If you are unable to obtain a traditional refinance because the value of your home has declined, you may be eligible to refinance through the Home Affordable Refinance Program (HARP).
HARP is designed to help you refinance into a new, affordable, more stable mortgage. HARP is unique in that it is the only refinance program that enables borrowers, who owe more than their home is worth, to take advantage of low interest rates if their home is already owned by Fannie Mae. You must be current on your Fannie Mae mortgage.
What is HARP 2.0?
The Federal Housing Finance Agency, along with Fannie Mae, recently announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. These refinance options are designed to assist borrowers who have demonstrated an acceptable payment history on their existing Fannie Mae mortgage loan, but may not have been able to refinance due to the value of their home, to obtain a lower payment or move to a more stable product.
The new program enhancements address several key aspects of HARP including:
- Eliminating certain risk-based fees (closing costs) for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers.
- Removing the current 125% loan-to-value ceiling for fixed-rate mortgages (30 years or less) backed by Fannie Mae.
- Eliminating the need for a new property appraisal in most cases.
- Second homes and investment properties will be added to the program, although different rates and fees may apply.
Not sure if your loan is owned by Fannie Mae (FNMA)?
You can find out by using the Loan Lookup Tool at the Fannie Mae website. Enter your address exactly how it appears on your current mortgage statement.