What is a Home Affordable Refinance Program (HARP)?

What is a Home Affordable Refinance Program (HARP)?

Dec 11, 2016 (0) comment

The Home Affordable Refinance Program, also known as HARP is a federal program in United States created to help refinance current mortgages. This was set up by the Federal Housing Finance Agency in March of 2009. The primary objective of this program is to help home owners who are near or underwater. The HARP is designed for homeowners who remain current on their mortgage payments haven’t been able to refinance because they have limited equity, no equity or negative equity in their homes.

The US Housing Bubble Burst created a large problem for home buyers since the property rates were much less when compared to the mortgage loans undertaken by them. This put buyers in genuine jeopardy as the money they owed was more than the value of the asset. The HARP Loan was introduced to help save money for buyers who had Fannie Mae or Freddie Mac loans.

The Home Affordable Refinance Program Has Been Extended!

Good news! Originally, the HARP plan was scheduled to end on the 31st of December, 2016. However, in August 2016, in an attempt to enable more struggling homeowners to take advantage of the Home Affordable Refinance Program, the deadline was extended to the 30th of September, 2017.

HARP Mortgage Loan Requirements

HARP, as a program, is designed to benefit borrowers and reduce their monthly mortgage payments. While there is certainly a good amount of benefits, there are also some loan requirements too, as stated below:

  • The loan must be owned by Fannie Mae or Freddie Mac.
  • The mortgage must be old enough and be secure on or before the 1st of June, 2009.
  • One should be current on their mortgage payments. No more than one late payment in last 12 months. Therefore, a good review of credit reports in necessary prior to application.
  • Current Loan to Value (LTV ratio) ratio must be at least 80 percent No previous financing under HARP

How To Apply for a HARP Refinance?

  • Check whether your mortgage is Fannie Mae or Freddie Mac approved.
  • Ensure your documents are filed correctly.
  • Ensure you meet the qualifications.
  • Contact your HARP approved mortgage lender for further procedures.

When looking to have an HARP refinance, the services of an expert who is HARP approved might be helpful to give insight of the requirements needed to become eligible for the loan.

 

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