Harp Government Program (Is There a Replacement?)

The Department of Treasury and the Housing Agency launched the Home Affordable Refinance Program (HARP) in 2009 to make the home affordable for citizens. The mortgage is a home loan that enables homeowners whose homes have lost value to refinance to current rates without paying for new mortgage insurance, regardless of their loan-to-value.

HARP has helped many homeowners who had not paid their mortgages to get more stable and affordable mortgages for about a decade. The HARP government program ended on 31 December 2018. Keep reading the article to know more about the HARP government refinancing program.

What is HARP Loan?

As mentioned above, the HARP refinancing program was introduced in 2009 and has many names. The government refers to it as Home Affordable Refinance Program, but others call it Making Home Affordable, DU Refi Plus, and the Obama Refi. The program is also known as A Better Bargain for U.S. Homeowners, Relief Refinance, and harp mortgage.

The 2018 financial crisis led to the plummeting of real estate values. As a result, many homeowners were left with little or no equity and were left owing a higher mortgage than the actual value of their homes. The HARP refinance program gave the underwater property owns a chance to refinance lower mortgage rates.

In addition, they would be able to keep a larger percentage of their money monthly and build equity. Homeowners can refinance their underwater FHA through the FHA Streamline Refinance Program, whereas they can refinance underwater VA mortgages via VA IRRRL. The USDA Streamline Refinance program is available in several states where homeowners can refinance their underwater USDA loans.

Improvements on the HARP Refinance Program

Federal regulators created the HARP program to allow more homeowners who owe more than the value of their properties to refinance their mortgages. Though many borrowers make timely mortgage payments, they cannot enjoy the updated lower mortgage rates due to decreased homes values.

With a Home Affordable Refinance program, homeowners with more balance than the value of home n refinance their first mortgages. Furthermore, the regulators have made the following fundamental changes:

• The refinance program was extended to 31 December 2013
• Homeowners can be underwater and own over 100% of their home’s value
• Homeowners must not be more than 30 days due your mortgage in the last 6 months

HARP Qualifications 2018

Most individuals keep wondering whether they qualify for the refinance program. If you want to know if you are eligible for the HARP program and its application process, you can talk to a nonprofit mortgage adviser from a HUD-approved organization. They will review your financial and mortgage state and explain the best options for you. Additionally, they will outline a plan of action for you to undertake at no charges.

If you are underwater on your conventional mortgage, you can refinance your mortgage to current rates without paying principal or mortgage insurance. Overall, to qualify for the HARP loan:

• Fannie Mae or Freddie Mac must back your loan
• The note date on your current mortgage must not be over 31 May 2009

If you have an FHA, USDA, jumbo, or VA mortgage, you are not qualified for HARP.

Is HARP Refinance Legit?

The HARP refinancing program is legitimate. It was created during the housing crisis to help borrowers with little or no equity refinance their mortgages. In recent years, the steady increase in home values has led to a sharp decrease in underwater homeowners.

Therefore, thousands of homeowners qualify for refinancing programs at today’s lower rates. It is necessary to keep checking your eligibility if you had an underwater loan in the past, as you may have gained equity in the past year.

Alternatives to HARP Government Program

Since the expiry of the harp government program in 2018, other programs like Freddie Mac Enhanced Relief Refinance (FMERR), the Streamline Refinance for FHA, VA, USDA, and Fannie Mae High LTV Refinance program have been developed to assist borrowers in refinancing. However, these HARP replacement programs are unnecessary since property values continue to increase every day.

With the rising home values, homeowners’ equity increases; therefore, they can refinance. Even underwater homeowners who lacked equity in the past years can now be Refi-eligible. So, if you are still paying mortgage rates above the market value, you should know you can refinance to access lower interest rates and monthly payments.

Freddie Mac HARP Replacement

If your Freddie Mac owns your current mortgage, you are eligible for FMERR. The program gives loans to individuals whose loan-to-value ratios are high, meaning they are above the program’s minimum LTV threshold. In addition, other eligibility rules for Freddie Mac HARP replacement program are:

• The current loan should be as from 1 November 2018 onwards
• Your loans must have stayed 15 months since it was originated
• You must not have made late payments within the last 6 months or paid mortgage more than once in the last year

Moreover, FMERR is open to property owners with two homes and investment properties. They can refinance homes with more than one unit using the program. Though fixed-rate mortgages do not have maximum LTV, ARM loans have a maximum LTV of 105%. Freddie Mac’s program expired, leaving Fannie Mae’s loan as the other option.

