President Obama’s Home Affordable Refinance Program - HARP
The Federal Housing Finance Agency announced big changes to its Home Affordable Refinance Program on October 24th, 2011.
If you’re under water on your mortgage, you may be eligible to refinance your current mortgage with a new low interest mortgage without paying down your principal and without having to pay mortgage insurance.
The complete program guidelines will not be fully released until November 15, 2011 and lenders will start working with this new program around December 1st, 2011. Here are the details of the new Home Affordable Refinance Program (HARP).
HARP was started in April of 2009, and has gone by many names including the Making Home Affordable plan, the Obama Refi plan, and Relief Refinance. The official government name is HARP, which stands for Home Affordable Refinance Program.
In order to be eligible for the HARP program, your loan must be backed by Fannie Mae of Freddie Mac and your current mortgage must have a securitization date prior to June 1, 2009.
Contact us today to prequalify for the HARP program!
HARP FAQ – Frequently Asked Questions about the Home Affordable Refinance Program:
What are the minimum requirements to be HARP-eligible?
Primarily, you must have made your mortgage payment on time for the last 6 months, and at least 11 of the last 12 months. Next, your mortgage must be backed by Freddie Mac or Fannie Mae, and it must have been sold to them PRIOR to June 1, 2009. Finally, you must be new to the HARP program. Only one HARP refinance per mortgage is allowed, so if you own multiple properties, choose wisely.
Is there a 125% loan-to-value restriction for HARP?
No. All homes, regardless of equity, are eligible for the HARP program. There is no LTV, or loan-to-value restriction.
How can I know if Fannie Mae or Freddie Mac backs my mortgage?
Both Fannie and Freddie have websites that can look up your loan to check this. Check Fannie Mae’s site first, because they own more loans. If your loan isn’t listed there, check Freddie Mac’s site. Your loan MUST be on one of these two sites in order for the home to qualify for HARP. If it’s not, you’re automatically disqualified for HARP, but your best option is a short sale, which has many similar benefits.
If my mortgage is owned by Fannie/Freddie, do I instantly qualify for HARP?
No, there are more criteria, but your loan being backed by Fannie/Freddie is a pre-qualifying start.
My mortgage is owned by Fannie/Freddie. What now?
Write down who owns your loan so you don’t forget, and give that information to whomever is handling your HARP refi, so that the information can be passed to your lender.
Am I eligible for HARP if I’m behind on my mortgage?
No. The Home Affordable Refinance Program is designed specifically for homeowners who are current on their mortgages. It’s not designed to stop or postpone foreclosures. If you’ve missed payments, your best option is a short sale, which has many benefits as well.
Will HARP save me from foreclosure?
Unfortunately, no. HARP is specifically designed for homeowners who are current on their mortgages to refinance at current lower mortgage rates. It’s not designed to stop or postpone foreclosures. If you’ve missed payments, your best option is a short sale, which has many benefits as well.
Do I have to use my current mortgage lender for my HARP refinance?
No. You can perform a HARP refinance with the mortgage lender of your choice, but you should be careful to choose someone who is very knowledgeable about the HARP program.
Can I do a cash-out refinance through HARP?
No. Only rate-and-term refinances are allowed through HARP.
Can I refinance an investment or rental income property through HARP?
Yes, as long as all of the eligibility standards are met. Even if the property was once your primary residence, you can refinance the investment property through HARP. If you’re an “accidental landlord” you can do a HARP refinance as well.
Can I refinance a vacation home or secondary home via HARP?
Yes, as long as all of the eligibility standards are met. Even if the property was once your primary residence, you can refinance your vacation home through HARP.
Can I refinance a condominium via HARP?
Yes, as long as all of the eligibility standards are met.
What if I am unemployed? Can I qualify for HARP without income?
Income verification is required for the HARP refinance program, meaning that you will need income to prove that you can afford the new mortgage. It will be very similar to when you submitted for qualification for the mortgage loan to purchase the property originally.
Can I roll my closing costs into my HARP refinance?
Yes, as long as the loan amount doesn’t exceed the local loan limits, your mortgage balance can be increased to closing costs and other closing expenses such as accrued daily interest and escrow reserves.
My original mortgage was a stated income loan. Will I need income verification with a HARP refinance?
Yes. All applicant income is verified with W2’s, paystubs, tax returns, and additional documents as requested by the underwriter. The income verification process is done in the same way as a traditional refinance.
Are there any credit score requirements to qualify for a HARP refinance?
There are no specific credit score requirements within the HARP program, but your credit must qualify you for the mortgage based on traditional underwriting standards.
When does the HARP program expire?
The new refinanced mortgage must close prior to January 1, 2014.