Fannie Mae’s new Student Loan Cash Out Program is a cost-effective alternative to use existing home equity to pay off student loan debt. The program provides the opportunity for borrowers to pay off one or more student loans through the refinance transaction, potentially reducing their monthly debt payments. The loan-level adjustment that applies to cash-out refinance transactions will be waived when all requirements have been met.
- The standard cash-out refinance LTV, CLTV, and HLTV ratios apply per guidelines with cash-out refinance.
- Allows the ability to pay off at least 1 student loan without having the price adjustment that applies on cash out loans.
- At least one student loan must be paid off. Loan proceeds must be paid directly to the student loan servicer at closing.
- Only student loans for which the borrower is personally obligated can be paid through the transaction.
- Partial payoffs are not permitted. The full student loan balance must be paid off.
- Maximum Cash back is capped at 2% or $2,000, whichever is less.
Please contact your Account Executive for complete information.