December 6th, 2018


Since it was launched in 2009, HARP has been making it easier for homeowners who have underwater mortgages to refinance and take advantage of great new mortgage rates without having to incur new mortgage insurance and regardless of their home's loan to value. Anyone who is underwater on their current mortgage should consider giving it some of their attention.

What Is A HARP Loan?

The HARP refinancing loan program is officially known as the Home Affordable Refinance Program and was created to help the millions of homeowners left struggling with mortgages that didn't compare to their home's value.

It's used when you have little to no equity in your home or negative equity - all factors that can make it nearly impossible to get a better refinance rate. Using HARP can help you get lower monthly payments, extra money in your bank account, and more.

What Are The Qualifications For A HARP Loan?

There are really only a couple of basic requirements that must be met in order for someone to take out a HARP loan. These include:

The loan must be backed by Freddie Mac or Fannie Mae

The current mortgage must have been issued prior to May 31, 2009

Loan to Value must be at least 80 percent

No FHA, VA, USDA, or other government-backed loans are eligible

It's important to note that just because your mortgage says that it's from Chase, CitiMortgage, Bank of America, or some other organization, that doesn't mean that the mortgage is actually backed by that company. Instead, these companies are the mortgage servicers and the loan itself is actually backed by either Fannie Mae or Freddie Mac. Checking the Fannie Mae and Freddie Mac websites can help you determine whether or not they are the real backers for your loan.

Another thing to keep in mind is that certain lenders may deny a HARP loan due to LTV percentages, even if they're within the 80 percent threshold. Some lenders simply don't want to take the risk of these loans, and in these cases, you may want to consider applying through a different bank to see if they'll approve you.

Finally, remember that your credit scores could have a direct impact on your ability to get a HARP loan. Different banks have different requirements in place, but the bottom line is that the more attention you give to your credit score, the better.

How Long Do You Have?

The HARP program has helped millions, and there are still hundreds of thousands of homes that likely qualify for assistance through the program. But, the program is ending on December 31, 2018. After that date, you won't be able to take advantage of what HARP could do for you.

Instead, Fannie Mae and Freddie Mac will take over with their own versions of the program starting on January 1, 2019. These programs are very similar to HARP, but with stricter qualification requirements. The main change bumps the LTV requirement from 80 percent up to 95 percent. This means that those who are underwater with their loan may need to act quickly to ensure that they aren't left underwater for good. That increased LTV requirement alone will render thousands of people ineligible for the new programs.

If you currently have an underwater mortgage, it's important to act quickly so you can take advantage of the HARP program and what it offers to you. It could save you thousands, lower monthly bills, and help you improve your financial future in a significant way. Our team is here to help.