HARP 2.0 FAQ

By Steven Roberts Updated on 1/20/2014

The Home Affordability Refinance Program (HARP) is a refinance program that was created to assist homeowners who are struggling with financial hardships, and seeking more affordable payment plans. The underlying concept of HARP is to prevent the housing market from crashing like in 2008, which led to a severe economic recession. Due to its unique features, many borrowers do not fully understand this beneficial program. 

Do I qualify for HARP 2.0?

Generally, mortgages must satisfy the following three primary criteria in order to be eligible for a HARP 2.0 refinance through Freddie Mac or Fannie Mae:

• Acquired by Fannie Mae or Freddie Mac before June, 1st 2009.
• Must not have been previously refinance through HARP.
• No late payments within 6 months of application and 1 within a year.
• Maximum debt to income ratio of 45% and loan to value ratio of 80%.

Does Fannie Mae or Freddie Mac own my mortgage?

In most cases, borrowers can find out who owns their mortgage by simply asking their lender. Unfortunately, the servicer may not be aware of who holds your mortgage or cannot disclose the information. If this occurs, you can immediately determine whether your mortgage satisfies HARP eligibility requirements by visiting one of the websites listed below to find out:

Fannie Mae Lookup	Freddie Mac Lookup

Can I use Harp If My Loan is Not Owned or Guaranteed by Fannie or Freddie?

Eligibility for HARP 2.0 requires ownership by Fannie Mae or Freddie Mac. If you have a conventional loan, it is likely your lender would sell your loan in a secondary market to Fannie or Freddie for financial security.

What fees are charged under HARP 2.0?

A HARP refinance loan will include standard HARP closing costs, such as application fees, processing charges, appraisal fees if needed, and fees for a title search. They can be subsidized depending on your financial circumstance and they are significantly less than other refinance program fees.

Can HARP 2 reduce my principal mortgage balance?

While this option offers many advantages, performing a HARP 2.0 refinance will not reduce the loan balance. Instead, this program is designed to aid borrowers in acquiring more affordable loans, with more beneficial features, a shorter loan term, or a lower interest rate.

Is there a maximum acceptable loan-to-value ratio for HARP 2.0?

While the original HARP 2.0 program enforced a maximum borrower LTV ratio for fixed-rate mortgages, the HARP 2.0 update removed these requirements. However, adjustable-rate mortgages must have a HARP LTV of 105% or less in order to qualify. In order to determine your loan-to-value ratio, divide the outstanding mortgage balance by the approximate value of your home.

Does HARP 2.0 always require a new appraisal?

HARP 2.0 refinances may require a HARP appraisal under certain circumstances; however, some borrowers may not need one. Consult this issue with your lender to determine if it is necessary.

How do I save money by shortening my loan terms?

As you pay off your mortgage quicker, you will decrease the amount of time that interest is accruing. Overall, the interest paid will be significantly less than before.

Can I refinance through HARP if I have a Second Mortgage?

Under the right circumstances, borrowers can obtain a HARP refinance with a second mortgage, although the second mortgage lender must agree to resubordinate and additional requirements may apply.

Can I pull out cash with a HARP refinance?

Due to your extentuating circumstance, you are asking for government assistance because you cannot make your monthly payments. HARP will not allow you to obtain cash for other spending purposes.

Where do I find HARP certified lenders?

If you would like to refinance through the HARP program, visit our Lender411 Get a Quote page to conveniently receive interest rate quotes from nearby lenders in your region. Start comparing loan offers today and take the first step toward a smart refinance.