Obama’s harp program – The home affordable refinance plan.
In March 2009, the FHFA and the Department of the Treasury called the harp program into life.
The U.S. housing bubble crashed in 2008, and many borrowers were in a difficult situation.
Traditionally, banks require a loan to value ratio of 80% or less to get a refinancing loan without a private mortgage insurance.
However, millions of homeowners lost a significant part of the value of their homes. The Home Value drops below the balance of their mortgages.
“Take for example a house that was purchased for $160,000 but is now worth $100,000 due to the market decline. Further, assume the homeowner owes $120,000 on the mortgage. In this scenario, the loan-to-value ratio would be 120%, and if the homeowner chose to refinance, he would also have to pay for private mortgage insurance. If the homeowner were not already paying for PMI, the added cost could nullify much of the benefit of refinancing, so the homeowner could be effectively prohibited from refinancing
harp provides borrowers, who may not otherwise qualify for refinancing because of declining home values or reduced access to mortgage insurance, the ability to refinance their mortgages into a lower interest rate and/or more stable mortgage product.”
FHFA Announces Modifications to High LTV Streamlined Refinance Program and Extension of HARP Through December 2018
FOR IMMEDIATE RELEASE
Washington, D.C. – The Federal Housing Finance Agency (FHFA) today announced modifications to the streamlined refinance program for borrowers with high loan-to-value (LTV) ratios. On August 25, 2016, FHFA announced that Fannie Mae and Freddie Mac (the Enterprises) would implement a High LTV Streamlined Refinance program to provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance because their loans have LTV ratios that exceed the Enterprises’ maximum limits.
The program announced today establishes an eligibility date which makes the program available for loans originated on or after October 1, 2017. The eligibility date was necessary to preserve the objectives of the Enterprises’ credit risk transfer (CRT) program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017. The Enterprises will modify the structure of future CRT transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid. This will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.
The changes made to the High LTV Streamlined Refinance program appropriately balance continuing to offer assistance to underwater borrowers with protecting taxpayers.
HARP Extended Through 2018 ⇒ source
What is harp program for the mortgage and is it real?
YES, the home affordable refinance plan is real. It is a government refinance program (you can call it: president’s mortgage relief program; or: Obama refinance program) The harp loan program helps homeowners who are unable to refinance due to a decline in their home’s value.
When does the harp program end?
The harp program extended through September 30, 2017.
The #harp program extended through September 30, 2017
— save money (@AudaExplore_) May 24, 2017
What are the harp requirements?
There are certain criteria to qualify for a harp refinance. Maybe the mortgage service has additional harp loan requirements, too.
You can find the government harp eligibility in the list below.
- Fannie Mae or Freddie Mac must own or guarantee the loan.
- The loan was originated on or before May 31, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80 percent.
- The borrower must be current on their mortgage with no late payment in the last six months and no more than one late payment in the last 12 months.
Are You Eligible for HARP?
Frequently Asked Questions, answered from HARP.gov
How do I know if I’m eligible for HARP?
• Your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• Your mortgage must have been originated on or before May 31, 2009.
• Your current loan-to-value (LTV) ratio must be greater than 80%.
• You are current on your mortgage, with no 30-day+ late payments in the last six months and
no more than one late payment in the past 12 months.
How do I find out if Freddie Mac or Fannie Mae owns my loan?
Visit the HARP.gov eligibility page and use the Loan Look-up Tools to help you determine if your
loan is owned or backed by Freddie Mac or Fannie Mae. After entering basic information (e.g.,
name, address) into the tool, you will receive an immediate response indicating whether Freddie
Mac or Fannie Mae owns your mortgage.
How do I find out if my lender offers HARP?
We encourage you to call your lender as soon as possible and ask them if they participate in
HARP. For your convenience, visit HARP.gov for guidance on how to get started. There you will
find helpful links for lender information and lenders who work with existing borrowers. If your
lender is not listed, it doesn’t mean they don’t offer HARP — reach out to them using the contact
information on your mortgage statement and ask for the refinance department. If your current
lender does not offer HARP, there are other lenders that you can contact. Review the list of
participating HARP lenders, available under the “Resources” tab on HARP.gov, to find a lender who
can discuss your options and eligibility with you.
I tried to refinance through HARP when the program was first introduced, but I owed
more than 105% of the value of my home. Should I try again?
Yes. HARP has been enhanced since the program was first introduced in 2009. Now, HARP allows
borrowers, who owe significantly more than their house is worth, to refinance and take advantage
of today’s low interest rates.
It is very time-consuming to pull together all the paperwork to refinance. Do I need the
same amount of paperwork to refinance under HARP?
HARP offers a more streamlined process than traditional refinance programs, requiring less
documentation and allowing for a smoother and faster transaction. Please contact a HARP
lender for more details on what you will need to provide.
I’ve had my loan for seven years and don’t want to start all over again with a
30-year mortgage. Can I refinance into a shorter-term loan?
Freddie Mac and Fannie Mae allow you to refinance into fixed-rate mortgages with terms anywhere
from 10 years to 30 years. Check with your lender to see if they offer shorter-terms and ask about
refinancing into a shorter-term mortgage.
Is there a benefit for homeowners to shorten the terms of their mortgage?
A shorter-term mortgage enables you to pay down the amount you owe much faster than a
traditional 30-year mortgage. Furthermore, interest rates on shorter-term mortgages usually
are lower than 30-year mortgages. The lower interest rate may allow you to shorten the
term of your mortgage without much change in your monthly payment and you will pay less
interest over the life of the loan.
Can I refinance under HARP if my property isn’t my primary residence?
Yes. In addition to primary residences, HARP allows you to refinance even if your property
is an investment property or second home.
I live in a condominium. Can I refinance under HARP?
Yes. HARP allows mortgages on condominiums to be refinanced.
Freddie Mac and Fannie Mae guidelines indicate that I should be eligible for HARP, but
my lender said I am not. Why?
Freddie Mac and Fannie Mae purchase mortgages that meet each of their requirements from
banks and other lending institutions. Lenders may have their own requirements in addition to
Freddie Mac and Fannie Mae HARP guidelines. It is important that you reach out to your lender to
discuss your eligibility for the program.
Will refinancing through HARP reduce the principal amount that I owe on my loan?
No. HARP is designed to help borrowers get into more affordable loans, but will not reduce the
principal amount you owe on your mortgage. However, refinancing through HARP can benefit
you with a new loan that has more favorable terms, such as a lower interest rate that will save
you money by reducing your monthly payment and the amount of interest that you pay over the
life of the loan.
Are offers from companies promising to help me get a HARP loan legitimate?
Many borrowers have become wary of the multiple solicitations they receive to refinance their
mortgage. Legitimate offers often have specific information identifying your current mortgage,
including the loan number your mortgage servicer uses with your mortgage — which is printed
on your statement. Valid offers will not require you to pay an upfront fee for services. If
you are unsure if an offer is legitimate, we recommend you call your lender before responding
to third-party companies that advertise themselves as “mortgage experts” or “foreclosure
specialists” to apply for a HARP loan.
Read this article to find the best mortgage lenders for refinancing.
How to Start with your harp program?
Watch this short video!