You may be asking yourself – what is a HARP loan? Can I benefit from a HARP Loan? What does HARP even mean? Am I even eligible for a loan? When does this so-called HARP loan program start?
Well for one, HARP is an acronym for Home Affordable Refinance Program. The HARP program was originally a program that was designed for homeowners with loans serviced by Fannie Mae and Freddie Mac (this means that Fannie Mae or Freddie Mac owns the loan on your home) that would allow a homeowner to refinance with no mortgage insurance, and with loans that were “underwater”, or, loans that had a higher balance than the value of the home. Traditionally, if you loan has a value higher than what your actual home is worth, you cannot refinance the loan. HARP is a way around this.
The first “HARP” fell short in a couple areas, because income still was heavily scrutinized, and there was a 125% cap on the loan to value. In other words, you couldn’t owe more than 125% of what the value of the home was if you wanted to refinance. The Obama Administration revamped this program and removed the LTV cap of 125% and starting in March 2012, you can refinance your home – even if your LTV is more than 125%!
Currently, there is another option in the works that is called HARP 2.0. HARP 2.0 is an amendment to the first HARP program that will allow borrowers to refinance to lower interest rates with heavily reduced income documentation, and zero limits for value, therefore appraisals might not be needed.
In a nutshell, if you are a homeowner with a Fannie Mae or Freddie Mac owned home, and you have no mortgage lates in the last 6 months (no more than 1 late in the past 12 months) you can refinance down to the 4% range on a 30 year fixed, using potentially no appraisal, and reduced to no income documentation. For more information, click on the Apply Now icon below to see if you’re eligible.