Changes in the Home Affordable Refinance Program

Federal Housing Finance Agency, Freddie Mac and Fannie Mae has announced a series of HARP Changes to Reach More Borrowers. The goal of this new program is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.

The new program enhancement addresses several other key aspects of HARP including:

- Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;

- Removing the current 125% Loan-to-Value ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;

- Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;

- Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and

- Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

Borrowers who owe more as compared to the value of the home will be able to reduce balance owed much faster if they take advantage of today's low interest rates by shortening the term of their mortgage.

Criteria for HARP eligibility:

- 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 payments in the past 6 months and no more than one late payment in the past 12 months.

FHFA, Freddie Mac and Fannie Mae will be issuing a detailed guideline of the new changes in the program to the mortgage lenders and servicers by November 15.  For more information, please visit https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdf