At the present, over 20% of American homeowners feel that their home’s value is actually lower than the balance of their mortgage. Thankfully, a program has been designed to help these people that are “under water” on their mortgage. The HARP (Home Affordable Refinance Program) was introduced by the Federal Housing Finance Agency in an effort to help homeowners stay in their home and avoid a costly loss.
Basis of HARP
This refinance program was offered as a way to assist homeowners in refinancing at the historically low mortgage rates that began to emerge in 2009 through 2012. The program is intended only for people that owe more on the loan than the home’s current value. Here are some of the criteria of the loan.
- Allows homeowners to refinance in order to obtain lower payments through a lower interest rate.
- Eliminates the existing ceiling of 125% loan to value currently used by Freddie Mac and Fannie Mae guidelines.
- Allows for certain fees common to refinances to be waived in order to lower costs for the homeowner.
- Program is valid until December 31, 2013.
- If Freddie Mac and Fannie Mae have provided an estimated automated valuation model for the home then a new appraisal is not necessary.
There are some very specific rules for determining who is able to refinance via HARP. Here are the basic guidelines:
- At the time of the mortgage your most recent 6 home payments must have been paid on time. In addition, there can be only one past due mortgage payment within the most recent 12 month period.
- The current home loan must be a Fannie Mae or Freddie Mac conventional loan
- Only home loans sold to Freddie Mac or Fannie Mae prior to May 31, 2009 will be allowed
- Only one HARP refinance is allowed: EXCEPTION: if you refinance a home loan using the HARP program during the months of March, April and May of the year 2009 then you may be eligible to refinance again.
If you have a conventional mortgage and you feel your property value has plummeted below the balance on the mortgage then this could be a great way to lower your payments and free up some money to pay towards other debt.
For additional HARP refinance information, please visit our HARP page!