Perhaps in past news publications, you heard about the Federal HARP (Home Affordability Refinance Program). It was announced in 2009 to help 5 million underwater or near-underwater homeowners refinance into a fixed loan with a lower monthly payment. Despite a good effort, the first try did not work.
There were many roadblocks that made it difficult for homeowners to refinance. For example, the program only assisted those with mortgages with a loan-to-value ratio between 80 percent and 125 percent, but in many hard-hit housing markets across the country, homes have lost more than 50 percent in value making those homeowners ineligible for the program. Crested Butte and Gunnison were much like these hard-hit areas, making it hard for homeowners to qualify for the program resulting in more short sales and foreclosures.
On December 1, 2011, President Obama announced a new version of the program. Welcome HARP 2.0. This newly expanded program is here to help 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.
Here are the guidelines if you are curious if you qualify or not:
- You cannot have made more than one late payment in the last 12 months, and none in the last 6 months
- The loan amount cannot exceed current conforming loan limits.
- Your existing loan closed prior to May 31, 2009. If you took advantage of HARP 1.0, you do not qualify.
- Second mortgages are allowed, however, you must have the second’s approval.
- Second homes and investments are eligible.
- You cannot use HARP if you have a FHA Loan. Try the FHA Streamline Refinance Program.
- There is 105% loan-to-value limit if HARP is used to refinance an adjustable rate mortgage or an Option ARM.
- Loan is guaranteed by Fannie Mae or Freddie Mac. This is has nothing to do with who you make your mortgage payments to. To find out if your is guaranteed, check Fannie Mae and check Freddie Mac.
I know that the market has been a rollar coaster. We have all lost value and precious equity in our homes and investments. Hang in there and take a hard look at HARP 2.0.
If you think you might be eligible, reach out to me. I would be happy to put you in touch with some local lenders that might be able to help.