HARP Refinance
What Is HARP?
HARP was started in April 2009 and is known as the Home Affordable Refinance Program.
In order to be eligible for the HARP refinance program :
1. Your loan must be backed by Fannie Mae or Freddie Mac.
2. Your current mortgage must have a securitization date prior to June 1, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.
HARP: Questions and Answers
1. Is "HARP" the same thing as the government's "Making Home Affordable" program?
Yes, the names HARP and Making Home Affordable are interchangeable.
2. How do I know if Fannie Mae or Freddie Mac has my mortgage?
In order to know which has your mortgage, you should use the “lookup” forms on each website. It is advisable to check Fannie Mae and then Freddie Mac because Fannie Mae has a larger market share.
3. If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?
No, it is only a prequalification. Once that has been established you will go through additional requirements.
4. My mortgage is held by Fannie/Freddie. Now what do I do?
Find a recent mortgage statement and give that information to your lender when you apply for your HARP refinance.
5. My mortgage is backed by Wells Fargo, Bank of America, or Chase. Am I eligible for HARP?
It's possible that your mortgage is backed by any of these banks, but the more likely answer is that each bank is just your mortgage servicer; the bank that collects your payments. Wells Fargo, Bank of America, and Chase back very few of its own loans. Most loans for which payments are sent to Wells Fargo, Bank of America, or Chase are backed by either Fannie Mae or Freddie Mac. Double-check with Fannie Mae and Freddie Mac.
6. My lender won't do HARP. Can I use HARP with another lender?
It depends on the lender. However, with HARP 2, you can use any HARP-participation lender to get your refinance done.
7. My mortgage is serviced by Cenlar or Seterus. Cenlar and Seterus don’t do mortgages. Am I eligible for HARP?
Cenlar and Seterus are mortgage servicers. It does not offer new mortgages -- even for HARP. However, that has no bearing on your ability to get a HARP refinance. You can work with any participating lender in the country so reach out to your favorite bank and get started from there.
8. What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?
In that case, your loan is not HARP-eligible. However, you may still be eligible for a "regular" refinance to lower rates. Or, if your mortgage is insured by the FHA, use the FHA Streamline Refinance program. The FHA Streamline Refinance helps underwater homeowners, too.
9. I have a jumbo mortgage. Can I use HARP 2.0?
No, HARP 2.0 is not meant for jumbo mortgages.
10. I have an Alt-A mortgage. Can I use HARP 2.0?
No, HARP 2.0 is not meant for Alt-A mortgages.
11. I have an interest only mortgage. Can I use HARP 2.0?
If your current mortgage is interest only, you may be able to use HARP. If your interest only mortgage is a conforming loan backed by Fannie Mae or Freddie Mac, you should be HARP-eligible. Otherwise, your loan may be an Alt-A or sub-prime mortgage in which case you will not be HARP 2-eligible.
12. What is HARP 3?
HARP 3 is the next adjustment of HARP. It's currently in talks in Congress. There is no expectation for when, or if, it will be passed. HARP 3 is rumored to include all of the loan types and borrowers who are specifically excluded from HARP 2.
13. Does HARP work the same with Fannie Mae as with Freddie Mac?
Yes, for the most part, the program is the same with Fannie Mae as with Freddie Mac. There are some small differences, but they affect a tiny portion of the general population. For everyone else, the guidelines work the same.
14. My bank sent me a HARP rate quote. It looks like a high interest rate. Should I shop it around?
Yes, you should always shop HARP mortgage rates because they vary so widely from bank-to-bank.
15. Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP.
16. I've been told by my bank that I'm not eligible for HARP. I think my bank is wrong. Can I get a second opinion?
If you've been turned down for HARP but believe that you're eligible, apply with a different bank and see what happens.
17. My lender denied my HARP mortgage because my LTV is too high. What do I do?
Different banks are using different variations of the program. If you've been turned down for HARP 2.0, just try with a different bank.
18. My lender denied my HARP mortgage because credit scores are too low. What do I do?
Different banks are using different variations of the program. If you've been turned down for HARP 2.0, just try with a different bank.
