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Summary: The HARP program was rolled out after the previous housing crisis to help homeowners who were underwater on the their mortgages refinance to a new home loan. But that program has now ended. Here’s what you need to know.
The United States government established the HARP program, otherwise known as the Home Affordable Refinance Program, to assist homeowners who are struggling with their mortgage payments.
Initially, the program was founded in March 2009, and it has provided many homeowners with an easier route to adjusting their mortgage payments to make them more affordable. However, the program has since ended, so homeowners are no longer able to take advantage of it.
How Did HARP Help?
The program helped homeowners save an average of $179 every month, and therefore helped them save on the overall mortgage total. Homeowners had the choice to either reduce their monthly mortgage payments or pay down the mortgage sooner by reducing the interest rates. As such, this allowed borrowers to accumulate more equity in their home in a shorter amount of time.
When Did the Program End?
The HARP mortgage program officially ended on December 31, 2018. Anyone who intended to apply for a mortgage under this program must have already done so.
What Were the Requirements?
The HARP program was not suitable for all homeowners who wanted to refinance, and special requirements must have been in place. Just a few of the requirements included that you must have been in good standing with your current mortgage with no late payments within the previous six months.
You also cannot have had more than one late payment within the previous 12 months. In addition, you must have been able to pay for the new mortgage payment, and the mortgage must be a Fannie Mae or Freddie Mac loan. These are just a few of the requirements, and you would need to have worked with a mortgage professional to ensure that you qualify for these and other requirements that are in place.
The HARP program helped many homeowners who struggled with their mortgage payments. While the program offered a permanent solution to homeowners by re-establishing a new mortgage payment amount, the program itself was only intended to be temporary in nature.
What Happened After HARP?
When HARP started to dissipate, Freddie Mac and Fannie Mae came out high loan-to-value (LTV) programs for homeowners facing the possibility of foreclosure. Homeowners looking to take advantage of Fannie Mae’s High LTV refinance program must already have home loans with Fannie Mae.
The Fannie Mae high LTV refinance option allows existing Fannie Mae borrowers to refinance their mortgage. Homeowners who are paying their existing home loan on time but have an LTV ratio that exceeds the maximum may be eligible for a standard cash-out refinance.
Homeowners must refinance in one of the following ways:
- Lower monthly principal and interest payment
- Reduced interest rate
- Shorter amortization period
Freddie Mac also offers a form of relief in the form of its Enhanced Relief Refinance program. Similar to Fannie Mae’s program, Freddie Mac’s program allows homeowners to refinance their mortgage. This program is suitable for those who are making timely mortgage payments with high LTVs.
Ready to Apply For a Mortgage?
Are you considering buying a home some time soon? Sammamish Mortgage can help. We are a local mortgage company serving the broader Pacific Northwest region, including Washington state, Idaho, Colorado, and Oregon. We are proud to offer a wide variety of mortgage programs and products with flexible qualification criteria. Please contact us if you have any questions or are ready to start the mortgage application process.