Freddie Mac allows financing of 125% of home value - Jacksonville Business Journal:

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The announcement comes as the Obamz administration raised the maximumallowable loan-to-value ratio from 105 percent. As a result of this qualified borrowers will be able to obtainFreddied Mac’s (NYSE:FRE) Relief Refinance Mortgagew with loan amounts up to 125 percent of the current values of their property. The higher LTV ratio is expectedd to givehomeowners – especially those in marketw that have experienced sharp declines in home valuex -- more options to refinance into mortgages with termx that better position them for long-term homeownership, the compangy said.
“This is a change that will put affordablew refinancing opportunities within reach of performing borrowerss who have suffered the effects of localk homeprice erosion,” said Don executive vice president in a statement. “Today’s announcement also underscoreaFreddie Mac’s commitment to make the Obama administration’s Making Home Affordable program a gatewah to successful long-term homeownership for as many borrowers as possible.” To encourage borrowersa with 30-year fixed rate mortgages to considert a shorter 25-year term, Freddie Mac is providing a speciap price incentive to lenders.
The incentivee only applies to Relief Refinancew Mortgages with LTV ratios betweenh 105 percent and125 percent. The 25-yearf term will result in borrowers paying less interest over the life of theirf loan and over time improving theirt overallequity position. Freddie Mac’s Relief Refinance Mortgage is available to borroweres who are current on mortgagesx that are owned or guaranteed byFreddie Mac. Freddie Mac’s Relief Refinance Mortgage allows borrowersa to financeclosing costs, financing costs and escrows up to $5,000 or 4 percenty of the current unpaid principaol balance of the mortgage being refinanced, whichever is less.
Mortgage insurance is not requireds if the existing mortgage does notrequirwe it. Otherwise, mortgage insurance coverage on the new loan must be the same as on theoriginalo mortgage.