What is the HARP Loan (Home Affordable Refinance) Program?

What is the HARP Loan Program? On November 15, 2011 Former President Obama announced the updated Making Home Affordable Refinance Program, or HARP 2.0.  This program could help more than 1.5 million under water home owners refinance into a mortgage at or near today's historic low rates.

In simple terms the Home Affordable Refinance Program, or HARP 2.0, is a government-sponsored refinance program for borrowers who have less than 20% equity, or who are "under water."  

What is HARP (Home Affordable Refinance Program)?

It is a great deal. If you are current on your mortgage and have been unable to refinance using traditional refinance methods because the value of your home has declined, you may be eligible to refinance through HARP. 

You will be given a few options on term (30, 20 or 15 year) and the interest rate is a fixed rate for the life of the loan. It basically refinances what you currently owe (no cash out) and in most cases will let you finance in your closing cost (which are often minimal in comparison to a traditional refinance). 

HARP is designed to help you refinance into a new, affordable, more stable mortgage. The HARP loan is a NEW loan (not a modification) and will require a loan application and underwriting process.

What is the HARP Loan Program?

Obama signed the Helping Families Save Their Homes Act: "The Helping Families Save Their Home Act advance the goals of our existing housing plan by providing assistance to responsible homeowners and preventing avoidable foreclosures."

This bill is about, "getting folks into sustainable and affordable mortgage, and more importantly, keeping them in their homes. and it expands the reach of our existing housing plan for homeowners". 

The Fraud Enforcement and Recovery Act gives the federal government more tools to crack down on the kind of fraud that put thousands of hardworking families at risk of losing their homes despite doing everything right to live within their means. 

It expands the Department of Justice’s ability to prosecute at virtually every step of the process from predatory lending on Main Street to the manipulation on Wall Street. It also creates a bipartisan Financial Crisis Inquiry Commission to investigate the financial practices that brought us to this point, so that we make sure it never happens again.

Before signing it, the President said:

Last year, the Treasury Department received 62,000 reports of mortgage fraud -- more than 5,000 each month.  The number of criminal mortgage fraud investigations opened by the FBI has more than doubled over the past three years.  

And yet, the federal government's ability to investigate and prosecute these frauds is severely hindered by outdated laws and a lack of resources.

And that's why this bill nearly doubles the FBI's mortgage and financial fraud program, allowing it to better target fraud in hard-hit areas.  That's why it provides the resources necessary for other law enforcement and federal agencies, from the 

Department of Justice to the SEC to the Secret Service, to pursue these criminals, bring them to justice, and protect hardworking Americans affected most by these crimes.  

It's also why it expands DOJ's authority to prosecute fraud that takes place in many of the private institutions not covered under current federal bank fraud criminal statutes -- institutions where more than half of all subprime mortgages came from as recently as four years ago.

The Helping Families Save Their Homes Act expands on the success of the Making Home Affordable Program  first announced in February.  

By reducing foreclosures around the country, the average homeowner could see their house price bolstered by as much as $6,000 as a result of this plan, and as many as 9 million homeowners could get help making their mortgages affordable and avoid preventable foreclosures. 

This bill makes this help easier to access and take advantage of, helps get credit flowing again, establishes protections for renters living in foreclosed homes, and establishes the right of a homeowner to know who owns their mortgage. It also provides $2.2 billion to address homelessness, helping families be part of the recovery one by one.

Before signing it, the President said:

Let me talk a little bit about the housing bill.  The Helping Families Save Their Homes Act advances the goals of our existing housing plan by providing assistance to responsible homeowners and preventing avoidable foreclosures.  

Last summer, Congress passed the HOPE for Homeowners Act to help families who found themselves "underwater" as a result of declining home values -- families who owed more on their mortgages than their homes are worth.  

But too many administrative and technical hurdles made it very difficult to navigate, and most borrowers didn't even bother to try.

This bill removes those hurdles, getting folks into sustainable and affordable mortgages, and more importantly, keeping them in their homes.  

And it expands the reach of our existing housing plan for homeowners with FHA or USDA rural housing loans, providing them with new opportunities to modify or refinance their mortgages to more affordable levels.

HARP at a Glance

•     Step One

    Call us at (855) HARP- CALL to verify eligibility and to determine if your mortgage is owned by Fannie Mae or Freddie Mac.

•     Step Two

    The preferred lender will require borrowers’ credit report to verify financial information and an appraisal of the home may be required. The lender will notify you of your eligibility typically within 24 hours of your formal application.