19. What are the HARP program's mortgage rates?
Mortgage rates for the HARP mortgage program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program.
20. Should I shop for the lowest HARP mortgage rates?
Yes, you should shop for the lowest HARP mortgage rates. HARP mortgage rates vary from bank-to-bank and so do closing costs. Talk to at least 2 banks so you can know you're getting a fair deal.
21. Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
22. What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the program before -- only one HARP refinance per mortgage is allowed.
23. My home is not underwater. Can I still use HARP 2.0?
Yes, you can use HARP.
24. I have more than 20% equity in my home. Can I still use HARP 2.0?
No, you home equity must be less than 20%.
25. Will HARP 2.0 "forgive" my mortgage balance?
No, HARP does not forgive your mortgage balance, nor does it reduce your principal owed. HARP refinances your current loan balance.
26. My mortgage was securitized shortly after the HARP deadline of May 31, 2009. Can I get a waiver or exception?
No, there are no "date exceptions" for HARP. If your loan was not securitized on, or before, May 31, 2009, you cannot use the program.
27. My mortgage closed in May 2009 but wasn't securitized until after the June 1, 2009 cutoff date. Can I get a waiver or exception for HARP 2?
No, there are no "date exceptions" for HARP. If your loan was not securitized on, or before, May 31, 2009, you cannot use the program.
28. Why was the date May 31, 2009 chosen as the HARP deadline?
There's no official answer for this one but, in March 2012, a Fannie Mae representative said that May 31, 2009 was selected as the HARP cut-off date because that those who financed a home with a mortgage prior to May 31, 2009 may not have been aware of the rapidly changing mortgage market.
29. If I refinanced with HARP a few years ago, can I use it again for HARP II?
No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0.
30. I refinanced into a HARP loan a few years ago, but my bank never told me it was a HARP loan. I feel like I was lied to. Can I use the program again under the HARP II?
No. You can only use the HARP mortgage program one time per home. If you used HARP 1, you cannot use HARP 2.0.
31. Is there a loan-to-value restriction for HARP?
No. All homes are eligible for the HARP program.
32. I am really far underwater on my mortgage. Can I use HARP?
Yes. There is no loan-to-value restriction under the HARP mortgage program so long as your new mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP to refinance into an adjustable-rate mortgage, your loan-to-value is capped at 105%.
33. If I refinance with HARP using an ARM, do I still get "unlimited LTV"?
No, if you use an ARM for HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV treatment.
34. Why does my bank say I'm limited to 105% or 125% LTV with my HARP refinance? I want a fixed-rate loan.
Not all banks are honoring the HARP 2.0 mortgage guidelines as they are written and one common "edit" is to change the maximum allowable LTV. You may want to get a HARP rate quote from another bank.
35. Will my home require an appraisal with the HARP mortgage program?
Although your home's value doesn't matter for the HARP mortgage program, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway to ensure your home is up to standards.
36. Is HARP the same thing as an FHA Streamline Refinance?
No, the HARP mortgage program is administered through Fannie Mae and Freddie Mac, while the FHA Streamline Refinances are performed through the FHA.
37. I have an FHA mortgage. Can I use the HARP 2.0 program?
No, you cannot use the HARP 2.0 program for an FHA loan.
38. I have a USDA mortgage. Can I use the HARP 2.0 program?
No, you cannot use the HARP 2.0 program for a USDA loan.
39. I have a VA mortgage. Can I use the HARP 2.0 program?
No, you cannot use the HARP 2.0 program for a VA loan.
40. Does Ginnie Mae participate in the HARP Refinance program?
No, Ginnie Mae does not participate in the HARP Refinance program.
41. Do I have to HARP refinance with my current mortgage lender?
No, you can do a HARP refinance with any participating mortgage lender.
42. So, I can use any mortgage lender for my HARP Refinance?
Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender.
43. My current bank says that they're the only ones who can do my HARP Refinance. Is that true?
No, that's not true.
