Fannie Mae Announces Additional Details on the High Loan-to-Value (LTV) Refinance Option

May 22, 2018


In September of last year Fannie Mae released Lender Letter LL-2017-05, which introduced the high loan-to-value (LTV) refinance option. At the direction of the Federal Housing Finance Agency (FHFA), and in conjunction with Freddie Mac, Fannie Mae is providing updates and additional details regarding this option, which is intended to assist Fannie Mae borrowers who are making their mortgage payments on time, but whose LTV ratios exceed the maximum allowed for a standard limited cash-out refinance transaction in the Selling Guide.

Minimum LTV ratios

With today's lender letter and for the high LTV refinance option, Fannie Mae is announcing that it is updating the minimum LTV ratio for a one-unit, principal residence to 97.01%. The previous minimum LTV ratio requirement was 95.01%. This update was made in order to align with Fannie Mae's existing maximum LTV ratio of 97.00% for a limited cash-out refinance of an existing Fannie Mae loan.


With this announcement, Fannie Mae is also providing the loan-level price adjustments (LLPAs) that are applicable to the high LTV refinance option. LLPA caps are applied based on the LTV ratio of the loan being considered for refinance. Additional details are available in Table 6 of the LLPA Matrix.

In conjunction with this announcement, Fannie Mae is updating our high-level comparison of the high LTV refinance option to Fannie Mae's DU Refi Plus and Refi Plus, including HARP. This comparison is not intended to be comprehensive, but to provide a brief overview of the program features for ease of reference. For comprehensive information, please see the related links below.

Related Links:
2018 Lender Letter LL-2018-02  
2017 Lender Letter LL-2017-05  
LLPA Matrix  
Selling Guide