What is HARP Program? Home Affordable Refinance Program
The Obama Administration’s Home Affordable Refinance Program (HARP) is designed to assist homeowners in refinancing their mortgages – even if they owe more than the home’s current value. Under the unique HARP program, mortgage lenders will refinance the existing home loan to a value equal to 138 percent of your home’s actual value. By doing so, the mortgage lender will be getting fixed mortgage rate and there will be no fluctuations in the interest rates.
This Harp Program gives more than 9 million struggling homeowners the option of refinancing at a 4.5% fixed rate. Here are some of the rules for HARP Program:
Some of the eligibility requirements for HARP are:
• The borrower’s mortgage must be owned by Fannie Mae or Freddie Mac
• The home must be the borrower’s primary residence
• The borrower must be current on their mortgage with no late payments in the last 12 month period
• The new loan must lower the borrower’s monthly payments
The amount remaining on the mortgage must be for less than $729,500.
The home mortgage must have been closed on and finalized before January 1, 2009.
The homeowner must live in the home to be refinanced as a primary residence.
Personal income levels must be verified through the use of tax returns or pay stubs.
A letter of “Financial Hardship” written and signed by the mortgage holder is needed. Hardships may include loss of income, job, high medical bills or other unexpected or extreme expenses leading to financial hardship.
The homeowner must agree to get credit counseling if monthly debts, including the mortgage, exceed 55% of the homeowner’s gross monthly income.
HARP Program Availability
The HARP program is offered by many servicers. Homeowners should check with their mortgage servicer (the company to which homeowners make their mortgage payments) to determine if they are participating in HARP. If their mortgage servicer is not participating, the homeowner may contact other lenders that participate in HARP to determine if they are eligible for a refinance.