First announced in March 2009, HARP (Home Affordable Refinance Program) was a federal program designed to help underwater or near-underwater homeowners refinance into a fixed loan with a lower monthly payment. Initial projections of making 5 million homeowners eligible for refinancing fell far short – as of the end of August 2011, only 894,000 borrowers have refinanced through HARP. In October 2011 a revamped program referred to as HARP 2.0 was announced with the intent of reaching more underwater homeowners.
One of the major issues with the original HARP program was that it was limited to homeowners who had a mortgage with a LTV (Loan To Value) ratio between 80 and 125 percent. The new version of the program will allow homeowners to refinance regardless of how far their homes have fallen in value.
The program is not intended to reach out to borrowers who have fallen behind in their mortgage obligations – eligible participants must be up to date with their payments. It is intended to provide some relief to homeowners whose loans were originated prior to May 31, 2009. Rates have fallen dramatically since that point, and the opportunity to save a substantial amount on monthly mortgage payments is possible.
Key Eligibility Guidelines:
– Mortgage must be owned or guaranteed by either Fannie Mae or Freddie Mac
Check your Fannie Mae eligibility or Freddie Mac eligibility
– Payments on mortgage loan must be current
– No late mortgage payments in the last 12 months
– Property can not have been refinanced before under HARP
– Loan origination must be prior to May 31, 2009
– Loan must meet conforming limits for the area where the property is located
– Loan To Value (LTV) ratio must be greater than 80%
If you are unable to obtain traditional home refinancing, and you up to date with your payments, perhaps refinancing under HARP 2.0 could improve your cash flow.
Clients of mine who was unsuccessful in their attempt to refinance under the original HARP program, they did so successfully in December under the new program, and are saving $500/month with a new payment.
Wallingford Real Estate – Wallingford, PA 19086
