4301.2: General requirements for all refinance Mortgages (06/15/16)

For all refinance Mortgages:

The refinance Mortgage must comply with Section 4203.4
When an existing Mortgage will be satisfied as a result of a refinance transaction, one of the following requirements must be met:
- At least one Borrower on the refinance Mortgage was a Borrower on the Mortgage being refinanced; or
- At least one Borrower on the refinance Mortgage held title to and resided in the Mortgaged Premises as a Primary Residence for the most recent 12-month period and the Mortgage file contains documentation evidencing that the Borrower, either:
  - Has been making timely Mortgage payments, including the payments for any secondary financing, for the most recent 12-month period; or
  - Is a Related Person to a Borrower on the Mortgage being refinanced; or
- At least one Borrower on the refinance Mortgage inherited or was legally awarded the Mortgaged Premises (for example), in the case of divorce, separation or dissolution of a domestic partnership)

A Living Trust may be made irrevocable by a Settlor's death. To be an eligible Borrower at the time of the refinance transaction, the Borrower must continue to be a Living Trust that meets Freddie Mac's revocability and, as applicable, other eligibility requirements.

In addition, a refinance Mortgage that exceeds the thresholds under the Home Ownership and Equity Protection Act of 1994 and its implementing regulations is ineligible for purchase by Freddie Mac.

See Section 6302.16 for delivery and pooling requirements for refinance Mortgages sold to Freddie Mac.