More Help for Homeowners: HARP 2.0

Photo (cc) by Images_of_Money

Nearly a quarter of mortgage-paying homeowners are underwater, according to the most recent study from data firm CoreLogic. That means more than 10 million Americans owe more money than their homes are worth.

If you’re in that boat – or should we say submarine? – there could be good news. The government recently revamped its Home Affordable Refinance Program (HARP) to make more people eligible for lower mortgage rates. One of the biggest changes to HARP was removing the loan-to-value ratio cap, meaning people who owe more than 125 percent of what their homes are worth may now be eligible.

While the program was officially launched late last year, only now are mortgage lenders geared up to start taking applications.

In the video below, Money Talks News founder Stacy Johnson takes a look at what it takes to qualify. Check it out, and then read on for more about the program’s changes.

Maybe you’ve heard of this program before – it started in early 2009. Since then, it’s helped more than 900,000 homeowners refinance, according to the Federal Housing Finance Agency. Here’s exactly what they’re changing so it will help even more homeowners:

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model);
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to Fannie and Freddie on or before May 31, 2009.

Interested? Here’s a recap of the eligibility requirements…

  1. Fannie/Freddie-backed. The mortgage must be guaranteed by government-sponsored Fannie Mae or Freddie Mac. You can check if yours is online – here’s the Fannie Mae loan lookup and here’s Freddie Mac’s. Check Fannie first, since they’re bigger and more likely to have it. You can also contact your mortgage company.
  2. Be current. You have to be up-to-date with your payments. As Stacy said, this means you can only have “one missed (30-day delinquent) payment in the last year, and none in the last six months.” If you’re not there yet, don’t worry – there’s still time to catch up. The HARP program was extended to run through the end of 2013 instead of having a summer 2012 deadline. So there’s still time to qualify – just make on-time payments until you fit the requirements.
  3. Problem credit? No problem. Timely payments are the big thing with this particular program. There’s no minimum credit score, qualifying income, or appraisal required.
  4. Be underwater, or close to it. This program is specifically designed for underwater homeowners. You can qualify without being underwater, but your mortgage must be more than 80 percent of your home’s market value.
  5. Double-dips OK. People with Fannie Mae loans can refinance through HARP a second time if they took advantage during the first couple of months of the program – between March and May 2009.

You can get the particulars on how refinancing will work by checking with Fannie or Freddie – there’s a lengthy Frequently Asked Questions about Home Affordable Finance section on Fannie Mae’s website. Freddie Mac also has a lot of online resources for HARP and other programs.

Even if you don’t qualify for HARP, don’t give up. There are other options out there, and free help to figure them out – like the 24-hour Homeowner’s HOPE hotline, which offers counseling services from government-approved housing experts. And maybe refinancing isn’t the best solution for you – check out Ask Stacy: Should I Refinance My Home? for some thinking on the math and logistics.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
8 Things I Always Buy at Target
8 Things I Always Buy at Target

I grew up shopping at the original Target store and am a lifelong fan. Here are my favorite purchases.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

8 Products to Reduce Anxiety and Stress
8 Products to Reduce Anxiety and Stress

Current events have you feeling anxious? These Amazon products can take the edge off.

This Type of Social Security Benefit Is Often Overlooked
This Type of Social Security Benefit Is Often Overlooked

The Social Security Administration is not helping certain people get money to which they are entitled, a report says.

15 Amazon Purchases That We Are Loving Right Now
15 Amazon Purchases That We Are Loving Right Now

These practical products make everyday life a little easier.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

11 Things Retirees Should Always Buy at Costco
11 Things Retirees Should Always Buy at Costco

This leader in bulk shopping is a great place to find discounts in the fixed-income years.

Over 50? The CDC Says You Need These 4 Vaccines
Over 50? The CDC Says You Need These 4 Vaccines

Fall is the time to schedule vaccines that can keep you healthy — and even save your life.

The 15 Worst States for Retirees in 2020
The 15 Worst States for Retirees in 2020

Based on dozens of metrics tied to affordability, quality of life and health care, these are not ideal places to spend retirement.

11 Household Items That Go Bad — or Become Dangerous
11 Household Items That Go Bad — or Become Dangerous

When you get the impulse to stockpile these everyday items, pay close attention to their expiration dates.

7 Ways to Boost Your Credit Score Fast
7 Ways to Boost Your Credit Score Fast

Your financial security might soon depend upon the strength of your credit score.

8 Things You Can Get for Free at Pharmacies
8 Things You Can Get for Free at Pharmacies

In this age of higher-priced drugs and complex health care systems, a trip to the pharmacy can spark worry. Freebies sure do help.

The 10 Most Commonly Stolen Vehicles in America
The 10 Most Commonly Stolen Vehicles in America

A new model parks atop the list of vehicles that thieves love to pilfer.

These Are the 4 Best Medicare Advantage Plans for 2020
These Are the 4 Best Medicare Advantage Plans for 2020

Medicare Advantage customers themselves rate these plans highest.

This Is the Cheapest Place to Buy a Used Car
This Is the Cheapest Place to Buy a Used Car

Looking for a good deal on a set of wheels? This should be your first stop.

19 High-Paying Jobs You Can Get With a 2-Year Degree
19 High-Paying Jobs You Can Get With a 2-Year Degree

These jobs pay more than the typical job in the U.S. — and no bachelor’s degree is required.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

26 States That Do Not Tax Social Security Income
26 States That Do Not Tax Social Security Income

These states won’t tax any of your Social Security income — and in some cases, other types of retirement income.

5 Keys to Making Your Car Last for 200,000 Miles
5 Keys to Making Your Car Last for 200,000 Miles

Pushing your car to 200,000 miles — and beyond — can save you piles of cash. Here’s how to get there.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

10 Reasons Why You Should Actually Retire at 62
10 Reasons Why You Should Actually Retire at 62

If you can, here are several good reasons to retire earlier than we’re told to.

5 Things That Make Life More Meaningful for Retirees
5 Things That Make Life More Meaningful for Retirees

Retirees agree: These are the things that give them purpose and fulfillment in their golden years.

7 Surprising Features That Boost Your Home Value
7 Surprising Features That Boost Your Home Value

You can add value to your home without hiring a contractor to do expensive renovations.

Eat These 4 Foods If You Want to Avoid Hearing Loss
Eat These 4 Foods If You Want to Avoid Hearing Loss

Is your diet helping or hurting your hearing?

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.