The Obama administration announced Wednesday an increase in the maximum loan-to-value ratio for mortgages under its Home Affordable Refinance Program by 20 percentage points, to 125%.
The program, unveiled in February, is designed to offer relief to borrowers who are underwater or have little equity in their homes by allowing them to qualify for refinancings at current mortgage rates. It encompasses loans owned or guaranteed by Fannie Mae and Freddie Mac.
In a news release, Fannie CEO Michael Williams said, "By broadening the scope of the initiative, more borrowers will experience savings on their monthly mortgage payments and have a better chance of sustaining homeownership over the long term."
