The Home Affordable Refinance Program, also known as HARP 2.0, was released in March 2012 and gave borrowers an opportunity to refinance to a lower rate and save on their monthly mortgage costs. Before this program borrowers could owe no more than 125% of the value of their home. The new guidelines have no limit on how much your mortgage debt may exceed our home value.

In April, Freddie Mac and Fannie Mae went further to help borrowers by fine tuning the underwriting process which eases refinance guidelines under HARP 2.0. After just one month into the launch of the program the applications were up by 93% from the fourth quarter of 2011 to the first quarter of 2012. These changes are boosting the number of qualifiers for HARP 2.0. Homeowners who have previously been turned down are encouraged to reapply.

  • Minimum requirements: mortgage must be backed by Fannie Mae or Freddie Mac, must have no late payments for past 6 months and only allowed one late payment from last 12 months; also you must have never used the HARP mortgage program before.
  • HARP is designed to help those who have lost home equity and give them a chance to refinance at today’s low mortgage rates.
  • You cannot have more than 20% equity in your home in order to be eligible for HARP.
  • This program does not help to delay or stop foreclosures.
  • HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.
  • If you use an ARM for HARP 2.0, you are limited to 105% loan-to-value.
  • Loans not eligible include:  FHA, USDA, Jumbo, VA, or Alt-A.
  • If your loan was not securitized on, or before, May 31, 2009, you cannot utilize HARP.
  • The HARP 2.0 program ends  January 1, 2014

Are you considering refinancing? You could lower your interest rate which usually lowers your payments. You can even adjust the length of your mortgage which will reduce the amount you pay. You can also switch from an adjustable-rate to a fixed-rate which will give you a steady interest rate and monthly payments.  Furthermore you can get a fresh adjustable-rate by starting a new loan which may start out at a lower interest rate. Lastly you may do a cash-out refinance, which allows you to receive home equity in a cash payment.