgage has not been 60 or more days delinquent in the most recent 12 months
The credit report can be relied on for determination of payment history through the date the Mortgage tradeline was last reported.
The Seller is responsible for the payment history between the date the Mortgage tradeline was last reported and the Note Date. If the Borrower has missed payments due to COVID-19 forbearance and those payments have been resolved according to the temporary eligibility requirements in
Bulletin 2020-17
, those missed payments are not considered delinquencies for the purpose of meeting the payment history requirements.
®
assessment
Loan Product Advisor will assess whether the Mortgage being refinanced complies with the above eligibility requirements with the following exceptions:
The Seller is responsible for ensuring the Mortgage is seasoned at least 12 months as of the Note Date of the Refi Possible Mortgage, and
The Seller must consider the payment history after the date the Mortgage tradeline is last reported on the credit report and through the Note Date when determining whether the payment history requirements have been met
