The HARP program has allowed some homeowners who have a Fannie Mae- or Freddie Mac-serviced loan to refinance into a low, fixed-rate loan even if they owed up to 125% of the current value of their home.
Now, HARP has been extended through Dec. 31, 2013 and that previous loan-to-value cap has been lifted allowing everyone to take advantage of the current low interest rates, providing they are current on their loan payments.
The new parameters:
- the loan is currently serviced by Fannie Mae or Freddie Mac;
- the applicant is currently on time paying the mortgage with no late payments in the last six months and no more than one late payment in the last 12 months;
- the existing loan closed prior to May 31, 2009;
- the applicant owes more than 80% of the current home’s worth;
- if an adequate value can be obtained from an automated valuation, no appraisal will be required; the amount owed versus the value of the home is not limited;
- the loan can be on a primary residence, a second home or a rental property; and
- the possibility of getting a shorter term loan will be analyzed.
Fannie Mae and Freddie Mac will be sending instructions to lenders by Nov. 15, indicating when the revamped HARP will be available to borrowers. Lenders may start offering refinances under the improved plan by Dec. 1, but timing could certainly vary, according to the FHFA.