HARP Refinance Guidelines For Underwater Mortgages
This BLOG On HARP Refinance Guidelines For Underwater Mortgages Was UPDATED On November 14th, 2018
Underwater homeowners who are feverishly looking for ways to refinance their home now have the opportunity to do this through the HARP Mortgage program.
- The Home Affordable Refinance Program, known as HARP, allows homeowners with underwater mortgages to refinance their mortgage without income documentation, no appraisal, and bad credit
- It is Fannie Mae and Freddie Mac’s version of FHA and VA Streamlines
- HARP has been extended a few time and is set to expire December 31st, 2018
- However, with interest rates escalating and at the highest rates since 2008, it is doubtful that many homeowners can take advantage of this loan program by December 31st, 2018
Still, there are homeowners with rates in the 7% range and higher that can still take advantage of the Home Affordable Refinance Program.
Eligibility Requirements And Mortgage Guidelines To Qualify
The first step in determining eligibility is to see whether or not your loan is owned by Fannie Mae or Freddie Mac:
- Homeowners can check on our site or go directly to Fannie and Freddie’s website to see if their home loan is owned and/or serviced by Fannie Mae and/or Freddie Mac
- Like many things in life, these databases are not perfect
Homeowners may check their property address against Fannie Mae and Freddie Mac’s databases and be unable to find a match.
Fannie Mae and Freddie Mac to qualify for HARP
However, this does NOT mean that a certain loan is not a Fannie Mae or Freddie Mac.
It also does not mean that you will not have other options.
- Fannie Mae and Freddie Mac have imperfect databases, and errors in data can sometimes cause matches to be elusive
- For example, if homeowner live on 123 Happy Cir and enter your address as “cir” and not “circle”, they may get a different result from one of the two databases
Also, there is talk currently of a new government program that goes further than the HARP program, and addresses loans NOT owned by Fannie Mae and Freddie Mac.
HARP Eligibility Requirements
Homeowners who believe their current mortgage is owned by Fannie or Freddie but you can’t seem to find it on the two sites, here is what we advise you to do at this point:
- Call 1- 888-709-4555 and you will be advised on your options
- In most cases, your servicer is NOT the owner
- This basically means that if borrowers pay Wells Fargo, for example, each month, they are their servicer…not necessarily mean they are not the owner of their loan
- This can be a long and frustrating process but there is light at the end of the tunnel
Will HARP Be Extended Into 2019?
Home Affordable Refinance Program is for homeowners with underwater mortgages. However, many home prices nationwide have increased substantially in value. HARP has been extended until December 31st, 2018. Will there be another extension of the Home Affordable Refinance Program?
Word on the street is that Fannie/Freddie will not be extending HARP. Fannie Mae will be launching a new loan program effective January 1st, 2019.
Fannie Mae’s new mortgage program is the following:
- Alternative refinance loan program on conforming loans
- Requires 95% Loan To Value and homeowners cannot qualify for other conforming refinance program
- Conventional Loans closed on or after October 1st, 2017 are eligible for qualification
- Homeowners need to have made 15 monthly timely payments on their home loan
Homeowners who have closed their conventional loan after September 2017 will be eligible for a higher loan to value refinance mortgage effective January 2019. Homeowners who do not have Fannie/Freddie owned mortgage can qualify for 97% Conventional Loan Programs permits homeowners to refinance their home loans with little equity on rate and term refinances. Regardless, HARP was an extremely popular and successful refinance loan program for homeowners.