UPDATED (As of October 31, 2011) : The government announced changes to its HARP program October 24, 2011. This post is accurate and up-to-date.
If you’re underwater on your mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.
Here is the details of the government’s new 2011 HARP refinance program.
What Is HARP?
HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.
The program is also known as the Making Home Affordable plan, the Obama Refi plan, and Relief Refinance.
In order to be eligible for the HARP refinance program :
Your loan must be backed by Fannie Mae or Freddie Mac.
Your current mortgage must have a securitization date prior to June 1, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible, however there are refinance options for you.
HARP : FAQ’s
Do these question-and-answers account for the “NEW” HARP program?
Yes, everything you are reading is accurate as of today, October 31, 2011. This post includes the latest changes rolled out by the Federal Home Finance Agency on October 24, 2011.
How do I know if Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie Mac have “lookup” forms on their respective websites. Check Fannie Mae’s first because Fannie Mae’s market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP. However, there have been cases in the past that a loan does not appear on either site, but truly is owned by Fannie or Freddie. It just required more investigation…
If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?
No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
Is “HARP” the same thing as the government’s “Making Home Affordable” program?
Yes, the names HARP and Making Home Affordable are interchangeable.
My mortgage is held by Fannie Mae or Freddie Mac. Now what do I do?
Find a recent mortgage statement and write “Fannie Mae” or “Freddie Mac” on it — whichever group backs your home loan — so you don’t forget. Give that information to your lender when you apply for your HARP refinance.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?
If neither Fannie Mae nor Freddie Mac has record of your mortgage, your loan is HARP-ineligible. However, you may still be eligible for a “regular” refinance to lower rates. Email me to see your options. Or, if your mortgage is insured by the FHA, you can refinance using the FHA Streamline Refinance program.
Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP.
Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It’s meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today’s low mortgage rates.
What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP program before — only one HARP refinance per mortgage is allowed.
Is there a 125% loan-to-value restriction for HARP?
No, there is no 125% loan-to-value restriction. All homes — regardless of equity or lack thereof — are eligible for the HARP program.
I am really far underwater on my mortgage. Can I use HARP?
Yes, you can. There is no loan-to-value restriction under the HARP program.
Maybe I wasn’t clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?
Yes, I am sure. The new HARP program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can be at 300% loan-to-value on your property and still be HARP-eligible. HARP now has an unlimited LTV.
Will my home require an appraisal with the HARP program?
Sort of. Although your home’s value doesn’t matter for the HARP program, lenders will run what’s called an “automated valuation model” (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose a physical appraisal anyway — just to make sure your home is “standing”.
Is HARP the same thing as an FHA Streamline Refinance?
No, the HARP program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.
Do I have to HARP refinance with my current mortgage lender?
No, you can do a HARP refinance with any participating mortgage lender. Call or email us to get the process started.
So, I can use any mortgage lender for my HARP Refinance?
Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender.
I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
No, you won’t need to pay mortgage insurance. If your current loan doesn’t require PMI, your new loan won’t require it, either.
I pay PMI (Private Mortgage Insurance) now. Will my PMI payments go up with a new HARP refinance?
No, your private mortgage insurance payments will not increase. However, the “transfer” of your mortgage insurance policy may require an extra step. Remind your lender that you’re paying PMI to help the refinance process move more smoothly.
What’s the biggest mortgage I can get with a HARP refinance?
HARP refinances are limited to your area’s conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.
Here is 2011-2012 Conforming And FHA Loan Limits for Clark County, NV.
Conforming Loan Limits FHA Loan Limits
1-Unit $417,000 maximum $287,500 maximum
2-Unit $533,850 maximum $368,050 maximum
3-Unit $645,300 maximum $444,900 maximum
4-Unit $801,950 maximum $552,900 maximum
Can I do a cash-out refinances with HARP?
No, the HARP program doesn’t allow cash out refinance. Only rate-and-term refinances are allowable.
Can I refinance an investment/rental property with HARP?
Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you’re an “accidental landlord” via HARP. The loan must meet typical program eligibility standards.
Can I refinance a second/vacation home with HARP?
Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.
Are condominiums eligible for HARP refinancing?
Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.
Can I consolidate mortgages with a HARP refinance?
No, you cannot consolidate multiple mortgages with the HARP refinance program. It’s for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.
Can I “roll in” my closing costs with a HARP refinance?
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however.
I am unemployed and without income. Am I HARP-eligible?
No. Income verification is required for the HARP refinance program.
My original mortgage was a stated income loan. Will my income be verified with a HARP refinance?
Yes, with HARP, applicant income is verified in the same manner as with a traditional refinance — via a combination of paystubs, W2’s, tax returns and other, underwriter-requested documentation.
What are the HARP program’s mortgage rates?
Mortgage rates for the HARP program are the same as for a “traditional” refinance. There is no “premium” for using the HARP program.
Do HARP refinances use Loan-Level Pricing Adjustments?
Technically, loan-level pricing adjustments due to risk of the borrower do not apply to HARP refinances, but borrowers may be subject to LLPAs based on their respective credit scores or home-types (e.g.; 2-unit, 3-unit, 4-unit). Loan-to-Value LLPAs are reduced and/or waived.
Is there a minimum credit score to use the HARP program?
No, there is no minimum credit score requirement with the HARP refi program, per se. However, you must qualify for the mortgage based on traditional underwriting standards. Your lender may have their own requirements.
Do I have to refinance my mortgage with my current lender?
In most cases, no. You can do a HARP refinance with any lender you want.
What does the term “DU Refi Plus” mean?
“DU Refi Plus” is the brand name Fannie Mae assigned to its particular flavor of the HARP program. “DU” stands for Desktop Underwriter. It’s an automated software program that simulates mortgage underwriting based upon certain criteria. “Refi Plus” is a gimmicky-sounding term that could have been anything. The name has been trademarked, however. As a side note, Freddie Mac is using the branded name “Relief Refinance”.
Can I remove my spouse or a co-signer with a HARP refinance?
Maybe. HARP guidelines specifically prohibit removing a co-signer from the note, but there are circumstances in which you may be able to remove a co-signer from the mortgage and from the deed so that the former co-signer has no ownership interest in the home.
For how long should I lock my mortgage rate via the HARP Program
Lock for 45 days, at minimum. This is because the HARP program, while streamlined for simplicity, still has some grey areas that can lead to delay. It’s better to have a rate lock that lasts too long than not long enough. Lenders claim they will begin taking applications as soon as December 1st.
When does the HARP program end?
If you are HARP-eligible, you must close on your mortgage prior to December 31, 2013.
How do I apply for the HARP program?
Start your online application here if you’d like. See if your loan is eligible and what to do next. Or just call or email me. There is no fee for applying.
Apply For Home Affordable Refinance Program
When you’re ready contact me!
Lastly, don’t forget… The Home Affordable Refinance Program is not meant to save a home from foreclosure. It is meant to give underwater homeowners a chance to refinance without paying PMI. If you need foreclosure help, call your current loan servicer immediately.
If you or someone you know has a question about what these changes mean, call or email me anytime. I’m always happy to help.
Mortgage Advisor, CMP, CMPS