High Credit Score No Longer a Requirement for Freddie Home Refinances

Freddie Mac has eliminated the minimum credit score requirement for borrowers seeking a mortgage refinance from their current mortgage lender, provided the borrower has at least 20% equity in their home.

The change goes into effect for any refinances with a settlement date on or after January 5, 2012. Prior to this enactment, Freddie required a credit score of at least a 620 before allowing such a high-equity refinance to take place.

In October, the Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie to remove barriers to allow more borrowers to take advantage of historically low interest rates through the Home Affordable Refinance Program (HARP).

Since rates on most mortgages began 2012 still below 4%, government-sponsored enterprises (

GSEs) like Fannie and Freddie removed upfront fees, limits on loan-to-value ratios, and certain representation and warranty risk on the old loan file.

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By: Present Value

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