The Home Affordable Refinance Program (HARP) is an alternative financing structure that is meant to allow people who are up-to-date on their mortgages to stabilize their home purchase through refinancing. HARP is meant to focus on helping people who are unable to get traditional financing because of the declining market value of their property.
In order to be eligible for a HARP refinance package, you must meet all of the following criteria:
- You must be current on your mortgage.
- You must have a mortgage that is guaranteed or completely owned by either the Fannie Mae or Freddie Mac.
- You must have sold the mortgage to either Fannie or Freddie before or on the date of May 31, 2009.
- Your payment history for the most recent year must be near perfect.
- Your current LTV ratio must exceed 80%.
It should be noted that most new HARP loans cannot have been refinanced under the program previously. There is an exception for Fannie Mae loans that were refinanced between March and May of 2009.
The HARP program is also meant to help military veterans and people who have recently become unemployed. If you meet all of the eligibility requirements, the program encourages you to get in touch with a HARP representative directly in order to find the best way to help you refinance. Instructions for contacting one of these representatives can be found on the U.S. government's official HARP website at MakingHomeAffordable.gov.
In order to participate in the HARP program, you must first ask the service provider of your mortgage whether it participates in the program. You must obtain this information before December 31, 2015, when the program is slated to end.
Steps to Refinancing
First, use the Loan Lookup Tools for either Fannie Mae or Freddie Mac to determine if your mortgage is guaranteed or owned by one of these companies. The Loan Lookup Tools can be found at MakingHomeAffordable.gov.
Make sure that your current mortgage service provider is approved by either Fannie Mae or Freddie Mac. All borrowers are encouraged to compare the costs and the rates of HARP with other mortgage companies to ensure they will be getting the best terms.
Documents You Will Need
You will need documents that show the accredited market value of your home in order to determine if your LTV ratio is eligible. You will also need documents that prove that your recent mortgage payment history is good.