Back in 2009, the Home Affordable Refinance Program (otherwise known as HARP) was born. This is a government-run program that allows home owners with Fannie Mae or Freddie Mac loans to refinance at a lower interest rate, even if their home is way under valued. HARP recently got a face-lift. It used to base qualifications on a 125% loan-to-value, but this criteria is now off the table.
In order to be eligible for HARP, one must:
- Have a loan backed by Fannie Mae or Freddie Mac (check with your lender or take a look at their individual websites to find out if you have one of these loans).
- Have a loan with a securitization date prior to June 1, 2009.
- Be current on payments for the prior 6 months and at least 11 of the most recent 12 months.
- Have not used HARP before. This is a one-time deal, folks.
The good news is that home owners who are current on payments but are living in a home that is way under valued can still refinance to get a lower interest rate. There is no more loan-to-value restriction! Note that this program is not intended to stop or delay foreclosures.
For a thorough guide to HARP 2.0 in layman’s terms, check out this article by Dan Green.