The Skinny on the New HARP Refinance Program
My colleague Melissa Zavala has shared this excellent summary of the important new developments in the HARP program.
These changes create a great opportunity for borrowers to take advantage of the historically low interest rates now available.
The HARP (Home Affordable Refiance Program) will be modified soon, government officials say. Many more homeowners will be eligible for the program. Here's what you need to know about these modifications:
HARP General Information
The Home Affordable Refinance Program (HARP) is a government mortgage program, first introduced in 2009 as a means to help underwater homeowners.
HARP allows “underwater” homeowners to refinance their homes, but there are many criteria necessary to qualify. HARP is for mortgages secured by Fannie Mae and Freddie Mac only.
The Treasury Modifies HARP
When HARP was first launched in 2009, the government said that the program would help millions of otherwise-ineligible U.S. households to obtain a refinance of their mortgage. Unfortunately, only 838,000 homeowners have used the HARP program. As a result, HARP has been accused of missing the mark.
On October 24, 2011, there was a major announcement made about changes to the HARP program. The biggest change is that some homeowners who are significantly underwater can now qualify for the program.
Here are some answers to commonly asked questions about the new revamped HARP program (HARP 2.0):
What Is HARP?
HARP was started in April 2009. The government calls it Home Affordable Refinance Program.
In order to be eligible for the HARP refinance program:
- Fannie Mae or Freddie Mac must back your loan.
- Your current mortgage must have a securitization date prior to June 1, 2009.
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.
How do I know if Fannie Mae or Freddie Mac has my mortgage? Contact the agents at Broadpoint Properties and we can help you to determine whether Fannie Mae or Freddie Mac has your mortgage. You can also use lookup tools on the Fannie Mae and Freddie Mac websites.
If Fannie Mae or Freddie Mac holds my mortgage, am I automatically eligible for the Home Affordable Refinance Program? No. There are a number of criteria. Having your mortgage held by Fannie or Freddie is just the beginning.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage? If neither Fannie nor Freddie has record of your mortgage, you are not eligible for this refinance program.
Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage? No. You must be current on your mortgage to refinance through this program.
Will the Home Affordable Refinance Program help me avoid foreclosure? No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
Is there a loan-to-value restriction for HARP? No, there is no loan-to-value restriction. All homes (regardless of equity) are eligible for the HARP program—just as long as the borrower and the loan meet all of the other criteria.
What's the biggest mortgage I can get with a HARP refinance? HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, in San Diego County, the current confirming loan limit for a single-family home is $546,250.
I am unemployed and without income. Am I HARP-eligible? No. Income verification is required for the HARP refinance program.
While this program will open up opportunities for responsible borrowers who are significantly underwater, it is definitely not a salvation for most of those sellers participating in short sales. So, before you get super excited about your refinance, make sure that you qualify for HARP 2.0.
Photo: flickr creative commons by Pablo Manriquez
Melissa Zavala
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