44. My current mortgage is with [YOUR BANK HERE] and I don't like them. Can I work with another bank?
Yes, with HARP, you can work with any participating lender in the country.
45. My bank says I can't get a HARP loan unless I work with them. Is that true?
Except in rare cases, no. With HARP, you can work with any participating lender in the country.
46. I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.
47. I pay PMI now. Will my PMI payments go up with a new HARP refinance?
No, your private mortgage insurance payments will not increase. Be sure to remind your lender that you're paying PMI to help the refinance process move more smoothly.
48. My bank says I can't refinance with HARP 2.0 because I have PMI. Is that true?
No, it's not true.
49. Why does my loan officer tell me I can't refinance with HARP because my current mortgage has PMI?
That is not true. If you're hearing that you can't refinance your current mortgage because it has PMI on it, that's a signal that you're working with sub-optimal loan officer. You may want to shop around.
50. My current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?
Yes, you can refinance your mortgage via HARP 2.0 if your current loan has lender-paid mortgage insurance (LPMI).
51. I have no idea what that means. How do I choose my PMI "coverage" when I refinance a HARP loan that has LPMI?
Don't worry about it. Your loan officer will know what to do. Just make sure you disclose that your mortgage has LPMI so the bank knows what to do. Otherwise, your loan could be delayed in processing.
52. How do I know if my mortgage has Lender-Paid Mortgage Insurance (LPMI)?
To find out if your mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork from closing. There should be a clear disclosure that states that your mortgage features LPMI, and the terms should be clearly labeled for you.
53. I don't see an LPMI disclosure in my closing package but I think that I have it. How do I know if my mortgage has LPMI?
If there is no LPMI disclosure, first check if your first mortgage's loan-to-value exceeded 80% at the time of closing. If it did, look to see if you are paying monthly mortgage insurance. If you are not paying monthly PMI, you're likely carrying LPMI.
54. What's the bottom line with HARP refinances and mortgage insurance?
With HARP, regardless of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid mortgage insurance (LPMI), a refinance is possible. The key is that the new loan has mortgage insurance coverage at least equal to the mortgage insurance coverage on your current mortgage.
55. What if my lender won't give me a HARP refinance because I have mortgage insurance?
If your lender tells you that you can't have a HARP 2.0 loan because you have mortgage insurance, find a new lender. There are plenty that of banks that can and will help.
56. What's the biggest mortgage I can get with a HARP refinance?
HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500.
57. Can I do a cash-out refinances with HARP?
No, the HARP mortgage program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.
58. Can I refinance a second/vacation home with HARP?
Yes. The loan must meet typical program eligibility standards.
59. Can I refinance an investment/rental property with HARP?
Yes. You can refinance a home on which you're an "accidental landlord". The loan must meet typical program eligibility standards.
60. I rent out my old home. Is it HARP-eligible even though it's an investment property now?
Yes, you can use the HARP Refinance program for your former residence even if there's a renter there now.
61. How long do I have to stay in my house if I use HARP on my primary residence?
There is no specific timeframe for which you're required to stay in your home if you use HARP 2.0.
62. Are condominiums eligible for HARP refinancing?
Yes, condominiums can be financed on the HARP refinance program, however, arrantability standards still apply.
63. My bank says that condos can't be refinanced via HARP?
That's not true.
64. Can I consolidate mortgages with a HARP refinance?
No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only.
65. What happens to my second mortgage when I refinance my first mortgage using HARP 2.0?
HARP 2.0 is meant for first liens only. Second liens are meant to subordinate. You'll get to replace your first mortgage and your second mortgage will remain as-is. Just be sure to mention your second mortgage at the time of application so your lender knows to order the subordination for you.
66. My second mortgage company won't let me refinance my first mortgage via HARP. Can they do that?
With the HARP refinance program, second liens are meant to subordinate. Second lien holders know this, however, not all second lien holders will agree to it. This is against the spirit of the program, but second lien holders are within their rights to deny the refinance.
