The Home Affordable Refinance Program, or HARP, was designed in March of 2009 to allow refinancing to those whose loan-to-value ratio exceeded 80%. The intent was to give borrowers access to lower interest rates without saddling them with private mortgage insurance. HARP can also be used to convert an adjustable rate mortgage into a more foreseeable fixed-loan program or provide refinancing for a shorter-term loan, which can help build equity at an accelerated pace.
Factors to Consider Before Looking Into HARP
- The loan in question must be owned or guaranteed by Freddie Mac or Fannie Mae. Check with your lender to be sure this is the with the loan in question.
- Fannie Mae or Freddie Mac must have taken ownership of the loan on or before May 31st, 2009.
- This must be the first attempt to refinance under the umbrella of HARP, unless the loan happens to be a Fannie Mae loan that was refinanced under the original HARP program that spanned March-May of 2009.
- Homeowners must be current on their mortgage payments, have no late payments on record in the last 6 months, and no more than one late payment in the last 12 months.
- The current loan-to-value ratio (LTV) of the property must be greater than 80%.
The criteria for utilizing HARP has changed several time since its inception in 2009, and its current version, “HARP 2.0,” allows homeowners to go to any lender to pursue refinancing despite the possibility of the mortgage holder being reluctant to offer HARP refinancing.
There is currently a plan entitled, “HARP 3.0,” making its way through congress that would extend the benefits of HARP to those with non-Fannie Mae and Freddie Mac mortgages, but it has not currently been signed into law. The HARP program is scheduled to end on December 31st of 2015.