HARP 2 was recently announced. This new and improved, completely revamped refinance program is a reworked version of the original HARP program, first launched in 2009. The original HARP program was intended to help more than 9 million U.S. households. However, fewer than 900,000 were able to take advantage of this program.

HARP 2 will be implemented on or before March 2012, and it’s expected to offer:

• Unlimited mortgage debt, no matter what the home is worth today
• No appraisal required in most cases
• Lower fees than with the original HARP program

What is HARP?

HARP, the Home Affordable Refinance Program, was started in April 2009 and goes by several names.  It’s also knows as the Making Home Affordable plan, DU Refi Plus (Fannie Mae owned loans) and Open Access (Freddie Mac owned loans).

Who is eligible for HARP?

In order to be eligible for the HARP refinance program:

1. Your loan must be backed by Fannie Mae or Freddie Mac (contact me to find out)
2. Your current mortgage must have a securitization date prior to June 1, 2009

If your mortgage is FHA, VA, USDA or a jumbo mortgage, you are not HARP-eligible.

If Fannie or Freddie owns my loan, am I instantly qualified for a new HARP mortgage?

No. You must still qualify for the new mortgage with a variety of criteria, including debt-to-income ratios, reserves, and other qualifying information.

Does my credit need to be perfect?

No. You must have a mortgage payment history with no more than one mortgage late payment in the last 12 months and no mortgage late payments in the last 6 months, and you must be current on your mortgage at the time of application and closing.

Is there a loan-to-value limitation for HARP?

No. HARP 2 removes the LTV limit that was in place with the original HARP. All homes, regardless of how far underwater they are, are eligible for HARP 2.

Will an appraisal be done on my home’s value?

It depends. HARP 2 allows for lenders to run an AVM (Automated Valuation Model), which is a computer report on the estimated value of  your home. If the value meets certain standards, a full appraisal will not be required. However, lenders may still choose to require a full appraisal anyway. These are called lender “overlays” and are more restrictive than the underlying program.

Will mortgage insurance be added to my loan?

If you do not pay mortgage insurance now, you will NOT have mortgage insurance added to your loan, no matter how far underwater your loan is.

Can I refinance my rental property?

Yes. Investment properties are allowed, and HARP 2 is expected to have much lower fees for investors.

Can I refinance my second home/vacation home?

Yes. Second homes and vacation homes are also allowed with HARP.

Can I get my HARP 2 loan from any bank?

Not all lenders are offering HARP loans, or they may be offering them on a limited basis.

My bank says this program doesn’t exist or isn’t possible.

It’s also possible that the person you’re speaking with just simply doesn’t know about this program. I’ve personally run across this situation with a major bank where the local senior loan officer wasn’t even aware this program existed.

Can I do a HARP loan more than once?

No. If you already refinanced once using the HARP program, you cannot do the HARP program again (one exception: it will be allowed if it’s a Fannie Mae loan that was refinanced under HARP from March 2009 to May 2009).

When does HARP 2 end?

You must close on your HARP 2 mortgage prior to January 1, 2014. That may seem like a long way out, but it can sneak up on you quick. And we don’t know for sure what interest rates are going to do between now and then. With rates at their historical lows, you should be considering this option sooner than later.

What do I do next?

This new and improved, completely revamped HARP refinance program is intended to give underwater homeowners a chance to refinance without paying mortgage insurance. Contact me to check the eligibility of your home and for more information.