HARP 2.0 – What are the facts and how can I benefit?

HARP is an acronym that stands for the “Home Affordable Refinance Program.”

The program was created in order to let borrowers, who got into a home prior to the housing crisis, refinance their mortgage despite the fact that their home value has decreased since they gained ownership. This program is offered by Fannie Mae and Freddie Mac and you will hear the loan itself referred to as the Refi Plus or DU Refi Plus program and the Relief Refinance Mortgage respectively.

In an effort to help more underwater homeowners, The Federal Housing Finance Agency (FHFA) recently revamped this program, dubbing it: “HARP 2.0″

Here are the requirements of this new program:

1. The loan MUST be owned/guaranteed by either Fannie Mae or Freddie Mac
2. The loan was sold to Fannie or Freddie prior to May 31, 2009 (before the housing crisis)
3. The loan’s current Loan to Value (LTV) is greater than 80%
4. You cannot have missed a mortgage payment in the last 6 months and no more than one time in the past 12 months.

Here are the facts

1. There is no longer a maximum cap on your home’s Loan to Value ratio for fixed-rate mortgages (used to be 125%, Max)
2. Lender Fees dropped by Fannie & Freddie – this means it will be cheaper for HARP borrowers to refinance and even more so for 20-year terms or less.
3. Income Requirements relaxed – you don’t have to qualify under the strict guidelines of conventional financing with HARP 2.0. Lenders are now required to allow borrowers higher Debt-to-Income (DTI) ratios in order to qualify.
4. Minimum credit scores have been dropped to 620.
5. HARP 2.0 is now available for 2nd homes as well as investment properties (was only available for owner-occupied homes).
6. Condominiums are now easier to qualify as certain guidelines that used to make it difficult to approve have been removed.

Our Sister-Company HarpLoanDirect specializes in refinancing under-water homeowners that qualify for this new HARP 2.0 program. For more information, please visit HarpLoanDirect and a HARP loan specialist will be available to assist you.