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What is the HARP?

HARP is the Home Affordable Refinance Program. Announced in March 2009, HARP is a federally funded government program designed to help the 5 million homeowners who currently owe more on their mortgage then their home is currently worth, otherwise known as being underwater or near-underwater, refinance their mortgages into a fixed loan with a lower monthly payment. However, as of Aug. 31, only 894,000 borrowers have refinanced through HARP.

On Oct. 24, 2011, President Obama announced an overhaul to the HARP program with the intent of reaching more underwater homeowners. The expanded HARP program - also referred to as HARP 2.0 - will take 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.

HARP Program Requirements

In order to participate in HARP you need to meet the following requirements:

  • Your home mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
  • You must be current on your mortgage, and cannot have made a payment more than 30 days late in the past year.
  • You must have negative home equity (you owe more on your mortgage than your home is worth), and under the new guidelines your mortgage can now exceed 125% of the value of your home.
  • Refinancing must help the affordability or stability of your mortgage.
  • You must have the ability to continue making payments
  • Mortgages owned or guaranteed by the FHA, VA, or USDA are not eligible for HARP.
  • Your property must be 1-4 units.
  • Your property must also be your primary residence. At this time, 2nd homes are not eligible for refinancing under HARP.