Fannie & Freddie HARP

The Federal Housing Finance Agency (FHFA) and the Department of the Treasury introduced the HARP program in early 2009 as part of the Obama Administration’s Making Home Affordable program. HARP & now HARP 2.0 as it is becoming referred to as, provides MA borrowers a mortgage weapon in this long housing market war.

Which MA borrowers may be eligible for an enhanced HARP?

In general, MA borrowers must meet the following criteria:

  • 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.
  • Minimum representative credit score of 620 if payment is increasing more than 20%.
  • Maximum DTI ratio of 45% if payment is increasing more than 20%.

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  • There is no longer a maximum LTV  (loan to value) limit for borrower eligibility. If the borrower refinances under HARP and their new loan is a fixed rate mortgage, there is no maximum LTV.
  • You can now utilize this program if you have a second mortgage. You can just keep the 2nd mortgage on title and refinance the first.

What is this program useful for?

  • Reduction in the borrower’s monthly principal and interest payment;
  • Reduction in the interest rate;
  • Reduction in the amortization term; or
  • Movement to a more stable product- such as an adjustable to a fixed

What if I currently have PMI (private mortgage insurance)?

The PMI companies have pledged their assistance to offer options when needing to re-write the PMI. The PMI will remain on the loan if it is currently there, unless the loan to value is under 80%.

Do I need an appraisal?

In most cases no. The lender will run the loan through the automated underwriting system and it will determine if one is required. I find that many single family homes do not require an appraisal to be completed. Appraisals may be required for condos, multi families, and non-owner occupied properties in MA.