HARP 2.0 has been a boon to the U.S. homeowner. As mortgage rates have dropped, it’s given homeowners with little, zero, or negative equity access to this year’s ongoing Refi Boom. Not surprisingly, in some states, HARP is more common than in others.
HARP : Minimal Qualification Standards
The Home Affordable Refinance Program (HARP) is a government refinance program meant for homeowners whose homes have lost value. It was initially launched in 2009 as part of the Making Home Affordable initiative, a program which also launched HAMP (Home Affordable Modification Program).
The main difference between HARP and HAMP is that HARP is for homeowners who are current on their respective mortgages. HAMP is for homeowners facing foreclosure or whom are otherwise delinquent on their mortgage.
HARP is sometimes called the “Obama Refi”, and it’s a program offered via Fannie Mae and Freddie Mac exclusively. The Fannie Mae version of HARP is known as “Refi Plus”. The Freddie Mac version is known as “Relief Refinance”. Both programs do the exact same thing.
The requirements for a HARP mortgage are basic :
- Your loan must have been securitized by Fannie Mae or Freddie Mac
- Your loan must have been securitized on, or before, May 31, 2009
- You may not have previously used the HARP program to refinance
In addition, your mortgage payment history must be perfect for the last 6 months with no more than one late payment in the last 12 months.
HARP 2.0 : Underwater Homeowners Get Relief
When HARP was initially launched in 2009, it was built to reach more than 7 million U.S. households. Through its first two years, however, it was clear that the Home Affordable Refinance Program was falling short of that goal.
Between 2009-2011, HARP helped fewer than one million households.
So, to help give HARP more teeth, the government re-wrote and re-tooled it. The changes were split into two parts. The first part was meant to reduce HARP lending risks for banks, compelling more banks to offer the program. That move was successful.
The second part was geared at homeowners. With HARP 2.0, regardless of home equity, homeowners were made refinance-eligible. HARP was changed to allow for unlimited LTV. So long as your loan size does not exceed your local conforming loan limits, you can use HARP.
It doesn’t matter what your home is (not) worth. Yes, you can use HARP to refinance.