Posted October 6, 2014Tweet
This HARP loan information is accurate and current as of today, October 25, 2014. This post has been updated since its original publish date to reflect changes to HARP 2 and the HARP program.
If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance to today's mortgage rates without paying down principal and without having to pay mortgage insurance.
These are the details of the government's HARP home loan program.
HARP was started in April 2009. It goes by several names. The government calls it the Home Affordable Refinance Program.
The program is also known as Making Home Affordable, the Obama Refi, A Better Bargain For U.S. Homeowners, DU Refi Plus, and Relief Refinance.
In order to be eligible for the HARP refinance program :
If you meet these two criteria, you may be HARP-eligible. If your mortgage is an FHA, USDA, VA or a jumbo mortgage, you are not HARP-eligible.
Underwater USDA loans can be refinanced via the USDA Streamline Refinance program, which is available in most states.
Yes, everything you are reading is accurate as of today, October 25, 2014. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011. HARP 2.0 was formally released by Fannie Mae and Freddie Mac March 17, 2012.
Yes, the names HARP and Making Home Affordable are interchangeable. The program is also known as DU Refi Plus and Relief Refinance, and many mortgage lenders call it "The Obama Refi".
No, the HARP loan is not the same as the White House's A Better Bargain for Responsible Homeowners program. HARP is a specific mortgage refinance product. The "A Better Bargain" program is the White House's recommended set of mortgage market reforms. The changes suggested by the White House may later manifest as HARP 3, but we don't know when HARP 3 will pass, if ever.
Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.
No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance. Click here to verify your HARP eligibility.
It's possible that your mortgage is backed by Wells Fargo, but the more likely answer is that Wells Fargo is just your mortgage servicer; the bank that collects your payments. Wells Fargo backs very few of its own loans. Most loans for which payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie Mac. Double-check with Fannie Mae and Freddie Mac before assuming Wells Fargo backs your loan.
Bank of America does back some of its own loans, but the more likely answer is that Bank of America is your mortgage servicer; the bank that collects your monthly mortgage payments. Bank of America backs very few of its own loans. For most loans for which payments are sent to Bank of America, Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae and Freddie Mac to make sure Bank of America doesn't hold your loan.
There is a chance that Chase backs your loan, but what's more likely is that Chase is just your mortgage servicer; the bank that collects your payments each month. Chase backs very few of its own loans. For most loans for which payments are sent to Chase, you'll find that Fannie Mae or Freddie Mac are the actual loan-backers. Double-check with Fannie Mae's and Freddie Mac's websites to make sure your loan is not held by Chase.
Your mortgage statement may have the CitiMortgage logo on it, but that doesn't necessarily mean that CitiMortgage back your loans. It's more likely that CitiMortgage is your mortgage servicer; the bank paid to process your payment each month. With most loans for which payments are sent to CitiMortgage, the actual loan-backer is Fannie Mae or Freddie Mac. Double-check with Fannie Mae's and Freddie Mac's websites to see if you can find your loan.
Yes. You can do the HARP loan with any participating mortgage lender. This is a major change from the original HARP. The government is trying to get as many people access to the program as possible. If you were once turned down for HARP by your original mortgage lender, re-apply somewhere else. You'll likely have better luck. Click here to get access to free HARP rates.
Not all mortgage servicers have loan officers on staff. However, that should no bearing on your ability to get a HARP refinance. You can work with any participating lender in the country.
If neither Fannie nor Freddie has record of your mortgage, your loan is not HARP-eligible. However, you may still be eligible for a "regular" refinance to lower rates. Use this form to get a rate quote to see your options.
"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP mortgage program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however.
"Relief Refinance" is the Freddie Mac equivalent of DU Refi+.
Yes, if you have a 40-year mortgage, you can use HARP. You must make sure that you mortgage is backed by Fannie Mae or Freddie Mac, though, and that you meet all other eligibility requirements.
Not every bank is participating in the HARP 2.0 program. If you've been told that your bank can't or won't help you, just try with a different bank. There are many banks that are participating in the program.
No, HARP 2.0 is not meant for jumbo mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. There had been talk of a HARP 3 program which may have added access to HARP for non-Fannie Mae and non-Freddie Mac mortgages but the FHFA recently said making a HARP 3 program was not a current priority. You can read more about HARP 3.
No, HARP 2.0 is not meant for Alt-A mortgages. It's for mortgages backed by Fannie Mae or Freddie Mac only. Alt-A mortgages were among the loan types rumored to be a part of HARP 3, but HARP appears unlikely to pass at this time. The FHFA has said that the creation of a HARP 3 loan is low-priority at this time.
If your current mortgage is interest only, you may be able to use HARP. If your interest only mortgage is a conforming loan backed by Fannie Mae or Freddie Mac, you should be HARP-eligible. Otherwise, your loan may be an Alt-A or sub-prime mortgage in which case you will not be HARP 2-eligible.
If your current mortgage is a balloon mortgage, you may be able to use HARP. It depends on whether your loan is conforming, and whether it's backed by Fannie Mae or Freddie Mac.
