HARP II Refiance Program : Eligibility Requirements
UPDATE (February 9, 2012) : The government announced changes to its HARP program November 15, 2011. Click Here to Get a Rate Quote
If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance.
Here are the details of the government's new 2011 HARP refinance program.
What Is HARP?
HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.
The program is also known as the Making Home Affordable plan, the Obama Refi plan, DU Refi +, and Relief Refinance.
In order to be eligible for the HARP refinance program :
Your loan must be backed by Fannie Mae or Freddie Mac.
Your current mortgage must have a securitization date prior to June 1, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.
HARP : Questions and Answers
Do these question-and-answers account for the "new" HARP mortgage program?
Yes, everything you are reading is accurate as of today, February 9, 2012. This post includes the latest changes as rolled out by the Federal Home Finance Agency on October 24, 2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011.
Is "HARP" the same thing as the government's "Making Home Affordable" program?
Yes, the names HARP and Making Home Affordable are interchangeable.
How do I know if Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.
If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?
No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
My mortgage is held by Fannie/Freddie. Now what do I do?
Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?
If neither Fannie nor Freddie has record of your mortgage, your loan is HARP-ineligible. However, you may still be eligible for a "regular" refinance to lower rates. Use this form to get a rate quote to see your options. Or, if your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.
Does HARP work the same with Fannie Mae as with Freddie Mac?
Yes, for the most part, the HARP mortgage program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect just a tiny, tiny portion of the general population. For everyone else, the guidelines work the same.
Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP.
Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP mortgage program before -- only one HARP refinance per mortgage is allowed.
If I refinanced with HARP a few years ago, can I use it again for HARP II?
No. You can only use the HARP mortgage program one time per home.
Is there a loan-to-value restriction for HARP?
No. All homes -- regardless of how far underwater they are -- are eligible for the HARP program. Click here for a HARP rate quote.
I am really far underwater on my mortgage. Can I use HARP?
Yes, you can. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use an adjustable-rate mortgage, your loan-to-value is capped at 105%.
Maybe I wasn't clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?
Yes, I am sure. The new HARP mortgage program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.
If I refinance with HARP using an ARM, do I still get "unlimited LTV"?
No, if you use an ARM for HARP, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.
Will my home require an appraisal with the HARP mortgage program?
Sort of. Although your home's value doesn't matter for the HARP mortgage program, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway -- just to make sure your home is "standing".
Is HARP the same thing as an FHA Streamline Refinance?
No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.
Does Ginnie Mae participate in the HARP Refinance program?
No, Ginnie Mae does not participate in the HARP Refinance program. Ginnie Mae is associated with FHA mortgages -- not conventional ones. HARP II is for conventional mortgages only.
Do I have to HARP refinance with my current mortgage lender?
No, you can do a HARP refinance with any participating mortgage lender.
So, I can use any mortgage lender for my HARP Refinance?
Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Click here for a HARP rate quote.
My current bank says that they're the only ones who can do my HARP Refinance. Is that true?
No, that's not true. Or, at least it shouldn't be. There are very few instances in which a HARP applicant will be precluded from shopping for the best rate. It's doubtful that your situation is one of them.
My current mortgage is with [YOUR BANK HERE] and I don't like them. Can I work with another bank?
Yes, with HARP, you can work with any participating lender in the country. Click here for a HARP rate quote.
I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.
I pay PMI now. Will my PMI payments go up with a new HARP refinance?
No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require an extra step. Remind your lender that you're paying PMI to help the refinance process move more smoothly.
My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?
No. If your mortgage has lender-paid mortgage insurance (LPMI), you are HARP-ineligible.
How do I know if my mortgage has Lender-Paid Mortgage Insurance (LPMI)?
To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.
I don't see an LPMI disclosure in my closing package but I think that I have it. How do I know if my mortgage has LPMI?
If there is no LPMI disclosure, first check if your first mortgage's loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you're likely carrying LPMI (and are HARP-ineligible).
What's the biggest mortgage I can get with a HARP refinance?
HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500. You can lookup your area's conforming loan limits by clicking here.
Can I do a cash-out refinances with HARP?
No, the HARP mortgage program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.
Can I refinance a second/vacation home with HARP?
Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.
Can I refinance an investment/rental property with HARP?
Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you're an "accidental landlord" via HARP. The loan must meet typical program eligibility standards.
I rent out my old home. Is it HARP-eligible even though it's an investment property now?
Yes, you can use the HARP Refinance program for your former residence -- even if there's a renter there now.
These things I'm reading here... Why, when I call my bank, do they tell me it's not true?
It's possible that the call center representative to whom you're speaking is neither knowledgeable about HARP, nor the actual mortgage underwriting process. This post is researched and cross-referenced against Fannie Mae and Freddie Mac guidelines, and publicly-available reports from the FHFA.
Are condominiums eligible for HARP refinancing?
Yes, condominiums can be financed on the HARP refinance program. Warrantability standards still apply.
Can I consolidate mortgages with a HARP refinance?
No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be resubordinated to the new first mortgage.
Can I "roll up" my closing costs with a HARP refinance?
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however.
I am unemployed and without income. Am I HARP-eligible?
Yes, you do not need to be employed to use the HARP mortgage program. HARP applicants do not need to be "requalified" unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.
My original mortgage was a stated income loan. Will my income be verified with a HARP refinance?
No, your income will not be verified via the HARP refinance program unless your new principal + interest payment increases by more than 20 percent. If your new principal + interest payment increases by less than 20%, or falls, there is no income verification necessary.
I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?
Yes. With HARP, a borrower on the mortgage can be removed via a HARP refinance so long as that person is also removed from the deed; and has no ownership interest in the home. Click here for a HARP rate quote.
What are the HARP program's mortgage rates?
Mortgage rates for the HARP mortgage program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program.
Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?
Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely. For example, there are no LLPAs for fixed-rare HARP refinances with terms of 20 years or fewer. For all other loans, loan-level pricing adjustments are capped at 0.75 points.
Does a HARP Refinances require LLPAs for a 15-year fixed rate mortgage?
No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.
Is there a minimum credit score to use the HARP program?
No, there is no minimum credit score requirement with the HARP mortgage program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.
Do I have to refinance my mortgage with my current lender?
In most cases, no. You can do a HARP refinance with any lender you want. Click here for a HARP rate quote.
What does the term "DU Refi Plus" mean?
"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP mortgage program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however.
What does the term "Relief Refinance" mean?
"Relief Refinance" is the Freddie Mac equivalent of DU Refi+.
For how long should I lock my mortgage rate via the HARP Program?
Lock for 45 days, at minimum. This is because the HARP mortgage program, while streamlined for simplicity, still has some grey areas that can lead to delay. It's better to have a rate lock that lasts too long than not long enough.
When does the HARP program end?
If you are HARP-eligible, you must close on your mortgage prior to January 1, 2014 --days from now.
How do I apply for the HARP program?
Use this form to get a rate quote. If the rate looks good, you can accept it. There is no fee for applying.
Apply For Home Affordable Refinance Program
When you're ready to see mortgage rates, click here for a free HARP rate quote.
Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI. If you need foreclosure help, call your current loan servicer immediately.