Some good news that may open up refinancing opportunities for homeowners with little equity or whom are underwater: the Federal Housing Finance Agency, Fannie Mae and Freddie Mac are enhancing the Home Affordable Refinance Program (HARP). We’re calling it HARP 2.0.
HARP (and HARP 2.0) is specific to homeowners whose loans are currently owned by Fannie Mae or Freddie Mac. Here are the program’s details and how to find out if you qualify:
- Firstly, access the Fannie Mae or Freddie Mac sites to determine if your loan is owned by one of the enterprises:
- http://www.fanniemae.com/loanlookup/
- https://ww3.freddiemac.com/corporate/
- Your current mortgage must have been delivered to Fannie Mae or Freddie Mac on or by June 1, 2009
- If you do not have Mortgage Insurance on your existing loan, it will not be charged on the new refinance, even with a Loan-to-Value ratio above 80.0%
What has been expanded:
- Unlimited Loan-to-Value ratios (currently, there is a ceiling up to 125% of your home’s value)
- Waiving the fees for borrowers that choose to take on shorter term mortgages during the refinance (some people do wish to go from a 30 Year Fixed to a 20 Year Fixed, for instance)
- If there is a reliable Automated Valuation Model, a new appraisal report may be waived
- Program extended through the end of 2013
The greatest benefit of the new expanded program is that there is to be no limit in the Loan-to-Value ratio. HARP 2.0 is not yet available, but lenders should start releasing operational details beginning in December, and the new expanded program should be in full effect near the beginning of 2012.
