Home Affordable Refinance Program or as it is known today as HARP was first introduced in 2009 and was supposed to help responsible homeowners that were current on their mortgage to refinance their underwater homes that were owned by Fannie Mae and Freddie MAC. While the first program was a good start the limitations of the loan to value could not be more then 125% of the current value eliminated most home owners who were severely underwater in Clark County, Nevada.
Introducing HARP 2.0
HARP 2.0 is designed to eliminate the barriers that limited the original program's success.
No more LTV restrictions. The 125% loan-to-value limit has been eliminated under HARP 2.0 for borrowers who have fixed-rate mortgages.
No more 'Big 4' bank requirement.HARP 2.0 is open to all participating mortgage lenders. Borrowers can now use the mortgage professional of their choice for HARP refinances.
No more Owner Occupant requirement. HARP 2.0 is available to all homeowners, not just Owner Occupants. Second homes, investors, and people that have relocated can now take advantage of today’s low rates.
Reduced refinance fees. Whereas refinance charges could easily climb to 2% of the loan amount under HARP, the fees are reduced to 0% on loans for 20 years or fewer, and 0.75% for mortgages for more than 20 years and for ARMs under HARP 2.0.
The elimination of the loan-to-value limit might be the biggest change under HARP 2.0, but it isn't the only change. Here is a rundown of HARP 2.0's eligibility guidelines, courtesy of the FHFA:
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. Both Fannie Maeand Freddie Mac have provided online lookup tools to determine if a loan is owned by either institution.
The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
The current loan-to-value (LTV) ratio must be greater than 80%.
The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.