Home Affordable Refinance Program
Under the newest version of the HARP Program (also known as HARP 2 or HARP Phase II), loan-to-value restrictions have been eliminated completely. You can now refinance no matter how far your mortgage is underwater.
Learn more about the key benefits of the HARP Home Affordable Refinance Program and the eligibility guidelines to qualify.
Home Affordable Refinance Program Key Benefits
- Unlimited loan-to-value ratio. No equity needed!
- Lower mortgage rates due to reduced pricing adjustments under HARP 2.0.
- Primary residences, second homes and investment properties are all OK!
- Allowed to choose from all HARP refinance lenders to get the lowest rates available.
- Expanded underwriting guidelines allow more people to qualify.
HARP Program Mortgage Eligibility
- Mortgage on the property must be owned or guaranteed by Fannie Mae or Freddie Mac
- Loans from the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs (VA) or U.S. Department of Agriculture (USDA Rural Housing) do not qualify nor do jumbo loans
- Mortgage must have been sold on or before May 31, 2009 to Fannie Mae or Freddie Mac
- Previous HARP refinances under the Home Affordable Refinance Program not allowed (with exception of Fannie Mae loans refinanced from March – May 2009)
- Current loan-to-value ratio must be greater than 80%
Home Affordable Refinance Program Borrower Guidelines
On October 24, 2011, the Federal Housing Finance Authority announced the expansion of the Home Affordable Refinance Program to help realize President Obama’s goal “to provide access to low-cost refinancing for responsible homeowners suffering from falling home prices.”
The expectation is that by allowing homeowners who have not been able to refinance due to a decline in the value of their home, borrowers will be put in a better position by reducing their monthly payments (such as a reduction in interest rate) or moving from a risky loan product into a more stable one (such as moving from an adjustable-rate mortgage (ARM) to a fixed rate mortgage).
- Borrowers must be current at the time of application with a good payment history for the past 12 months
- No late payments within the past 6 months
- No more than one late payment in the past 12 months
- Borrowers must benefit from the refinance by at least one of the following :
- A reduction in the interest rate
- A reduction in the monthly payment
- A reduction in the term of the mortgage
- A fixed rate mortgage in place of an adjustable rate, interest only or balloon payment mortgage
- Borrowers limited to refinance of outstanding 1st mortgage balance and closing costs only
- No cash out refinances allowed (max $250 cash back to borrower at closing)
HARP Program Property Guidelines
Property guidelines under the HARP Home Affordable Refinance Program are without doubt the most flexible part of the entire program to obtaining a HARP approval.
- Owner occupied, 2nd homes and rental properties are all allowed
- All residential property types are permissible including :
- 1-4 unit primary residences (including condos, co-ops, manufactured housing and PUDs)
- No condotels
- 1 unit second homes
- 1-4 unit investment properties
- Unrestricted loan-to-value ratio (LTV)
- Unlimited combined loan-to-value ratio (CLTV) when subordinating a 2nd mortgage or home equity line of credit (HELOC)
- 2nd mortgage or HELOC lender must approve subordination
- Expanded use of property inspection waivers in lieu of appraisal
- Project review of condominiums not required
- No minimum owner-occupancy ratio
- One entity may own more than 10% of total units in the condominium project
- No limit on number of other financed properties