Fannie Mae HARP Replacement (HIRO)

Individuals with mortgages owned by Fannie Mae qualify for Fannie Mae High LV Refinance program. In addition to this, other eligibility requirements for the

HIRO program are similar to that of FMERR.

They include:

• The current loan should be as from 1 October 2017 onwards
• Your loans must have stayed 15 months since it was originated
• You must not have made late payments within the last 6 months or paid mortgage more than once in the last year
• Requires a minimum LTV ratio of 97.01 for residences occupied by owners and single-family homes
• Fannie Mae’s High-LTV refinance program on properties with 2-4 units is more lenient than Freddie Mac’s. With an LTV of 75.01%, you qualify for the loan program.

Benefits of a High LTV Fannie Mae Program

Some advantages of the refinance option include:

• Processing speed: Lenders can process Fannie Mae high TV refinance more quickly than other refinances
• Eligibility requirements: You do not have to verify your liabilities, income, and assets. Further, the program does not demand a minimum credit rating or maximum debt-income ratio. The simplified documentation requirement streamlines the entire process.
• Mortgage insurance: You do not need private mortgage insurance for your new loan. But if you already had one, you must transfer it to your new mortgage.
• No maximum LTV ratio: The program does not require maximum LTV for fixed-rate mortgages. You can refinance your mortgage regardless of the value of your LTV.
• Lender: You do not need to use your current lender. There are electronic and manual underwriting alternatives to new services, so you can shop for the best high LTV mortgage rates.

Differences Between the New Program and HARP

Relief refinance programs are designed to help homeowners who pay above-the-market rates but have little or no equity to refinance. Like harp government programs, relief programs qualify homeowners to refinance into lower interest rates and monthly payments, making housing affordable.

However, there are some differences between HARP and the new refinancing programs. The new loans eliminate many qualifying requirements for conventional Refi programs. Plus, they are faster and more affordable for homeowners. Secondly, borrowers could only use HARP once. But homeowners can use Fannie Mae high LTV refinance as often as they want. Keep in mind you will not be eligible for the replacement program if you used the HARP mortgage. Additionally, Fannie Mae only refinances loans 15 months older and above, which was not the case for HARP. Lastly, the new programs’ LTV ratio is higher than HARP’s minimum ratio.

FAQS

Is the HARP Replacement Program Legitimate?

Yes, FMERR and HIRO are legitimate HARP replacement programs run by legal mortgage firms. The Federal Housing Finance Agency regulates these agencies, and the programs are available to all eligible homeowners.

What if Neither Fannie Mae nor Freddie Mac has a Record of my Mortgage?

If neither programs have records of your mortgage, your loan does not qualify for the HARP program. However, you may be eligible for other refinancing programs.

Can I Refinance my HARP Loan?

Freddie and Fannie’s guidelines limit individuals who have used HARP programs in the past from using the FMERR and HIRO programs.

What is HARP 2.0 and How Does it Work?

HARP 2.0 is for FMERR and HIRO-backed mortgages. Individuals whose houses are not underwater can also use HARP 2.0. In addition, people with balloon mortgages may be HARP-eligible depending on whether their loans are conforming and backed by Freddie and Fannie.

However, HARP 2.0 is not meant for Alt-A and jumbo mortgages. These two are loan types rumored to be included in HARP 3.0, which has not materialized. It is also worth noting that HARP 2.0 does not forgive mortgage balance or reduce your principal. The program only refinances your current loan.

What is the Bottom Line With HARP Refinances and Mortgage Insurance?

HARP allows everyone to get refinancing, whether they have borrower-paid or lender-paid mortgage insurance. The new loan will have a mortgage insurance value of almost equal to your current mortgage insurance coverage.

Conclusion

HARP government program and today’s HARP replacement refinancing programs have helped homeowners struggling to afford housing. Mortgage rates are still low, so refinancing allows borrowers to pay lower rates and monthly payments. You need to check eligibility requirements for a mortgage refinance to know if you qualify.