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According to a recent report release by the Federal Housing Finance Agency (FHFA), more than 3 million homeowners have refinanced their mortgage through the Home Affordable Refinance Program (HARP).

Reason for HARP

HARP, introduced in April 2009, was intended to help borrowers owing more than their home was worth to refinance and take on a loan that offered lower interest rates or more stable payments.

Mel Watt, the FHFA Director described the 3 million HARP refinances as “an important accomplishment” that “represents real help” for borrowers affected by the mortgage crisis. He added, “We are continuing our efforts to make sure that those who can take advantage of this program have the information they need to do so.”

Enhancements Made to HARP

In November 2011 the HARP program was expanded in order to qualify more borrowers, and increased the volume of HARP refinances in 2012 as well as after the deadline was extended in 2013.

Enhancements included a higher loan-to-value ratio, as well as greater use of certain automated valuation models in lieu of an appraisal.

The FHFA is reporting that since they were placed in federal government conservatorship, Fannie Mae and Freddie Mac have completed more than 18 million refinances, which includes the 3 million HARPs. And more than 3 million loan modifications, short sales, as well as other foreclosure prevention actions have also been completed.

Basic Eligibility Requirements of HARP

  • Borrowers are required to be current on their mortgage payments. Their record must show no payments more than 30 days late in the last six months and no more than one late payment in the last 12 months.
  • Eligible property types include: primary residence, one-unit second home, and one-to-four-unit rental property.
  • The borrower’s loan must be owned or guaranteed by Fannie Mae or Freddie Mac. The loan must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The current loan-to-value (LTV) ratio is required to be at least 80%. For a new fixed-rate mortgage there is no maximum LTV limit. The maximum LTV for a new adjustable-rate mortgage is 105%.
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