Home Affordable Refinance Program Loans
Even if your home is "underwater" you may be able to refinance and lower your monthly payments!
The Home Affordable Refinance Program (HARP) is a federal government program that enables qualified homeowners with government-backed mortgages to refinance at today's record low rates.
HARP is available through participating lenders such as New Penn Financial. In addition, New Penn Financial® is one of the few companies able to offer the HARP program to homeowners who may have Mortgage Insurance on their existing mortgage.
Introduced in 2009, the program was designed to help homeowners who owed more than their home was worth to refinance into a new affordable, more stable mortgage. The federal government broadened refinancing guidelines in November 2011 in order to make more homeowners eligible. Even those who did not qualify in the past might be eligible with today's HARP:
HARP restrictions loosened
- The "ceiling" requirement that homeowners owe no more than 125 percent of their home's worth was eliminated
- Some fees were eliminated
- The deadline for refinancing was moved to December 31, 2018
An overview of homeowner requirements
- Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
- You do not have an FHA, VA or USDA loan
- The current loan-to-value ratio on your mortgage must be greater than 80 percent
- No missed mortgage payments in the past six months
- No more than one missed mortgage payment in the past 12 months
Find out if you're eligible
If have been unable to refinance because the value of your home has declined, you may be eligible to refinance through HARP. Call 888-673-5521 to see if you qualify for a HARP refinance loan and get a personalized rate quote.
Don't miss this once in a lifetime opportunity!
More background on H.A.R.P.
The Obama administration developed the Home Affordable Refinance Program (HARP) back in 2009 as a response to the recent collapse of the national housing market. At that time, homeownership had become increasingly unaffordable for citizens across the country, as foreclosure rates began to skyrocket and borrowers increased lending restrictions. As a result, more and more people were falling far behind on their monthly mortgage payments or abandoning dreams of owning a home altogether.
By enacting the HARP loan program, the president intended to help a wide swath of borrowers who had found themselves stuck with a mortgage they could no longer afford. Homeowners with loans from government-secured entities (GSEs) Freddie Mac and Fannie Mae would be able to potentially refinance their mortgages to loans with significantly lower interest rates. The program was intended to keep borrowers in their houses, and improve the national economy by helping people restructure their finances.
Didn't qualify the first time? Big changes were made
The program hit a few initial stumbling blocks. In 2009, when President Barack Obama first announced his plan, he had estimated the initiative would help between 4 and 5 million homeowners attain lower monthly interest payments. However, up until November 2011, the program had only helped a few hundred thousand borrowers refinance their loans. This meant that the ambitious program was probably not ambitious enough.
The program was then rebranded HARP 2.0 after the GSEs and President Obama announced that they would be making key modifications to the program to help a significantly larger audience participate. The changes announced in November 2011 included removing the 125 percent loan-to-value (LTV) cap placed on the kinds of mortgages that were previously eligible for a HARP loan. This meant that borrowers who had applied to refinance their mortgages under the original HARP guidelines, but were rejected, may now qualify.
Underwater on your mortgage? Here's how HARP can help
One of the biggest problems dragging down the housing market has been a dip in home values nationwide. Residents who may have bought their homes before the crash of the housing market have found themselves paying monthly interest on loans that far exceed their current market value. Should these borrowers wish to sell their properties, they would be stuck with a huge loss on their mortgage. Staying in their houses, however, may be increasingly unrealistic for these homeowners, as their monthly interest payments may reflect a financial outlook that was much rosier when they initially signed for their property.
If their loans are from Fannie Mae or Freddie Mac, borrowers may find that the HARP 2.0 program guidelines are now increasingly more inclusive no matter how underwater they are on their mortgages. Even if a homeowner's loan is valued at more than 125 percent of their property value, an underwater borrower with good credit may still qualify for help with this government initiative.
How long will HARP be around? At least until the end of 2018, and the government continues to do more
Since the program was enacted in 2009, HARP loan rates have reached all-time average lows repeatedly. This means that many borrowers who have successfully refinanced their loans through HARP have seen their monthly payments dashed significantly. The program is set to expire by December 2018, assuming that much of the problem with the market will have been solved by that point.
However, the government has continually made strides to increase success in the housing market, meaning that programs like HARP will continue to help the economy move forward. Congress is constantly floating new ideas to stimulate the economy that may be enacted, such as the modifications under HARP 2.0 were. At New Penn Financial, we have experience navigating through these changes and helping homeowners devise plans that can potentially help them get back on their feet.