Frequently Asked Questions About HARP Refinancing

With the HARP program set to expire on December 31, 2015, time may be running out on this unique refinancing opportunity. Since it was initiated in 2009, the HARP program has helped thousands of underwater homeowners with a chance to refinance, take advantage of lower interest rates, and build back the equity in their homes.

The Home Affordable Refinance Program was created through the Department of the Treasury and Housing and Urban Development. It was developed as a hand up for homeowners who would like to refinance but were unable to due to a drop in the value of their home. HARP can help those who are current on their mortgage by refinancing it with one that is more affordable and stable. To be eligible for the HARP program, homeowners must meet the following requirements:

• Freddie Mac or Fannie Mae must own or guarantee the mortgage and it must have been sold to either of them before May 31, 2009. You may not have refinanced with HARP before.
• If you meet these criteria, you may be eligible for HARP. Mortgages that originated as an FHA, USDA, VA or a jumbo mortgage, are not HARP-eligible.

In December of 2011, a new program called HARP 2.0 was implemented in an effort to streamline the existing guidelines. Since that time, thousands more have taken advantage of this opportunity. Because of the changes that were made after HARP first began, many homeowners have lingering questions about the program and their eligibility requirements. Here are a few explanations to the most frequently asked questions*:

• HARP and Making Home Affordable are often used interchangeably. It is also often referred to as “Obama Refi,” since it was developed under the Obama Administration. However, HARP is not the same as “A Better Bargain for Responsible Homeowners,” which is a suggested list of reforms. HARP is a specific mortgage program.
• You can use this link to confirm that Fannie Mae or Freddie Mac hold your mortgage: https://knowyouroptions.com/loanlookup
• Even though you may discover that Freddie or Fannie hold your loan, there are still other requirements for eligibility.
• To verify your HARP eligibility, contact a mortgage officer at eLEND by calling 800-634-8616.
• To be eligible, you must be current on your monthly mortgage payments.
• It should be stressed that refinancing through HARP will not stop the foreclosure process. It is designed give homeowners who are current on their mortgages, and who have lost home equity a chance to refinance at today’s low mortgage rates.
• If you meet the eligibility requirements, and are not underwater, it may still be possible to refinance your home through HARP.
• There are no loan-to-value restrictions, so that means no matter how far underwater the homeowner has become, HARP may be a solution. However, the new refinanced mortgage must be a fixed rate loan with a term of 30 years or less. For anyone wishing to use the HARP program and refinance to an adjustable rate mortgage, the loan-to-value has a 105 percent cap.
• Homeowners who paid 20 percent down and were not required to pay private mortgage insurance may not have to pay it through a HARP refinance.
• Those currently paying for PMI can refinance via HARP 2.0 and should not see an increase in their rates.
• The largest mortgage that is possible to obtain through a HARP refi is kept in check by each area’s conforming loan limits. Depending on where you live, they range between $417,000 and $625,500.
• It is not possible to do a cash-out refinance with HARP.
• Condos, vacation homes, and investment properties maybe eligible for HARP. It is also possible to refinance the property and rent it out – as long as all of the program guidelines are met.
• HARP may not be used to consolidate several mortgages – it is for properties with first liens only.
• Homeowners who are unemployed and unable to earn an income may still be eligible for HARP.
• If a HARP-eligible homeowner is underwater, their income, no matter how high, will not prevent them from being able to refinance.
• Couples who have gone through a divorce may be removed from the original mortgage agreement through the refinance action. They must also be taken off the deed.

For more information, feel free to contact the HARP loan officers at eLEND by calling 800-634-8616. You can also get more information from the official HARP website.

* Please note some of the loan and eligibility details in this post may vary by lender and/or may have changed since this post was created. Please contact a licensed loan professional in your area for the most up-to-date HARP financing criteria.