NDSU Extension Service - Ramsey County

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HARP for Homeowner Relief

HARP for Homeowner Relief

            The Home Affordable Refinance Program (HARP) is designed for homeowners who have made their payments on time but are underwater on their mortgages. Being “underwater” means they owe more on their homes than the homes are worth. So basically it gives them the opportunity to refinance their home loans.The objective of a refinance under HARP is to provide creditworthy homeowners who have shown a commitment to paying their mortgage the opportunity to get into a new mortgage with better terms.

            Homeowners whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Homeowners who are paying interest only, who have a low introductory rate that will increase in the future, or who face a balloon payment may not see their current payment go down if they refinance to a fixed rate and payment. These homeowners, however, could save a great deal of money by reducing the amount of interest you pay over the life of the loan.

            A homeowner may be eligible for HARP if:

            -The mortgage MUST be owned or guaranteed by Fannie Mae or Freddie Mac

- 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.

-           You have a reasonable ability to pay the new mortgage payments.

For more info on HARP, check out their website at: http://harpprogram.org/index.php

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