FMERR 2026 guidelines and eligibility: The Freddie Mac Enhanced Relief Refinance Program

What is FMERR?

The Freddie Mac Enhanced Relief Refinance (FMERR) is a mortgage relief program. It was created to help homeowners with little or no equity refinance into a lower interest rate and monthly payment.

Fortunately, home values have been rising rapidly across the nation. And the number of homeowners with underwater mortgages has been steadily decreasing.

As a result, many homeowners are refinance eligible and simply don’t know it yet. If you need a lower interest rate and cheaper monthly payment, it’s worth checking your eligibility to refinance at today’s low rates.

In this article (Skip to…)

• The Enhanced Relief Refinance program
• Refinancing with high LTV
• FMERR requirements
• LTV minimums
• Net tangible benefit
• Payment history
• Alternative refi options
• FMERR FAQ

The Enhanced Relief Refinance program

Freddie Mac’s Enhanced Relief Refinance program was created to help borrowers with very little equity refinance into a lower rate and monthly payment.

Typically, homeowners need a certain amount of home equity to qualify for a refinance. You build equity as you pay down your mortgage and as the home’s value increases.

Those equity requirements can be an issue when home values are stagnant or falling.

If you made a small down payment, or your home’s value has fallen since you purchased it, you might not have enough equity to meet a lender’s minimum requirement for refinancing.

Luckily, very few homeowners find themselves in this position today.

The housing market is running so hot that real estate values have been rising in almost every part of the country. And the number of homeowners with high-LTV loans is shrinking as a result.

Therefore, if you want to refinance into a lower rate, it’s worth checking your eligibility with a lender.

There’s a good chance your home’s value has increased more than you know. And you might qualify for a refinance — even without using a special program like FMERR.

You can start your eligibility check right here.

Editor’s note: Freddie Mac has temporarily paused the FMERR program due to a low number of applicants. With home equity increasing nationwide, many owners are eligible to refinance without needing a special program like FMERR. Contact a lender to check your equity levels and find out whether you qualify for a refinance.

FMERR lets you refinance with a high loan-to-value

Under the Freddie Mac Enhanced Relief Refinance, you can refinance your home loan at current interest rates if you have little to no equity. So if you don’t qualify for standard mortgage refinance programs, lower rates are still an option for you.

With the FMERR option, you can refinance even if the property is underwater, meaning the value of the home is lower than the outstanding debt.

That’s right. If your home is worth $300,000 and you owe $310,000, you can still refinance with FMERR if you meet other guidelines.

Most conventional loan programs are notoriously conservative about loan-to-value ratios (LTVs). But Freddie Mac eliminates LTV maximums for this loan type.

For instance, say your home is worth $100,000 and you owe $120,000. You could get a new mortgage that covers the full amount owed even though it would have a 120% loan-to-value.

Who qualifies for the FMERR program?

FMERR was rolled out as an initiative to help underwater homeowners. It can be a big money saver — but only recent borrowers qualify. Several requirements for borrowers to get a Freddie Mac Enhanced Relief Refinance must be met.

Eligibility guidelines are as follows.

1. Your current mortgage must be owned by Freddie Mac. You can find out if it is using Freddie’s loan lookup tool
2. Your loan-to-value is at least 97.01% for a one-unit, owner-occupied residence
3. Your current loan must be fairly recent. It has to have been originated on or after November 1, 2018
4. Your current financing must be “seasoned” at least 15 months. That means the date your current loan was originated and the date of the new loan must be at least 15 months apart
5. You must have no 30-day late payments in the past 6 months, and no more than one in the past 12 months

Let’s say you purchased a home and closed on November 15, 2018. You have a $250,000 loan, but the home is worth $240,000. You’d like to refinance because rates have dropped.

Despite having little or no home equity, you might be eligible for the FMERR program.

Loan-to-value ratio minimums / maximums

Unlike most loan programs, the FMERR loan comes with minimum LTV requirements. In other words, you can’t have too much equity or you won’t qualify.

Minimum LTVs are as follows.

• Primary residence
  • 1-unit (including manufactured homes): 97.01% LTV
  • 2-unit: 85.01%
  • 3-4 unit: 80.01%
• Second home
  • 1-unit: 90.01%
• Investment property
  • 1-unit: 85.01%
  • 2-4 unit: 75.01%

Keep in mind that these are LTV minimums, not maximums. There is no max LTV if you have a fixed-rate mortgage now.

If you currently have an adjustable-rate loan such as a 5/1 ARM or 7/1 ARM, there is a maximum LTV of 105% to qualify for a refinance. According to Freddie Mac, this is because of “special disclosure and reporting requirements” involved with refinancing a high-LTV ARM.

This program is truly unique: you have to have very little equity to qualify.

The refinance must have a ‘net tangible benefit’

There’s no sense refinancing unless you obtain a real and material benefit.

In the case of a Freddie Mac Enhanced Relief Refinance, lenders will want to see one or more improvements in your financial situation. This is known as a ‘net tangible benefit.’

To qualify, your new loan must have one or more of the following:

• A lower interest rate
• A smaller monthly payment
• A changed amortization term (for instance, switching from a 30-year mortgage to a shorter-term loan)
• A switch from an adjustable-rate mortgage to a less risky fixed-rate loan

The goal of a relief refinance is to make your monthly mortgage payments more affordable. But be aware, you could end up paying more in total because refinancing starts your loan over, thus extending the amount of time you’re paying interest.

Payment history and FMERR eligibility

If Freddie Mac is going to buy your mortgage from a lender, it wants to know you have a good payment history. In terms of the Freddie Mac Enhanced Relief Refinance, that means no 30-day delinquencies during the most recent six months, and no more than one 30-day delinquency in the past 12 months.

However, lenders have the right to be more strict and some may not allow any late payments in the last 12 months.

What if Freddie Mac doesn’t own my loan?

Only homeowners whose mortgages are owned by Freddie Mac are eligible for the FMERR program.

If your home loan is owned by Fannie Mae (Freddie Mac’s sister agency) you might be able to use a similar program called the High-LTV Refinance Option or ‘HIRO.’

You can learn more about the HIRO program here.

Many conventional loans not owned by Freddie Mac are owned by Fannie Mae, so it’s worth using Fannie’s loan lookup tool to see if yours is.

But what if your loan is not owned by Fannie or Freddie? What if it’s a government-backed FHA, VA, or USDA loan?

You have options, too. Homeowners with government loans can often use the Streamline Refinance. This low-doc refi program does not require a new home appraisal in most cases.

If your home isn’t appraised, the lender won’t know whether the value has fallen below your current loan amount. So you could be eligible to refinance even if your home’s market value has decreased.

Enhanced Relief Refinance program FAQ

Check your refinance eligibility

Homeowners with very little equity still have options to refinance into today’s low rates.

Check your eligibility today to see if you can refinance into a lower interest rate and more affordable monthly payment.