HARP 3 is the supposed next iteration of HARP. It's been referred to as "#MyRefi" and "A Better Bargain For Homeowners" by the White House in various forums dating back to 2011. In May 2014, the FHFA announced that expanding HARP 2 into HARP 3 would be unlikely prior to the program's expiration.
Yes, for the most part, the program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For most people, though, the guidelines work the same.
Yes, you should always compare HARP mortgage rates because they can vary widely from bank-to-bank. You may save a lot of money just by getting a second opinion on your mortgage.
No. You must be current on your mortgage to refinance via HARP.
If you've been turned down for HARP but believe that you're eligible, you can apply with a different bank and see what happens. Different banks are using different variations of the program. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved.
Some banks are enforcing subtle variations of the official HARP program guidelines. The edits are small, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for the HARP loan because of your loan-to-value, apply with a different bank and you may get different results.
Some banks are making variations on the official HARP program guidelines. The changes are subtle, but they're enough to cause some people to get denied who should otherwise have been approved. If you've been turned down for HARP program because of your credit scores, apply with a different bank and you may get a different outcome.
Mortgage rates for the HARP mortgage program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program. Make sure to shop around, then -- just like you would with a non-HARP refinance. Rates can vary by as much as one-half percentage point between lenders.
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have a note date of no later than May 31, 2009, which means that you loan must have funded on, or before, May 31, 2009. And, third, you may not have used the program before -- only one HARP refinance per mortgage is allowed.
Yes, you can use HARP even if you're not "underwater".
No, HARP does not forgive your mortgage balance, nor does it reduce your principal owed. A HARP loan will refinance your current loan balance only. HARP loans work the same as other refinance types in this regard.
No, there are no "date exceptions" for HARP. If your note date is not on, or before, May 31, 2009, you cannot use the program.
There's no official answer for this one but, in March 2012, a Fannie Mae representative said that May 31, 2009 was selected as the HARP cut-off date because that those who financed a home with a mortgage prior to May 31, 2009 may not have been aware of the rapidly changing mortgage market.
No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0.
No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0. The government makes no exceptions on this policy.
No. All homes -- regardless of how far underwater they are -- are eligible for the HARP program.
Yes, you can use HARP even if you're really far underwater on your mortgage. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105%.
Yes, I am sure. The new HARP mortgage program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can have 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.
That's normal, actually. Not every bank will underwrite HARP loans to the letter of the guidelines. Loans with high LTVs can be risky to a bank. Therefore, some banks will limit their business to loans under 125% loan-to-value, for example. Remember -- just because one bank turned you down doesn't mean that every bank will. Apply somewhere else to get a second opinion.
In general, no. As your home increases in value, its loan to-value decreases. So long as your loan-to-value remains above 80 percent, you should remain HARP-eligible. In the event your home's loan-to-value falls below 80%, you may have difficulty finding lenders to refinance your home. As always, remember to shop around. If the first bank you ask says no, it doesn't mean that all banks will say no, too.
No, if you use an ARM for HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.
Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank -- one that won't restrict your loan size.
Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank -- one that won't restrict your loan size.
Sort of. Although your home's value doesn't matter with Making Home Affordable, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value is reasonable, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway -- just to make sure your home is "standing".
No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.
No, you cannot use the HARP 2.0 program for an FHA loan. If your current mortgage is backed by the FHA, and your home is underwater, use the FHA Streamline Refinance program.
No, you cannot use the HARP 2.0 program for a USDA loan. If your current mortgage is backed by the USDA, and your home is underwater, use the USDA Streamline Refinance program.
No, you cannot use the HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA, and your home is underwater, use the VA IRRRL program.
No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages -- not conventional ones. HARP 2 is for conventional mortgages only.
No, you can do a HARP refinance with any participating mortgage lender.
Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender.
No, that's not true. Or, at least it shouldn't be. There are very few instances in which a HARP applicant will be precluded from shopping for the best rate. It's doubtful that your situation is one of them.
Yes, with HARP, you can work with any participating lender in the country.
Except in rare cases, no. With HARP, you can work with any participating lender in the country. And there are a lot of them.
Yes, you can shorten your loan term via HARP. You must still qualify for the mortgage based on payments, though. If the "payment shock" of switching to a 15-year fixed rate mortgage is deemed to steep, your lender may not approve the loan. Be sure to ask.
No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.
No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require an extra step. Remind your lender that you're paying PMI to help the refinance process move more smoothly.
No, it's not true. You can refinance via HARP 2.0 even if your current mortgage has private mortgage insurance.
HARP has many rules and guidelines and all loan officers are up-to-speed on what's going on. If you're hearing that you can't refinance your current mortgage because it has PMI on it, it may be a signal to shop around.
Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI). It's your loan officer's responsibility to make sure that your new mortgage carries, at minimum, the same amount of coverage.
With respect to LPMI, different banks have different rules for HARP. There are banks closing HARP loans with lender-paid mortgage insurance attached. That's a fact. If your bank won't do loans with LPMI, find one that will.
Your loan officer will know what to do. Just make sure you disclose that your mortgage has LPMI at the time of application so your loan officer knows what to do. Otherwise, your loan could be delayed in processing.
To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.
