What is Harp 2.0 and How Do I Qualify?

On September 7, 2008, the collapse of two government-sponsored enterprises (GSEs)—the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac)—changed the landscape of the mortgage lending industry completely.

Since then, there has been much effort within the mortgage industry to restructure itself why following stricter guidelines.  This recovery effort includes mortgage lenders and servicers, as well as private mortgage insurers—all seeking to help find ways to increase the number of homeowners who might be able to refinance their mortgage to more affordable interest rates. The Obama Administration’s Home Affordable Refinance Program (HARP) is one such program that is designed to assist homeowners in refinancing their mortgages—even if the mortgage is more than the home’s current value.

Now, the HARP program is in its second stage, and is commonly referred to as Harp 2.0.  Despite the benefits offered in this government program, many homeowners have still not taken advantage of the ability to possibly refinance on much better terms than those they currently have in their mortgage.  In order to qualify, borrowers must meet the following guidelines:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.