Low-Income Refinance Program
Closing cost assistance for greater affordability
As a homeowner, you’ve likely considered if refinancing is worth it. A lower mortgage rate can give you big savings on your monthly mortgage payment — but what about closing costs?
A low-income refinance (LIR) program can help.
As part of its mission established by the Federal Housing Finance Agency (FHFA) to increase opportunities for affordable homeownership, this LIR program provides low-to-moderate income borrowers with $2,500 in closing cost assistance to obtain the benefits of a refinance.
Refinancing through the LIR program is a smart option designed for homeowners like you to keep more money in your pocket.
Program advantages
The LIR program makes refinancing a more affordable option for low-to-moderate-income borrowers. Some homeowners who could currently benefit from refinancing to a lower rate or reduced mortgage term simply don’t do it because of the initial barrier of closing costs. An LIR addresses that with $2,500 in closing cost assistance.
But how can you win with an LIR? Let’s explore two examples.
First, let’s say you can refinance and reduce your mortgage rate by .50%. That would decrease your monthly mortgage payment by a considerable amount. Plus, with an LIR, you can get $2,500 toward closing costs, maximizing your savings even more.
Second, maybe you aren’t worried about your rate but would like to pay off your mortgage sooner. If a refinance would lower your mortgage terms by 5 years and the new home loan would have a term of less than 15 years, you can start saving now with an LIR and plan to live without a mortgage payment a few years sooner!
Low-income refinance eligibility
Eligible loans
LIR loans must meet the following criteria:
- Income must be ≤80% of the area median income (AMI)
- Existing home loan must be at least six full months from the first payment due date
- One-unit primary residences only
- No current delinquency
Target markets
To qualify for this LIR program, you must live in one of the following metropolitan
- Atlanta-Sandy Springs-Alpharetta, GA
- Baltimore-Columbia-Towson, MD
- Charlotte-Concord-Gastonia, NC-SC
- Chicago-Naperville-Elgin, IL-IN-WI
- Cincinnati, OH-KY-IN
- Cleveland-Elyria, OH
- Columbus, OH
- Dallas-Fort Worth-Arlington, TX
- Detroit-Warren-Dearborn, MI
- Houston-The Woodlands-Sugar Land, TX
- Indianapolis-Carmel-Anderson, IN
- Kansas City, MO-KS
- Miami-Fort Lauderdale-Pompano Beach, FL
- Minneapolis-St. Paul-Bloomington, MN-WI
- New York-Newark-Jersey City, NY-NJ-PA
- Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
- Phoenix-Mesa-Chandler, AZ
- Pittsburgh, PA
- Louis, MO-IL
- Washington-Arlington-Alexandria, DC-VA-MD-WV
Borrower benefit
Net tangible benefits required to refinance are:
- Interest rate reduced by at least .50% and a reduction in monthly principal and interest payments
- Remaining term of the existing mortgage is reduced by at least 5 years with a new term of no more than 15 years
Home education counseling
1:1 counseling by a HUD-certified counselor is not required. However, it can be included if desired.