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HARP Refinance Guidelines – Home Affordable Refinance Program


Did you know if your mortgage is less than $625,000, your chances of qualifying for HARP could be high. The Government wants the banks to cut your rates, which puts more money in your pocket.

A soon to expire government program called the Home Affordable Refinance Plan (HARP) could benefit millions of Americans.

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.

When Smart Homeowners use the Better Offers Mortgage Tool, they may be surprised to find out they qualify for a new mortgage or refinance at historically low interest rates.

Home Affordable Refinance Program 2.0

Initiated in April of 2009 by the U.S. Government under the title of ‘Home Affordable Refinance Program’ or HARP.

HARP 2.0 was formally released by Fannie Mae and Freddie Mac March 17, 2012.

In order to be eligible for the HARP refinance program :

  1. Your loan must be backed by Fannie Mae or Freddie Mac.
  2. Your current mortgage must have a note date of no later than May 31, 2009

If your mortgage falls within this category then you may be HARP-eligible. If your mortgage is an FHA, USDA, VA or a jumbo mortgage, you are not HARP-eligible.

By refinancing their homes at lower interest rates, homeowners could easily reduce their monthly payments!

Today’s personalized HARP mortgage rates.

Remember, The Home Affordable Refinance Program is not meant to save a home from foreclosure. HARP is designed to give underwater homeowners that are current on their mortgages a chance to refinance without paying PMI.

Only Fannie Mae and Freddie Mac backed mortgages are eligible for HARP 2.0 Refinance.

How do I check if Fannie Mae or Freddie Mac backs my existing mortgage?

Be sure to check the Fannie Mae and Freddie Mac  Site – Your loan must be listed on one of these two websites to be eligible for HARP.

If I have a Fannie Mae or Freddie Mac mortgage, am I automatically qualified for the Home Affordable Refinance Program?

No, HARP is designed to give homeowners who are current on their mortgage payments, and who have lost home equity, a chance to refinance at today’s low mortgage rates. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.

I make my mortgage payments to a U.S. financial institution or bank such as Wells Fargo or Bank of America,  does that mean I am not eligible for HARP?

It may be possible that your mortgage is backed by Wells Fargo or Bank of America, but the more probable case is that Wells Fargo or Bank of America is actually your Mortgage Servicing company, meaning the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo or Bank of America are backed by either Fannie Mae or Freddie Mac. Double-check with the Fannie Mae and Freddie Mac websites before assuming you’re not HARP eligible.

My lender doesn’t offer me a HARP refinance, Can I refinance under HARP with another lender?

Absolutely, check your HARP loan quotes with any participating mortgage lender. The government is trying to get as many people access to the program as possible. If you were once turned down for HARP by your original mortgage lender, re-apply somewhere else. You’ll likely have better luck. You can work with any participating lender in the country.

Click here to get access to free HARP rates.

Does my current mortgage term affect HARP eligibility?

No, whether you have a 40-year mortgage or 15-year mortgage, you can use HARP. As long as the mortgage is backed by Fannie Mae or Freddie Mac, you may be eligible.

My lender says its not set up for Freddie Mac. How do I do a HARP loan?

Not every bank is participating in the HARP 2.0 program. If you’ve been told that your bank can’t or won’t help you, just try with a different bank. There are many banks that are participating in the program.

Are Jumbo mortgages HARP eligible?

No, HARP 2.0 is not meant for jumbo mortgages. It’s for mortgages backed by Fannie Mae or Freddie Mac only.

Are Interest-Only mortgages HARP eligible?

If your current mortgage is interest only, you may be able to use HARP. If your interest only mortgage is a conforming loan backed by Fannie Mae or Freddie Mac, you should be HARP-eligible.

I’m receiving ads with mortgage quotes from my bank, should I shop around for better rates?

Yes, you should always compare HARP mortgage rates because they can vary widely from bank-to-bank. Deciding between multiple rate and term offers will get you the most savings on a mortgage refinance.

Am I eligible for the Home Affordable Refinance Program if I’m behind on my mortgage payments?

No. You must be current on your mortgage to refinance with HARP.

I was denied a HARP mortgage due to a high Loan-To-Value?

If you’ve been turned down for the HARP loan because of your loan-to-value, apply with a different bank and you may get different results.

Denied HARP mortgage due to a low Credit Score?

If you’ve been turned down for the HARP loan because of your credit history, apply with a different bank and you may get different results.

What is the mortgage rate for a HARP loan?

Mortgage rates for the HARP mortgage program are the same as for a “traditional” refinance. There is no “premium” for using the HARP program. Make sure to shop around because rates can vary between lenders.

