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HARP & Streamline Refinance

What is the HARP program? 

The Home Affordable Refinance Program (HARP 2.0) is a government sponsored program enacted by the Federal Housing Finance Administration in 2009 to assist homeowners in their refinancing of their homes when they have lost equity and a "traditional" refinance is not possible. The purpose of the program is to simply allow responsible homeowners refinance even if they are "underwater" in order to reduce the rate on their mortgages to save on monthly payments or lower their mortgage term, refinance out of a risky loan such as an Adjustable Rate Mortgage (ARM) or an Interest-Only (IO) loan.

What are the qualifications for a HARP loan? 

The loan is conventional/conforming and be backed by either Fannie Mae or Freddie Mac. These are the government-sponsored entities that provide the majority of the liquidity to the mortgage market. Your loan documentation will NOT mention anything about this so you can find either by asking a loan professional or by looking it up yourself by visiting:

Fannie Mae HARP Lookup

Freddie Mac HARP Lookup

The fields are highly sensitive and sometimes, your mortgage may be backed by one of those two but the websites won't show it. In this case, the ultimate way to check is by having your liabilities pulled by a mortgage professional.
  • The mortgage must be current. Though some guidelines have changed, some lenders may not provide financing if you have been late by 30+ within the last 6 to 12 months. 
  • The property may not be up for sale, and if it was on the market, it must be at least 3 months off of it. 
  • You must show job history, income, credit and asset documentation. 

  What are the advantages of refinancing through HARP? 

  • In most cases, there is no need for an appraisal. Appraisals are necessary in traditional refinances but if Fannie and/or Freddie provide the lender with an "appraisal waiver", there is no need to have one done. 
  • You can be underwater by infinity. This means that the Loan-to-Value (LTV) of your home can be 200% and still be able to refinance. 
  • You do not have to be underwater to take advantage of HARP. In fact, if your mortgage is backed by Fannie Mae or Freddie Mac, you can refinance through HARP and acquire a better rate than a property with negative equity. 
  • Income qualifications are more flexible than on traditional refinances. 
  • Credit and FICO qualifications are also more flexible. 
  • Usually, there are no closing costs out of pocket as the majority, if not all, can be rolled into the loan. 

What are some of the misconceptions of HARP?

  • A HARP refinance will not lower your principal owed. Your payoff will stay the same. If closing costs are rolled into the loan, expect your new loan amount to be slightly higher. 
  • HARP rates are usually higher than on traditional, rate/term refinances. This is true especially in homes with little or no equity. 
  • A HARP refinance is not the same as a modification. The modification program is offered through the HAMP program. 
For more questions or to find out if you qualify for a HARP refinance, click here.  


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