On October 24th of 2011, the Federal Housing Finance Authority (FHFA) announced a key update to the already struggling Harp program, entitled HARP 2.0. It has taken a couple of months for my wholesale lenders to interpret the laws regarding this program, and what guidelines they will have in place for you to refinance your home.Basically, the HARP 2.0 program will now let you refinance your home loan, no matter how much upside down you may be. This will save the lenders roughly $8.5 billion in losses, and help rebound an already struggling housing market.
What is the Harp 2.0 Loan exactly?
The HARP, or “Home Affordable Refinance Program”, 2.0 loan is a specific loan program that will allow homeowners who are struggling with their mortgage have the option to refinance their home. It is often geared towards homeowners who have failed to find assistance elsewhere. Generally the homeowner cannot qualify for a traditional refinance because they are struggling too much. The Harp 2.0 loan is generally the only program that will allow them and give them the opportunity to refinance.
How does 2.0 vary from 1.0?
There are two major changes between HARP 2.0 and 1.0. Unlike the previous version, Harp 2.0 allows the borrower with mortgage insurance to qualify for a refinance. This allows more homeowners to apply for the program. The largest difference is that the homeowner is now released of any responsibility for anything that had happened on the first loan. So, say there was a fraud on the underwriting of the first loan. The new lender is not responsible whatsoever. They will only be held accountable if there is any new fraud. This means that more lenders are a little more willing to help out.
Who is now eligible?
With the new changes, there is also now new eligibility. To qualify, you must:
- have a FICO credit score of at least 620 and you must remember that these are full doc loans.
- Homeowners must be able to provide income and assets in order to qualify for the benefits of the reduced payments through Harp 2.0.
- Be owned/guaranteed by Freddie Mac or Fannie Mae.
- Have been previously sold to Fannie Mae or Freddie Mac on or before May 31st, 2009.
- You must not have been previously financed under HARP, unless it was a Fannie Mae loan that was refinanced under Harp between March and May of 2009.
Here are some key points for the Government Rehabilitation Loan Program, A.K.A. Home Affordable Refinance Program, Obama Government Refinance Assistance, or Underwater Government Loan Assistance.
- Little to no upfront costs, no appraisal needed.
- Unlimited Loan to Value.
- Limited documentation needed (as little as 30 days of paystubs).
- Refinance to rates as low as 3.99%.
- No mortgage insurance unless already have.
- Ability to skip next 2 mortgage payments.
Hello, my name is Brian Quigley and I have been in the Denver mortgage industry since 2003. I have been fortunate enough to choose this very rewarding mortgage broker career and help thousands of borrowers over the years. Customer satisfaction is important to me most, and getting my clients to the closing table smoothly. Read More…