All About the Government HARP Program
The U.S. government's Home Affordable Refinance Program, also known as HARP, helps homeowners refinance their home loans after a home's value becomes higher than that of the mortgage. Homeowners apply for the program if they are not behind on mortgage payments but have been unable to get traditional refinancing. HARP is a joint effort between the Department of the Treasury and the Department of Housing and Urban Development.
Homeowners must meet five eligibility requirements to participate in HARP, as of March 2015. The loan must be guaranteed or owned by Fannie Mae or Freddie Mac. Either of these loan agencies must have invested in the loan on or before May 31, 2009. The mortgage must not have been refinanced previously by HARP, unless Fannie Mae refinanced the loan between March and May 2009. The home's current loan-to-value ratio is more than 80 percent. Finally, the homeowner is current on the mortgage and has a good payment history over the previous 12 months of the loan.
Homeowners should contact their mortgage servicer to determine if they qualify for HARP. The loan servicer is the company to which homeowners make mortgage payments. The websites for Freddie Mac and Fannie Mae have lists of lenders participating in this refinancing program, and not all mortgage companies participate in HARP.
Mortgage lenders and servicers guide homeowners through the HARP application process from approval to closing. Homeowners need mortgage and income statements for the company to examine. If a lender declines an approval, mortgage holders can contact a HARP specialist through Fannie Mae or Freddie Mac, or the person can talk to a different lender to examine the possibilities. Homeowners do not have to stay with their current lender if another company offers better refinancing options through HARP.
This government assistance is scheduled to end Dec. 31, 2015. Mortgage owners should check with a financial professional to find out if they can benefit from this government program before it expires.