2016 is most likely going to be the last year of the HARP® refinance program. Currently, it is scheduled to end on December 31, 2016.
If you are looking for information about the Home Affordable Refinance Program® (also known as HARP® or the Obama Refinance), here is some important information as well as frequently asked questions and answers to some of the most popular questions.
HARP® Refinance Waives Refinance Requirements
The HARP® program was first announced by President Obama in 2009 and was designed to allow people who were underwater to refinance their house and take advantage of lower interest rates. The first version of HARP® was then expanded by relaxing the guidelines to allow even more people to refinance and now millions have benefitted from HARP® 1.0 and HARP® 2.0 programs. Currently, there are rumors of HARP® 3.0, but nothing has been made official as of late January 2016.
In order to be eligible for HARP® 2.0, you must first have your loan owned by Fannie Mae or Freddie Mac. First, check with Freddie Mac to see about your potential eligibility for HARP® here. Then check with Fannie Mae to see about your potential eligibility for HARP® here.
You may be eligible for HARP® if you meet all of the following criteria:
- The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
- The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
- The mortgage cannot have been refinanced under HARP® previously unless it is a Fannie Mae loan that was refinanced under HARP® from March-May, 2009.
- The current loan-to-value (LTV) ratio must be greater than 80%.
- The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.
Are FHA Loans Eligible For a HARP® Refinance?
If your current loan is an FHA-insured loan, you are not eligible for a HARP® refinance – that is the bad news. The good news is that you may be eligible for the FHA streamline program – which offers many of the same advantages as the HARP® program. FHA loans have also become cheaper as a result of a recent announcement by President Obama!
FHA streamline refinances are designed to allow people who currently have an FHA loan to refinance to a lower rate without having to complete the full documentation required for a traditional refinance.
Are VA Loans Eligible For a HARP® Refinance?
As with FHA loans, people who currently have a VA loan are not eligible for a HARP® refinance. That is the bad news. The good news is that very similar to the FHA streamline refinance, the VA streamline refinance may be a great way to refinance into a lower rate and save money on your mortgage. The VA streamline refinance is designed for people who are currently in a VA loan and want to refinance without having to complete all of the paperwork required for a traditional refinance.
2016 HARP® Refinance Frequently Asked Questions
What is the loan amount limit for a HARP® refinance?
HARP® refinances are going to be limited by whatever your loan limits are for conforming loans in your area. In most counties across America, the loan limits are $417,000 – but – many areas have conforming loan limits as high as $625,500. Ask your loan officer what the loan limit is in your area and that will be the maximum loan amount for a HARP® refinance in your area.
Is HARP® for investment properties as well?
Yes, you can refinance an investment property under the HARP® refinance program. You can do it for second homes, primary residences or investment properties.
Are condos eligible for HARP®?
Yes, you can refinance a condo under the HARP® program. Your condo must be “warrantable” which means that there are other rules that apply to your condo – so check with your loan officer whether or not your condo is warrantable and he can help you find out for sure. If your bank says that condos are not eligible for HARP®, call a different bank. Just because one bank can’t do them doesn’t mean another one can’t. HARP® allows for condos, so it is just a matter of finding the right bank.
Can I do HARP® if my 2nd mortgage isn’t backed by Fannie Mae or Freddie Mac?
Yes, you can still do HARP® if your second mortgage isn’t backed by Fannie Mae or Freddie Mac. Under HARP®, second mortgages can’t be refinanced, but they can be consolidated into your first mortgage.
My mortgage is with Bank of America. Am I eligible for HARP®?
Just because you make your mortgage payment to Bank of America doesn’t meant that they actually own your loan. There is a good chance that they are simply servicing your loan and that it is backed by Fannie Mae or Freddie Mac. Check with Fannie Mae first and then Freddie Mac to see if they back your loan – and if either Fannie or Freddie backs your loan, then you are eligible. Also, it doesn’t matter if it is BofA, Wells Fargo, US Bank or any other bank – the answer will be the same. If your loan is owned by Fannie Mae or Freddie Mac, that is the key to being eligible for HARP®.
Find Out If You Are Eligible For HARP®
The simplest way to find out if you are eligible for HARP® is to fill out your information right here and speak with a lender who can possibly help you with getting a HARP® refinance done and get you qualified for the program. Finding out if you can qualify for HARP® is free, only takes a few minutes and can potentially save you thousands over the life of your mortgage. The President has waived the refi requirements and the HARP® refinance program is scheduled to end at the end of 2016 so don’t delay.
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