HARP, also known as the Home Affordable Refinance Program, is a federal program that was designed to help homeowners that are behind on their mortgages and need to refinance them. It was founded by the U.S. government in an attempt to protect at-risk Americans from foreclosure. The program can be very beneficial to owners that have encountered financial trouble. Applicants for the program must pass some qualifying criteria before refinancing is granted. Along with the criteria described below, there may be additional requirement places on homeowners by their mortgage provider.
It is necessary for a mortgage to be guaranteed by either Freddie Mac or Fannie Mae. If you are through a lender other than them, do not assume that you are not qualified for HARP assistance. Freddie Mac and Fannie Mae are linked to most mortgages but, because they do not deal directly with the public but, instead, work through lenders. Check with your direct mortgage provider to see if the mortgage is connected to Freddie or Fannie.
If your mortgage is guaranteed or owned by Freddie Mae or Fannie Mac, you are not automatically qualified for HARP. The mortgage must have been sold to Freddie or Fannie on or before March 31, 2009. Any mortgage sold to them afterwards will not be included in the HARP program. It is also essential that the mortgage was never refinanced under HARP before, unless it was done so by Fannie Mae between March and May of 2009.
Financially, there are also a few requirements placed upon the homeowner. The current loan-to-value ratio must be more than 80%. A loan-to-value ratio indicates how much of the property is being financed. A non-real estate example is if your car is worth $10,000 and your loan for the car is $8,000, the loan-to-value ratio would be 80%. The applicant must also be current on the mortgage at the time of application and prove that they have made regular payments for the past year.
If you believe that the HARP program is right for you, contact your mortgage provider to find out if they are connected to Fannie Mae or Freddie Mac. The program is set to end December 31, 2015.