The government’s new, revamped HARP program is 6 weeks from release. Homeowners in California and nationwide are gearing up to refinance.
HARP is an acronym. It stands for Home Affordable Refinance Program. HARP is the government’s loan product for “underwater homeowners”. HARP makes current mortgage rates available to households which would otherwise be unable to refinance because the home lacks equity.
This is a big deal — especially today. Mortgage rates are at an all-time low and millions of U.S. homeowners have been unable to take advantage. HARP aims to change that.
HARP originally launched in 2009. Its first iteration failed to reach a meaningful percentage of U.S. homeowners, however, because costs were high and loans were high-risk. With its re-release, the government has removed the hurdles to HARP, putting refinancing within reach for millions of U.S. households.
To qualify for HARP, homeowners must first meet 3 qualifying criteria.
First, their current mortgage must be backed Fannie Mae or Freddie Mac. FHA- and VA-backed loans are HARP-ineligible, as are jumbo loans and loans backed by portfolio lenders.
- To check if your loan if Fannie Mae-backed, click here.
- To check if your loan if Freddie Mac-backed, click here.
Second, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior on, or before, May 31, 2009. If you bought your home or refinanced it after that date, you are HARP-ineligible.
There are no exceptions to this rule.
And, third, the existing mortgage must be accompanied by a strong repayment history. Mortgage payment must have been paid on-time for the last 6 months, at least, and there may not be more than one 30-day late payment in the last 12 months.
If these 3 qualifiers are met, HARP applicants should find the approval process straight-forward :
- Fixed rate mortgages allow unlimited loan-to-value
- The standard 7-year “waiting period” after a foreclosure is waived in full
- Except in rare cases, home appraisals aren’t required
Furthermore, HARP mortgage rates are expected to be on par with non-HARP rates, meaning that HARP homeowners in San Francisco will get the same rates and pay the same fees as everyone else. There’s no “penalty” for using HARP.
The revamped HARP is expected to be generally available beginning Monday, March 19, 2012.
To get a head-start on HARP, check with your loan officer for the complete list of HARP eligibility requirements.