The Home Affordable Refinance Program (HARP) is now in its 5th year, but many homeowners still have questions about it. The current version of HARP, dubbed HARP 2.0, is set to continue until the end of 2015.
What is HARP, anyway?
HARP is a program created by the Federal Housing Finance Agency to help borrowers who owe too much on their mortgages relative to what their homes are worth. The program was needed after the housing crisis reduced the value of many borrowers’ homes, leaving a lot of homeowners underwater or nearly so.
With HARP, borrowers of Fannie Mae and Freddie Mac loans are able to refinance their mortgages without having to pay PMI (Private Mortgage Insurance). Under the original rules in 2009, borrowers who owed up to 105% of their homes’ values were eligible to refinance. Under the revised “HARP 2.0” rules in 2011, that limit was lifted.
The government has proposed a new “HARP 3.0” plan, which has not been enacted yet. Under the proposed plan, HARP refinancing would be available to other borrowers besides just those with Freddie Mac and Fannie Mae-owned loans.
Because the HARP program has been ongoing now for several years, the number of mortgages refinanced by HARP has gradually declined. However, the number of HARP loans as a percentage of the total refinancing market has grown. That means HARP as a refinancing option is actually growing in popularity relative to other refinancing programs.
How is HARP different from HAMP?
HARP allows those who have kept current on their mortgage payments the chance to refinance even if they are underwater or nearly so. HAMP, the Home Affordable Modification Program, helps those who are behind on their mortgage payments avoid foreclosure with mortgage modification options.
Our HUD-approved housing counseling is available to any homeowner who thinks HAMP, HARP, or some other program might be able to help them. A certified counselor can answer your questions, like “What is HARP, and how can it help me?” Call today to talk to one of our counselors and we’ll help you come up with the best course of action for your particular situation.