The Federal Housing Finance Agency on Wednesday announced a new refinance option for certain low-income borrowers, helping them take advantage of low interest rates and save money each month.

"Last year saw a spike in refinances, but more than 2 million low-income families did not take advantage of the record low mortgage rates by refinancing," said FHFA Director Mark Calabria. "This new refinance option is designed to help eligible borrowers who have not already refinanced save between $1,200 and $3,000 a year on their mortgage payment."

To qualify, borrowers must have a Fannie Mae or Freddie Mac backed loan, for a single family home that they reside in. Their income must be at or below 80% of the median income for their area. And their loan needs to be in generally good standing — with no missed a payment in the past six months and no more than one missed payment in the past 12 months.

While there are other requirements for the credit profile, it is designed to ease the process to allow more borrowers qualify. The cost and credit requirements can keep some lower-income borrowers from seeking refinancing. This new option will ease some of the cost, such as a credit worth up to $500 for an appraisal.

FHFA, which oversees Fannie and Freddie, estimates the refinancing option could save borrowers an average of $100 to $250 a month. The new refinance option will be available to eligible borrowers beginning this summer.