HARP 2.0: Same Low Mortgage Rates with Unlimited Loan to Values
The Government has announced a second version to it’s Home Affordable Refinance Plan (HARP 2.0).Although the initial HARP program helped some, it’s reach was much less than was originally expected.Loan Level Price Adjustments (LLPAs) implemented by Fannie Mae and Freddie Mac made refinancing underwater homeowners challenging.The original HARP was released in 2009 but failed to reach enough home owners due to high borrower costs associated with loan level price adjustments and an increased layer of risk for banks.HARP’s intention was to allow homeowners to refinance at current mortgage rates that may have negative equity.
It is estimated than more than 1 in 4 homeowners (over 14 million) are currently underwater.The release of HARP 2 is good news and will remove some of the obstacles associated with the first program.Millions of homeowners will now become eligible to refinance at historical low interest rates and with less hurdles than the previous program.
HARP 2.0 Highlights
- Unlimited Loan to Value / Combined Loan to Value
- Appraisals Waived or only needed in rare cases
- Expanded participation for loans that currently have private mortgage insurance
- Loan Level Price Adjustments for HARP loans drastically reduced, and in most cases eliminated
- The 7 Year “waiting period” after a foreclosure or bankruptcy has been waived in full
Rules for Qualifying
- Your loan must be owned by Fannie Mae and Freddie Mac
- Use the tools below to see if your home is owned by Fannie/Freddie
- The mortgage must have been securitized or delivered to Fannie Mae or Freddie Mac on or before May 31st, 2009.If you bought your home after this date or refinanced since then, you are HARP-ineligible
- Strong payment history on mortgage is required.On time payments for the past 6 months and no more than 1 30 day late in the last 12 months.
The new version of HARP 2.0 is expected to begin March 15th, 2012.Eligible homeowners can expect low mortgage rates and unlimited loan to values.