Can the Home Affordable Refinance Program (HARP) help me?

November 07th, 2011

The Home Affordable Refinance Program (HARP) may offer help to struggling homeowners not otherwise eligible for traditional refinances.

Eligibility requirements

  1. Loan must be owned by Fannie Mae or Freddie Mac.
  2. Property must be your primary residence.
  3. Loan amount cannot exceed 125% of property value.
  4. No mortgage payments more than 30 days late in the prior twelve months.
  5. Amount owed on a first mortgage must be less than $729,750.

How do I know if my loan is owned by Fannie Mae or Freddie Mac?

Your loan servicer bills you every month, but may not actually be owner of your home loan. To determine whether Fannie or Freddie owns your mortgage, simply visit their website using the below links:

  • Fannie Mae: Input the exact property street address and zip code from your mortgage statement. If your query result is negative, proceed to check the Freddie Mac website.
  • Freddie Mac: Input the following information to their secure site:
    • Primary borrower: First and last names, and last four digits of social security number
    • Property: House number, street name, city, state, and zip code

Please note that the websites may return false negatives, so don't be discouraged if the websites respond inconclusively. If you think you may have an eligible "conforming" loan, call your mortgage servicer and ask them if your mortgage is owned by Fannie Mae or Freddie Mac. If they are unable to confirm that, then call Fannie Mae (1-800-7FANNIE) or Freddie Mac (1-800-FREDDIE) directly between 8 a.m. to 8 p.m. EST.

What About Mortgage Insurance? If you do not currently have mortgage insurance, your potential HARP refinance will not require it either. If you do, you'll have to keep your coverage; this may mean that you have to refinance with your current lender.

What About My Equity Line? If you have a second mortgage, home equity line of credit or home equity loan, the owner of that loan will have to agree to subordinate their lien to the new HARP mortgage. Lenders are encouraged to be cooperative in subordinating their second liens in this way.

What Are The Refinance Rates? Refinance rates for HARP are set by the market and vary between lenders. Your risk-based pricing adjustments, however, are capped at 2%. Most lenders only do HARP loans to 105% of your home's value; you may need to do some shopping to refinance at a greater LTV than that. When getting quotes for refinance rates, check potential rates if your new HARP loan exceeds 105% of the home's value.

Use the above information and a refinance calculator to estimate whether a Home Affordable Refinance Program loan may make sense to help you keep your home.

Posted By :

Dennis is co-owner and broker of record for Stratis Financial in Southern California. With over twenty years experience in the mortgage industry he has helped homeowners save millions of dollars refinancing their homes. His Weekly Rate and Market Update keeps his clients and real estate professionals educated and informed on the mortgage industry and the economy. Dennis has a degree in Economics and Political Studies from Pitzer College and is married with two children.

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