The expanded HARP program or HARP 2.0 took effect on December 1, 2011 for borrowers with a loan-to-value ratio of less than 125 percent and in the first quarter of 2012 for borrowers with a loan-to-value ratio of greater than 125 percent. The program was overhauled in an effort to reach more underwater homeowners. Some of the major changes to the HARP program include:
- There are no underwater limits.
Borrowers will now be able to refinance regardless of how far their homes have fallen in value. Previous loan-to-value limits were set at 125 percent.
- Appraisals and underwriting have been eliminated.
Most homeowners will not have to get an appraisal or have their loan underwritten, making their refinance process smoother and faster.
- The fees have been modified.
Certain risk-based fees for borrowers who refinance into shorter-term loans will either be eliminated or modified.
- The deadlines have been extended.
The end date to get a HARP refinance has been extended to Dec. 31, 2013.
- Borrowers with mortgage insurance now qualify for a refinance.
To qualify for HARP 2.0:
- Your mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. To “look up” your mortgage, check Fannie Mae. If you can’t find your mortgage there, check Freddie Mac.
- Have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
- Not have been previously refinanced under HARP, unless it is a Fannie Mae loan that was refinanced under HARP between March and May of 2009
- You need to have a credit score of at least 620, these are “full doc” loans. In other words, homeowners must be able to prove income and assets in order to qualify for the reduced payment.
- Your current loan-to-value ratio on a mortgage also must be greater than 80 percent to be eligible for refinancing. You must be current on payments for the last 12 months. On its site, MakingHomeAffordable points out that these criteria are for guidance only and that interested borrowers should call their mortgage servicers to find out if they qualify. Not all mortgage holders are participating in the program. You must check with your lender to see if they participate.