Should I shop for the lowest HARP mortgage rates?

Yes, you should shop for the lowest HARP mortgage rates. HARP mortgage rates vary from bank-to-bank and so do closing costs. Talk to at least 2 banks so you can know you’re getting a fair deal.

My current mortgage includes PMI, 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.

Why does my loan representative tell me I can’t refinance with HARP because my current mortgage has PMI?

HARP has many rules and guidelines and not all loan officers take the time to maintain accurate knowledge. If you’re hearing that you can’t refinance your current mortgage because it has PMI on it, it may be a signal to shop around.

My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?

Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI). It’s your loan officer’s responsibility to make sure that your new mortgage carries, at minimum, the same amount of coverage.

With respect to LPMI, different banks have different rules for HARP. There are banks closing HARP loans with lender-paid mortgage insurance attached. If your bank won’t do loans with LPMI, shop around for a different lender that will refinance with LPMI.

For a FREE HARP rate quote CLICK HERE.

Is there a conflict between mortgage insurance and HARP refinance?

With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The important factor is that the new loan mortgage insurance must be at least equal to the amount of the previous mortgage insurance.

Is there a mortgage amount limit under HARP?

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.

Can I utilize a cash-out refinances with HARP?

No, the HARP mortgage program doesn’t allow cash out refinance. Only rate-and-term refinances are allowable.

Can I refinance a second home, investment property or vacation home with HARP?

Yes, second homes, investment rental properties, and vacation properties are eligible for refinance with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.

How long do I have to stay in my house if I use HARP on my primary residence?

There is no specific timeframe for which you’re required to stay in your home if you use HARP 2.0. Just like any other mortgage, if you plan to stay in your home post-closing, it’s your primary residence. If you plan to turn it into a rental, it’s an investment property.

Can I refinance my Condominium with HARP?

Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.

My bank says that condos can’t be refinanced via HARP?

That’s not true. Condominiums can be financed on the HARP refinance program. If your current lender is unable or unwilling to help, remember that you can take your HARP loan to any participating bank in the country. Other banks may know what to do with condos.

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.

Is there a HARP program for second mortgages? My second mortgage is at a high rate and I want to refinance it.

No, the Home Affordable Refinance Program is for first mortgages only. Second mortgages cannot be refinanced via HARP, nor can they be consolidated into a first mortgage.

What happens to my second mortgage when I refinance my first mortgage using HARP 2.0?

HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You’ll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.

My second mortgage company won’t let me refinance my first mortgage via HARP. Can they do that?

With the HARP refinance program, second liens are meant to subordinate. Second lien holders know this, however, not all second lien holders will agree to it. This is against the spirit of the program, but second lien holders are within their rights to deny the refinance.

My second mortgage isn’t backed by Fannie Mae or Freddie Mac. Is that a problem?

No, it doesn’t matter if your second mortgage isn’t backed by Fannie Mae or Freddie Mac. Second mortgages are ignored as part of HARP. They can’t be refinanced, and they can’t be consolidated. Second mortgages are a non-factor in HARP 2.0.

I have an 80/10/10 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/10/10 mortgage, you can use HARP so long as you meet the program’s basic eligibility requirements. You cannot combine your two mortgages, however. You can only refinance your first mortgage.

I have an 80/20 mortgage. Can I use HARP 2.0?

Yes, if you have an 80/20 mortgage, you can use HARP so long as you meet the program’s basic eligibility requirements. You cannot combine your two mortgages, however. Only your first mortgage is eligible for Making Home Affordable.

My bank is not setup for HARP and I want to refinance. What do I do?

If your current bank is not setup for HARP, find a new lender. HARP is available through any participating bank (and there are a lot of them). Free, no-obligation HARP quotes are available online, too. Click here for live HARP mortgage rates.

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 with a high LTV a chance to refinance at today’s low mortgage rates.

What are the minimum requirements to be HARP-eligible?

1) Existing mortgage payments must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months.

2) Existing Mortgage must have a note date of no later than May 31, 2009.

3) Only one HARP refinance per mortgage is allowed.

Will HARP 2.0 ‘forgive’ my mortgage balance?

No, HARP does not forgive your mortgage balance, and HARP does not reduce the mortgage principal owed. A HARP loan will refinance your current loan balance only. This refinance program is not designed to prevent a foreclosure.

My mortgage note date is shortly after the HARP deadline of May 31, 2009. Can I get a waiver or exception for HARP eligibility?

No, there are no “date exceptions” for HARP. If your note date is not on, or before, May 31, 2009, your mortgage is not eligible.