•     Step Three

    Final Home Affordable Refinance Program application approval may take up to 10 buisness days from receipt of your signed application. Once a decision has been reached, you’ll receive a letter informing you of your eligibility. If approved, you will receive a call to schedule the closing of the loan.

•     Step Four

    The closing process will be completed by a notary/attorney typically in the comfort of your own home or other location of your choice. You will sign the closing documents and be required to pay the closing costs at this time, unless some or all of your closing costs can be financed into the loan amount.

What Does a HARP Mortgage Refinance Loan Do?

The Home Affordable Refinance Program (HARP) is designed specifically to help borrowers who may be ineligible for traditional refinancing due to a loss of home value or because they have little or no equity. 

Like other refinancing options, a HARP Mortgage Refinance Loan will provide you with a completely new mortgage with new terms, interest rates and monthly payments. 

The new loan completely replaces your current mortgage and may lower your payment or move you into a more stable loan product, which could help improve your monthly financial situation.

Since the downturn of the housing market, over 10 million homeowners now owe more on their homes than what they are worth. Obtaining a HARP Mortgage Refinance Loan may not improve your equity position but it may help you obtain a monthly payment you can afford, and may result in one or more of the following:

•     A reduction in your interest rate and or your monthly principal and interest mortgage payment.

•     A fixed-rate mortgage in place of an adjustable-rate, interest-only, or balloon/reset mortgage.

•     A reduction in the term of your mortgage (e.g., from 30 years to 15 years).

There are a few HARP Mortgage Refinance Loan Requirements which can be read here.

HARP Mortgage Refinance Loans generally requires one to have good credit as well. We supply a certified provider who can check that for you in just a few minutes here.

Do you meet the HARP Mortgage Refinance Loan Requirements? You can take full advantage of today’s low, low interest rates with a new HARP refinance mortgage loan, even if you owe more than your home is worth! 

If you meet the HARP Mortgage Refinance Loan Requirements and want to find out what your new mortgage payment could be, simply click here, provide the necessary information, and our network of lenders will go to work to find you the lowest possible HARP mortgage rate… all for free and with no obligation. Yes, it’s really that simple!

Frequently Asked Questions

Q1. I'm current on my mortgage. Will there be any help for me in the Making Home Affordable Refinance program?

A. Borrowers who are current on their mortgages but have been unable to take advantage of lower interest rates because their homes have decreased in value, may now have the opportunity to refinance. Through the Home Affordable Refinance Program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own using this program.

Q2. How do I know if the refinance will improve the long term affordability or stability of my loan?

A. The program won't help everyone. The lender will give you a "Good Faith Estimate" or GFE that includes your new interest rate, mortgage payment, closing costs and the amount you will pay over the life of the loan. An often used rule of thumb is if you can recover the costs of the refinance within 48 months, the refinance it makes reasonable sense is most cases. If not, refinancing may not be right for you. You can also eliminate risk if you currently have an ARM or an Interest Only loan by refinancing into a fixed rate mortgage, increasing the stability of your situation.

Q3. I owe more than my property is worth. Do I qualify to refinance under the Making Home Affordable Refinance program?

A. Eligible loans include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less on your first mortgage, you likely qualify. The current value of your property will be determined after you apply for the Home Affordable Refinance Program.

Q4. Will refinancing reduce the amount that I owe on my loan?

A. No! The Home Affordable Refinance Program is only meant to help borrowers get into loans that are more affordable. Refinancing won't reduce the principal amount you owe. However, refinancing should save you money each month by reducing your monthly payment and the amount of interest that you pay over the life of the loan.

Q5. Will I need private mortgage insurance?

A. ONLY if your existing loan has private mortgage insurance now, you will need the same amount of insurance coverage for the refinanced loan. If your existing loan does not have private mortgage insurance, it will not be required.

Q6. How long will the Home Affordable Refinance be available?

A. The program expires on June 31, 2010. UPDATE: The Obama Administration has extended the program to June 31, 2012.

Q7. I am delinquent on my mortgage. Will I qualify for a Home Affordable Refinance?

A. No. The program does not permit ANY late/delinquent payments in the last 12 months. Late/delinquent is defined as 30 days overdue one or more times in the most recent 12 month period.

Q8. Can I get cash out to pay other debts?

A. No you can't. However, you might be eligible to finance part or all of you closing costs into the new loan.

Know About HARP Mortgage Loans Program Eligibility