Home Affordable Refinance Program

Home Affordable Refinance Program

The Home Affordable Refinance Program (HARP) is a federal government initiative that has helped nearly 3 million American homeowners to lower their monthly mortgage payment and avoid a foreclosure or short sale. Almost one-third of the homeowners helped owed more on their homes than what their home was worth. Initially introduced back in 2009 by the Federal Housing Finance Agency (FHFA), this program was put in place to aid homeowners that had little to no equity in their homes.  While HARP did not get off to a great start initially, it was revised in 2012 and last year we saw many homes saved from foreclosure as a result.

The federal government tried several different programs to help those affected by the foreclosure crisis such as HAMP, HARP and others. Out of all of them, most believe that HARP is the most successful so far.

Home Affordable Refinance Program

Who is Eligible for HARP?

Someone may be eligible for the Home Affordable Refinance Program (HARP) if they are not behind on mortgage payments but have been unable to complete a traditional refinance due to the decreased value of the home. By design the government program has been put in place to help those attain a more affordable and stable mortgage. It is very similar to a regular refinance in that it does have refinance fees that apply as well as the loan application and the entire underwriting process. There are certain criteria that one must meet in order to be eligible for HARP which includes the following:

• The current loan-to-value (otherwise referred to as LTV) ratio must be greater than 80%.
• The mortgage must be current at the time of refinance and have a good payment history over the last 12 months of the loan.
• The mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.
• The mortgage must have been sold to Fannie Mae or Freddie Mac prior to May 31, 2009.
• Your mortgage must not have been refinanced through HARP before, with the exception of a Fannie Mae loan that was refinanced through HARP between March and May of 2009.

A Few Advantages of HARP:

• Gain a lower interest rate
• Lower your monthly mortgage payment
• Obtain a shorter loan term
• Switch from an adjustable rate to fixed-rate mortgage
• No minimum credit score needed to qualify

Think You Want to Learn More?

This program is set to end on December 31, 2015. If you want to learn more, ask the mortgage company that you make your mortgage payments to if they participate in the program (as not all lenders do). You can learn more online or can contact Fannie Mae or Freddie Mac to determine if you are eligible for HARP.

On average, borrowers that have already refinanced under HARP have saved $350 per month. One estimate from Goldman Sachs showed that approximately 580,000 borrowers across the United States (who are eligible for the program) could save a minimum of $150 each month by refinancing. Of course, HARP activity varies based on interest rates.  In many cases, HARP is able to save homeowners from short sale or a foreclosure. There are many resources online and through local lenders that can help you learn more.  Home Affordable Refinance Program may be a good fit for your individual situation.

Sell Your Boston HouseHome Affordable Refinance Program

Rick Toney

View posts by Rick Toney
Rick Toney Is A Seasoned Real Estate Professional With Over 25 Years Of Real Estate Experience, Writes A Weekly Real Estate Blog And Is A Principal of Blue Moon Realty Group And Mesa Realty Advisors. Blue Moon Realty Group Is A Residential Redevelopment Company Specializing In The Purchase And Renovation Of Older And Physically Distressed Homes (Flip This House Boston). Mesa Realty Advisors Is An Affordable Housing Developer Specializing In The Redevelopment Of Existing Low-Income Housing Properties. Rick Is A Certified Public Accountant (CPA - Retired) In The State Of California, A Certified Property Manager (CPM - Retired) And A Real Estate Broker In The States Of California (Retired) And Massachusetts.

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