If I refinanced with HARP a few years ago, can I refinance with HARP a second time?

You can only use the HARP mortgage program one time per home.

Is there a loan-to-value restriction for HARP?

No. All homes — regardless of how far underwater they are — are eligible for the HARP program.

My current mortgage amount is greater than the value of my home and I am underwater, can I benefit from HARP?

Absolutely, HARP can benefit high LTV and underwater mortgage owners that are still current with their monthly payments.

My bank denied my request for HARP because my loan-to-value was too high?

There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105%.  Generally, HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.  If your HARP refinance was denied due to LTV, make sure to shop around with other lenders.

The value of my home has been increasing, can I still take advantage of HARP to refinance my home?

As your home increases in value, LTV decreases. In order to remain HARP-eligible LTV must be above 80%. In the event your home’s loan-to-value falls below 80%, you may have difficulty finding lenders to refinance your home. As always, remember to shop around. If the first bank you ask says no, it doesn’t mean that all banks will say no, too.

Can I refinance my Adjustable Rate Mortgage (ARM) with HARP?

If you refinance an ARM with HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment under HARP.

Why does my bank say I’m limited to 105% LTV with my HARP refinance? I want a fixed-rate loan.

If you’ve been turned down for the HARP loan because of your loan-to-value, apply with a different bank and you may get different results.

Will my home require an appraisal with the HARP mortgage program?

Although your home’s value doesn’t necessarily matter for HARP , lenders will run what’s called an “automated valuation model” (AVM) on your home. If the value is reasonable, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal regardless.

I have an FHA mortgage. Can I use the HARP 2.0 program?

No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA and your home is underwater, use the FHA Streamline Refinance program.

Does Ginnie Mae participate in the HARP Refinance program?

No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages — not conventional ones. HARP 2 is for conventional mortgages only.

Do I have to refinance with my current mortgage lender?

No, you can do a HARP refinance with any participating mortgage lender in the U.S.

Can I refinance with HARP and modify my loan terms?

Yes, you can shorten your loan term via HARP. You must still qualify for the mortgage based on payments, though. If the increased payments monthly due to switching to a 15-year fixed rate mortgage is considered too high for your income and ability to repay, your lender may not approve the loan.

I purchased my existing home with a 20% down payment and currently 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.

Is it possible to qualify for HARP while unemployed?

Yes, according to official HARP guidelines, you can be unemployed and use the HARP loan to refinance. Applicants will not need to be “requalified” on income unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.

My lender is asking for income verification. How do I prove income for a HARP loan?

HARP mortgages are underwritten like most other mortgages. When income verification is required, you’ll often be asked to provide 2 years of W-2 statements, the two most recent years of federal tax returns, and a recent pay statements.

I cannot verify income for my HARP loan. What are my options?

HARP does not require verification of income, but some lenders may require it anyway. If you cannot verify income with your lender, you may show 12 months of PITI in reserves as a substitute for actual verifiable income. PITI stands for Principal, Interest, Taxes, and Insurance. In short, if you can show that you have 12 months of housing payments  in savings, this amount may be treated as income or verified ability to repay.

Can I remove my ex-spouse from the mortgage when I refinance?

Yes. With the HARP loan, a borrower on the mortgage can be removed via a refinance so long as that person is also removed from the deed; and has no ownership interest in the home.

Is there a minimum credit score required for HARP?

No, there is no minimum credit score requirement with the HARP mortgage program.

Do I have to stay with my current lender if I refinance?

No, you can do a HARP refinance with any participating lender available.

How can I compare the best rates for HARP?

Use this FREE TOOL to get your personal rate quote to see your options. Just like shopping for a mortgage– you’ll want to shop around for the best rates and service with HARP lenders.

What are the costs to refinance via HARP?

Closing costs for HARP refinances should be no different than for any other mortgage. You may pay points, you may pay closing costs, you may pay neither. How your mortgage rate and loan fees are structured is between you and your loan officer. You can even opt for a zero-cost HARP refinance. Ask your loan officer about it.

My mortgage is not listed on the Fannie Mae or Freddie Mac websites, where do I refinance?

If neither Fannie nor Freddie has record of your mortgage, your loan is not HARP-eligible. However, you may still be eligible for a traditional refinance to lower rates. Use this form to get a rate quote to see your options.

When will HARP 2.0 end?

If you are HARP-eligible, you must close on your mortgage on or before December 31, 2015. This is the scheduled closing of HARP 2.0

How do I apply for HARP?

Just Click here for a HARP rate quote.



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