If there is no LPMI disclosure, first check if your first mortgage's loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you're likely carrying LPMI.
There are different types of private mortgage insurance and not all kinds are paid monthly. One such example is lender-paid mortgage insurance for which your lender pays PMI on your behalf each month. You don't see the payments made, but you still have PMI. There are banks that will HARP-refinance loans with LPMI. If your bank says no, ask another bank and you may get a different answer.
With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The key is that the new loan has mortgage insurance coverage at least equal to the mortgage insurance coverage on your current mortgage.
HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.
No, the HARP mortgage program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.
Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.
Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you're an "accidental landlord". The loan must meet typical program eligibility standards.
Yes, you can use the HARP Refinance program for your former residence -- even if there's a renter there now.
There is no specific timeframe for which you're required to stay in your home if you use HARP 2.0. Just like any other mortgage, if you plan to stay in your home post-closing, it's your primary residence. If you plan to turn it into a rental, it's an investment property.
It's possible that the call center representative to whom you're speaking is neither knowledgeable about HARP, nor the actual mortgage underwriting process. This post is researched and cross-referenced against Fannie Mae and Freddie Mac guidelines, and publicly-available reports from the FHFA.
Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.
That's not true. Condominiums can be financed on the HARP refinance program. If your current lender is unable or unwilling to help, remember that you can take your HARP loan to any participating bank in the country. Other banks may know what to do with condos.
No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.
No, the Home Affordable Refinance Program is for first mortgages only. Second mortgages cannot be refinanced via HARP, nor can they be consolidated into a first mortgage.
HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You'll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.
With the HARP refinance program, second liens are meant to subordinate. Second lien holders know this, however, not all second lien holders will agree to it. This is against the spirit of the program, but second lien holders are within their rights to deny the refinance.
No, it doesn't matter if your second mortgage isn't backed by Fannie Mae or Freddie Mac. Second mortgages are ignored as part of HARP. They can't be refinanced, and they can't be consolidated. Second mortgages are a non-factor in HARP 2.0.
Yes, if you have an 80/10/10 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. You can only refinance your first mortgage.
Yes, if you have an 80/20 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements. You cannot combine your two mortgages, however. Only your first mortgage is eligible for Making Home Affordable.
If your current bank is not setup for HARP, find a new lender. HARP is available through any participating bank (and there are a lot of them). Free, no-obligation HARP quotes are available online, too. Click here for live HARP mortgage rates.
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however. In most U.S. markets, this limit is $417,000. In certain high-cost areas, including Orange County, California and Fairfax, Virginia, for example, the limit ranges as high as $625,500.
Yes, according to official HARP guidelines, you can be unemployed and use the HARP loan to refinance. Applicants will not need to be "requalified" on income unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.
HARP mortgages are underwritten like most other mortgages. When income verification is required, you'll often be asked to provide 2 years of W-2 statements, the two most recent years of federal tax returns, and a recent paystub.
HARP does require verification of income, but some lenders may require it anyway. If you cannot (or will not) verify income with your lender, you may show 12 months of PITI in reserves as a substitute for actual verifiable income. PITI stands for Principal, Interest, Taxes, and Insurance. In short, if you can show that you have 12 months of housing payments "saved up", HARP will treat those reserves as "income".
Correct. There are no income restrictions with the Home Affordable Refinance Program. A similar-sounding program, though -- the Home Affordable Modification Program (HAMP) -- does have income limitations. Many people confuse the two.
No. HARP stands for Home Affordable Refinance Program. HAMP stands for Home Affordable Modification Program. Both programs are supported by the Making Home Affordable initiative, but that's about where the similarities end.
If you've used the HAMP program with your current lender to modify your mortgage, you may not be HARP-eligible. It depends on the terms of your modification.
Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely. For example, there are no LLPAs for fixed-rare HARP refinances with terms of 20 years or fewer. For all other loans, loan-level pricing adjustments are capped at 0.75 points.
No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.
No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.
No, you can do a HARP refinance with any participating lender you want.
The HARP refinance is just like any other mortgage -- you'll want to shop around for the best rates and service. However, because HARP is a "specialty loan", you may want to limit your shopping with reputable lenders that know how to specifically handle HARP loans.
Closing costs for HARP refinances should be no different than for any other mortgage. You may pay points, you may pay closing costs, you may pay neither. How your mortgage rate and loan fees are structured is between you and your loan officer. You can even opt for a zero-cost HARP refinance. Ask your loan officer about it.
If you are HARP-eligible, you must close on your mortgage on or before December 31, 2015 -- 432 days from now.
Click here for a HARP rate quote. If the rate looks good, you can accept it. There is no fee for applying.
When you're ready to see today's HARP mortgage rates, click here for mortgage rates.
Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI. If you need foreclosure help, call your current loan servicer immediately.
The information contained on The Mortgage Reports website is for informational purposes only and is not an advertisement for products offered by Full Beaker. The views and opinions expressed herein are those of the author and do not reflect the policy or position of Full Beaker, its officers, parent, or affiliates.
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2014 Conforming & FHA Loan Limits
Mortgage loan limits for every U.S. county,
as published by Fannie Mae & Freddie Mac, and the FHA.