Refi rejected - Fannie Mae won't buy loan! What's up?

6 Replies

We have excellent credit.  Want to refi a single family with existing $32K mortgage that we have owned for 20 years.  Minimum amount bank would refi is $60K for $75K appraisal.  Denied due to "Fannie Mae won't buy the loan".  What's going on??

@Mark Beeson I know that Fannie has a Max loan amounts, and that depends on your zip code, but I haven't heard of a minumum loan amount, and their policy confirms that. But I do know that with very low loan amounts, you can start to run into high cost issues, depends on the state where the property is located. Was this a verbal denial, or a written denial letter?

Fannie Mae - B2-1.5-01, Loan Limits (02/06/2019)

It was verbal.  The lender seemed ok with doing a small minimal loan, but stated they could not sell it or place it with Fannie Mae.  It's concerning as to why Fannie wouldn't do the loan.  Credit in the high 800's and around 800 for RE financing should serve me well - but doesn't seem to in this case.

Originally posted by @Rene Owczarski :

@Mark Beeson I know that Fannie has a Max loan amounts, and that depends on your zip code, but I haven't heard of a minumum loan amount, and their policy confirms that. But I do know that with very low loan amounts, you can start to run into high cost issues, depends on the state where the property is located. Was this a verbal denial, or a written denial letter?

Fannie Mae - B2-1.5-01, Loan Limits (02/06/2019)

I think they call this over lays that the bank can put on these loans. 

 

@Mark Beeson Sounds like you might need to deal with a different bank, if they are giving you such a hard time like this, maybe try a local credit union. And one other thing to keep in mind from the bank's perspective, is that it's just as much work for the loan originator to do a $30k loan vs a $300k loan. But they get paid better on the $300k loan.