Underwriting Requirements Relaxed
What’s new: A more relaxed view on foreclosure and bankruptcy rules; meaning your HARP loan could be approved, regardless of how recently a borrower filed bankruptcy or experienced a foreclosure.
What that means for you: As previously stated, you won’t be counted out for a mortgage late when that could normally eliminate your ability to get refinanced at the lowest rates available. Also, normally, if you filed for bankruptcy or experienced a foreclosure you would have to wait years before you could successfully refinance. Not anymore with HARP 2.0.
Relaxed Condominium Requirements
What’s new: Previously, HARP eligibility required that no more than 10% of units in the complex be owned by one person and that no more than 20% of owners in the complex be behind on their Home Owner’s Association dues. These requirements are now removed.
What that means for you: More condo owners will now qualify for HARP. If you own a condo, your qualifying for the HARP program is no longer dependent on your neighbors’ finances.
What’s new: The federal government has authorized the use of computerized appraisals, using algorithms and electronic databases of property data to determine a property’s value. HARP 2.0 replaces the obligatory appraisal with this computerized model of a home’s value, called an Automated Valuation Model (AVM).
What that means for you: Using AVMs for valuation will save homeowners the cost of a professional appraisal and speed the refinancing approval process. If the value meets reliability standards, no physical appraisal will be required. So, whether you owe 110% or 300% of the current value of your home, you should still be able to refinance to a lower rate without an appraisal standing in your way. In some cases an actual appraisal may be required- just to make sure your home is “standing”.
Investment and Second Homes
What’s new: Due to the new guidelines, investment property owners can refinance an investment/rental property or a secondary home with HARP, even if the home was once their primary residence.
What that means for you: This program isn’t just for your primary residence. You can refinance another property HARP 2.0. So essentially you can refinance a home on which you’re an “accidental landlord” via HARP – even if there is a renter there now.