Comprehensive Guide to the HARP Refinance Program
Learn everything about the HARP refinance program, designed to help homeowners with negative equity refinance their mortgages. Discover eligibility requirements, benefits, and how this initiative can secure better loan terms for underwater homes before the extended deadline in December 2018.
Understanding the HARP Refinance Initiative
Introduced in 2009 by the Federal Housing Finance Agency, the Home Affordable Refinance Program (HARP) is designed to assist homeowners with negative equity in refinancing their mortgages. This program targets properties where the market value is less than the remaining mortgage balance, often known as underwater or negative equity homes. HARP enables qualified homeowners to refinance despite having little or no equity, providing a pathway to better loan terms.
Traditionally, lenders require a loan-to-value (LTV) ratio of 80% or below to proceed with refinancing without private mortgage insurance (PMI). However, HARP expands this limit, initially allowing LTVs up to 105%, later increasing to 125%, and eventually extending eligibility to properties with LTV ratios exceeding 125%. This uncertainty provided lenders with assurance against potential mortgage fraud, encouraging broader participation in the program.
Eligibility criteria for HARP include:
The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
Mortgage payments should be current and up-to-date.
The loan-to-value ratio must be over 80%.
The original mortgage must have been initiated on or before May 31, 2009.
While these are key requirements, other conditions may apply. Originally set to conclude in December 2016, the HARP program's deadline has been extended to December 2018. If you meet these criteria, explore HARP options to secure a more favorable mortgage rate today.
