Complete Home Affordable Refinance Program (HARP and HARP 2.0) Guidelines and Qualifications
The Home Affordable Refinance Program (HARP) was created to help underwater homeowners whose loans were guaranteed be Fannie Mae or Freddie Mac to be able to refinance at today’s current low interest
rates. This loan program is also known as the Obama Refinance Program and the Underwater Homeowners Refinance Program.
The Ten Guidelines that must be met in order for a home owner to be eligible to refinance under the HARP 2.0 Program:
- The home owners current mortgage must have been purchase or guaranteed by Fannie Mae or Freddie Mac before June 1, 2009.
- The existing home mortgage cannot have been previously refinanced using the HARP Program.
- The mortgage cannot have had a late payment over the last six months and only one 30 day late payment is allowed over the last 12 months.
- The newly refinanced HARP mortgage must provide a ’benefit’ to the home owner that includes: a lower interest rate, a lower payment and interest rate, a shorter mortgage term (15 yr. vs. 30 yr.), or a change from an interest only or adjustable rate loan to a fixed rate loan.
- Credit and income verification are not needed as long as the new HARP mortgage payment is not greater than 20% more than the current mortgage loan payment.
5A. If the new HARP loan payment is over 20% greater than the existing mortgage payment, then income and credit info and verification will become more important and the home owners debt to income ratio cannot exceed 45%.
- The mortgage holder will still need to provide employment verification.
- All type of property are eligible to be refinanced under HARP: condos, townhomes, single family homes, even attached multi family between 1-4 units.
- Both owner occupied and investment properties are qualified to refinance using HARP.
- Properties with first and second mortgage can qualify, however, the 2nd mortgage will need to agree to re-subordinate to the new 1st position HARP mortgage.
9A. For 1st and 2nd mortgage refinances, the new HARP mortgage cannot exceed 125% LTV and the second mortgage cannot be refinanced into the new first HARP mortgage.
- 10. The new HARP mortgage loan will have to meet the conforming loan limits for that area. Currently that is $625,000 for most areas of the country. Your local limit may vary.
- HARP is now extended through 2015
Summary of the major changes from the first HARP to the HARP 2.0 Program:
- No underwater limits.
- Borrowers will now be able to refinance regardless of how far their homes have fallen in value. Previous loan-to-value limits were set at 125 percent.
- Eliminating appraisals and underwriting
- Most homeowners will not have to get an appraisal or have their loan underwritten, making their refinance process smoother and faster.
- Modified fees
- Certain risk-based fees for borrowers who refi intoshorter-term loans will either be eliminated or modified.
- Extended deadline
Underwater homeowners who are feverishly looking for ways to refinance their home now have the opportunity to do this through the HARP Mortgage program. The first step in determining eligibility is to see whether or not your loan is owned by Fannie Mae or Freddie Mac. You can check on our site or go directly to Fannie and Freddie’s website. Like many things in life, these databases are not perfect. You may checked your property address against Fannie Mae and Freddie Mac’s databases, and were unable to find a match.
Could use use more money every month for anything? Of course, you could. It’s a a rhetorical question
for most people in this country. While it’s not meant to be cheezy or insulting, the question is really posed to help you take action with your families financial well being and save money on your home mortgage. There are a couple very, very good government sponsored mortgage refinance programs available right now to homeowners that despite heavy publicity as still not being taken advantage of by many people who can benefit from them simply because they are not aware that they existed.