HARP, the acronym for Home Affordable Refinance Program, is a financial aid program announced by the US federal government in 2009 to help millions of homeowners who are either near-underwater or underwater (means you have zero - or even negative - equity in your home) to refinance into a fixed loan with lower monthly payments.
The modified HARP program - HARP 2.0, also referred to as The Making Home Affordable Program, the DU Refi Plus Program, and/or the Obama Refi Program - is specifically targeted towards Washington homeowners having a loan-to-value ratio less than 125 percent.
However, an additional guideline change to HARP 2.0 actually lifted the loan-to-value restrictions. So, Washington borrowers with a loan-to-value ratio even greater than 125 percent can now apply to this program.
HARP 2.0 gives Washington homeowners the ability to refinance at today's low mortgage rates without private mortgage insurance, exorbitant closing costs and fees, and in most cases without an appraisal. If you have been turned down before for this program, you will certainly want to re-apply for HARP 2.0.
In order to qualify for HARP assistance, the basic eligibility requirements are:
Unfortunately, Washington homeowners rarely know who "owns" their mortgage loan. Normally, homeowners receive their monthly statements, and make their monthly payments, to their mortgage servicer. This is usually not the company that provided the funds originally to make the loan.
You can check "lookup" forms on the Fannie Mae and Freddie Mac web sites. However, keep in mind that these web forms are not always accurate as the address would have to be exactly the same as was recorded with Fannie or Freddie.
USDA, FHA or Jumbo mortgages are NOT HARP-eligible.
The most noticeable and major changes in the HARP 2.0 program are:
Elimination of underwater limits which implies that Washington borrowers now have the opportunity to refinance regardless of the fallen values of their homes, whereas loan-to-value limits were previously prefixed at 125 percent.
Underwriting and appraisals have been eliminated and homeowners need neither appraisals nor their loans underwritten. This makes the refinancing process much faster and smoother.
Fees have been modified for shorter-term loans or abolished and the deadline for getting a HARP refinance has now been stretched to Dec. 31st, 2015.
Your Next Step...
Getting approved for a HARP 2.0 refinance involves the following steps: