NEW HARP 2.0 Interest Rate Reduction Program
HARP is a federal government program that originated in March 2009 designed to help 5 million underwater or near-underwater homeowners refinance into a fixed home loan with a lower monthly payment.
However, many consumers are still unaware of the existence this fantastic program and the benefit it can provide them. On Oct. 24, 2011, President Obama announced an overhaul to the HARP program with the goal of reaching more underwater homeowners. The new expanded HARP program (now often referred to as HARP 2.0) took effect on December 1, 2011 for all borrowers with a loan-to-value ratio of less than 125 percent. In the first quarter of 2012, borrowers with a loan-to-value ratio of greater than 125 percent also became eligible. The program has been extended to run through December 31, 2013 to provide as much assistance as possible.
How to Qualify for HARP 2.0
To be eligible to refinance under HARP, consumers must meet all of the following requirements:
- You must have closed your current mortgage on or before May 31, 2009
- Your mortgage must be owned or guaranteed by either Freddie Mac or Fannie Mae
- You cannot have refinanced under HARP previously unless you have a Fannie Mae loan that was refinanced under HARP from March-May, 2009
- You must be current on your home loan
- You cannot have made a late payment within the past six months or more than one late payment in the past 7-12 months
The loan-to-value ratio must be greater than eighty percent
Your loan needs to fall under the current conforming loan limits. A conforming loan is one that falls at or below the maximum financeable amount allowed by the FHFA. Typically, the maximum amount financed is $417,000, although in some high cost areas defined by the FHFA the maximum amount can be increased to $625,500.
How to Find Out If Your Mortgage Is Fannie Mae or Freddie Mac
Check both Fannie Mae and Freddie Mac's websites or call their toll-free phone numbers for confirmation.
Fannie Mae: 1-800-7FANNIE (8 am to 8 pm ET)
Freddie Mac: 1-800-FREDDIE (8 am to 8 pm ET)
Freddie Mac and Fannie Mae are two separate government-sponsored enterprises (also known as GSEs) that buy and guarantee about fifty percent of all outstanding mortgages.
You can do a look up of your loan here:
To break it down, lenders and banks make home loans to borrowers and then proceed to sell them to Fannie Mae or Freddie Mac. Most banks sell many of the loans they make to Fannie Mae or Freddie Mac as a common practice with some exceptions–Veteran's Administration (VA) or Federal Housing Administration (FHA) loans for example.
HARP and Foreclosure
Unfortunately if you are at risk of home foreclosure, you will not be able to qualify for the Home Affordable Refinance Program. However, if you are current on your loan but need a smaller monthly payment due to an impending inability to pay your mortgage, then the HARP program could possibly help you avoid foreclosure.
Previous Refinance and HARP
If you have refinanced with HARP a few years ago, your mortgage cannot be eligible for HARP 2.0. Learn more about the HARP 2 Limitations. Keep in mind however that there is one exception to this rule; if you hold one of the few Fannie Mae backed mortgages that were refinanced under HARP from March-May 2009, you are likely still eligible.
HARP and PMI
Many consumers are concerned that they will have to pay private mortgage insurance, or PMI, when refinancing with HARP. However, if you were not required to get mortgage insurance when you purchased your home, you will not be required to get it when you complete a HARP refinance.
United Mortgage Corp is a mortgage banker with Fannie Mae and Freddie Mac agency approvals. We are not encumbered by overlays, and are a full open access lender.
- Unlimited CLTV
- Appraisal Waiver if Qualified
- LTV’s over 105% available
- High Debt Ratios Allowed- We Do EA 1, 2 & 3
- Based on DU (Fannie)/ LP (Freddie) findings
- No Additional Underwriting Overlays
- Quick Turnaround / Great Rates
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