67. My second mortgage isn't backed by Fannie Mae or Freddie Mac. Is that a problem?
No, it doesn't matter if your second mortgage isn't backed by Fannie Mae or Freddie Mac.
68. I have an 80/10/10 mortgage. Can I use HARP 2.0?
Yes, if you have an 80/10/10 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements.
69. I have an 80/20 mortgage. Can I use HARP 2.0?
Yes, if you have an 80/20 mortgage, you can use HARP so long as you meet the program's basic eligibility requirements.
70. My bank is not setup for HARP and I want to refinance. What do I do?
If your current bank is not setup for HARP, find a new lender.
71. Can I "roll up" my closing costs with a HARP refinance?
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however.
72. I am unemployed and without income. Am I HARP-eligible?
Yes, you do not need to be employed to use the HARP mortgage program. Applicants do not need to be "requalified" unless their new principal + interest payment increases by more than 20%. If the new payment increases by less than 20%, or falls, there is no requalification necessary.
73. What is the maximum income that a HARP applicant is allowed?
The HARP refinance program has no maximum income limits.
74. Is HARP the same thing as HAMP?
No. HARP stands for Home Affordable Refinance Program. HAMP stands for Home Affordable Modification Program.
75. I used HAMP with my current lender. Can I use HARP now?
If you've used the HAMP program with your current lender to modify your mortgage, you may not be HARP-eligible. Ask your current servicer if you're HARP-eligible.
76. I am now divorced. I want to remove my ex-spouse from the mortgage. Can I do that with HARP?
Yes. With HARP, a borrower on the mortgage can be removed via a refinance so long as that person is also removed from the deed; and has no ownership interest in the home.
77. Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?
Yes, HARP mortgages use loan-level pricing adjustments, but LLPAs are dramatically reduced on a HARP refinance and, in some cases, waived entirely.
78. Does a HARP Refinances require LLPAs for a 15-year fixed rate mortgage?
No, there are no LLPAs for 15-year fixed rate mortgage via the HARP Refinance program.
79. Is there a minimum credit score to use the HARP program?
No, there is no minimum credit score requirement with the HARP mortgage program.
80. Do I have to refinance my mortgage with my current lender?
No, you can do a HARP refinance with any participating lender you want.
81. My current lender tells me that if I want to do a HARP refinance, I have to go through him. Is that true?
No, it's not true. You are allowed to do a HARP refinance with any HARP-participating lender.
82. My bank called me for a HARP refinance. The rate seems high. Should I shop around?
Yes, it's always a good idea to shop for the best combination of mortgage rates and loan fees.
83. Where can I get the lowest rates on HARP loans?
The HARP program is just like any other mortgage -- you'll want to shop around for the best rates and service.
84. What are the costs to refinance via the HARP program?
Closing costs for HARP refinances should be no different than for any other mortgage. It depends on your loan officer and how the loan was structured.
85. My lender tells me that my loan was denied because of an EA-II Approval. What does that mean?
EA-II is an automated mortgage approval code. It stands for Expanded Approval (Level II) and means that the loan meets the program's eligibility standards, but that the file's combined risk is too high to be approved. Some lenders will accept EA-II findings for a HARP loan. Many more will not.
86. My lender tells me that my loan was denied because of an EA-III Approval. What does that mean?
EA-III is an automated mortgage approval code. It stands for Expanded Approval (Level III) and means that the loan meets the program's eligibility standards, but that the file's combined risk is too high to be approved. Some lenders will accept EA-III findings for a HARP loan. Many more will not.
87. I have a 40-year mortgage. Can I use the HARP program?
Yes, if you have a 40-year mortgage, you can use HARP. You must make sure that you mortgage is backed by Fannie Mae or Freddie Mac, though, and that you meet all other eligibility requirements.
88. My lender says it’s not set up for Freddie Mac. How do I do a HARP loan?
Not every bank is participating in the HARP 2.0 program. If you've been told that your bank can't or won't help you, just try with a different bank.
89. When does the HARP program end?
If you are HARP-eligible, you must close on your mortgage prior to January 1, 2014.
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