The HARP or Home Affordable Refinance Program was created by the Obama administration in June of 2009 and has become a great resource for homeowners wishing to refinance with government assistance. The HARP program has several nicknames including the Obama Refi plan, Making Home Affordable Program and Relief Refinance. In the questions below you may run across these terms, which is why it is important to understand that these terms and the HARP program are one in the same.
Essentially the HARP program works with homeowners who had their mortgage loan through the Freddie Mac or Fannie Mae financial institutions, and whose current mortgages are dated prior to June 1st of 2009. If a homeowner meets these two requirements, they may be able to participate in the HARP program and refinance a mortgage without a principal down payment or requiring mortgage insurance.
HARP is fairly new and the newest version of the plan (HARP 2, released in March of 2012) was released to further help homeowners obtain an easy refinance. However, because of the program’s latest improvements and recent introduction into the government housing programs, HARP has several questions surrounding it. To help, we’ve compiled our list of the most frequently asked questions you, our readers and clients, ask our loan officers about HARP 2.
- How Can I Know if Freddie Mac or Fannie Mae Hold my Mortgage?
As a prequalified requirement for the HARP program, homeowners must have their mortgage backed by either the Freddie Mac or Fannie Mae financial institutions. To find out if your mortgage is held by one of these, we encourage searching their website for “lookup” forms. These forms list the mortgages held by each organization. Be sure to check Fannie Mae’s site first because they tend to hold more mortgages than Freddie Mac. Keep in mind that having a mortgage held by either of these institutions prequalifies you for the Home Affordable Refinance Program, but does not necessarily mean you are instantly eligible. You will need to talk with an expert loan officer to ensure you meet the programs remaining requirements.
- What if My Mortgage is backed by Another Bank like Wells Fargo, Chase, Bank of America or CitiMortgage?
A mortgage statement may have your bank’s name at the top, but in most cases, these banks do not back their own loans. More often than not, these banks are mortgage servicers, which are in charge of collecting mortgage payments. These loans are actually backed by the larger institutions such as Freddie Mac or Fannie Mae. It is still suggested to search these larger institution’s “lookup” forms.
- What is the Next Step after Determining My mortgage is held by Fannie/Freddie?
Following the discovery of a mortgage held by Freddie Mac or Fannie Mae, homeowners are encouraged to find a recent mortgage statement and give it to a mortgage lender when applying for the HARP refinance. Be sure to indicate which of the two (Fannie or Freddie) your mortgage is held by.
- What if my loan is not held by Fannie Mae or Freddie Mac?
If a mortgage is not backed by either of these two institutions, it means a homeowner cannot qualify for use of the HARP program. However, they may wish to explore other refinance options through government programs such as the FHA or VA.
- Can HARP Prevent Home Foreclosure?
The Obama Refi plan was not created to halt or delay foreclosures. However, refinancing can sometimes prevent foreclosure.
- What does HARP Define as the Minimum Requirements of Eligibility?
HARP requires three minimum standards of eligibility.
- The home mortgage loan will need to have been paid on-time for the past 11 months.
- The home mortgage must have been sold to Fannie or Freddie before the June 1st 2009 cut-off date.
- Homeowners must not have participated in the HARP program with the same mortgage previously.
- Can I qualify for HARP regardless of employment?
It is not required of homeowners to be currently employed to utilize the HARP government program; however, they may need to re-qualify if their principal and interest payments increase beyond 20%.
We hope our list of your questions has helped clarify the HARP government program, and we encourage you to ask us more of your questions in the comments or by calling our experts at 1.888.407.0010