For the last nine years, the HARP program has allowed homeowners to get refinance loans with little or no equity in their home, but have loans facilitated through Fannie Mae or Freddie Mac. HARP helps borrowers who are underwater on their mortgage but their LTV (loan-to-value) ratios are equal or greater than 80 percent and haven’t been late on payments in the 12 months prior to refinancing. In August 2017 the Federal Housing Finance Agency (FHFA) announced it was extending the HARP program to December 31, 2018, but that it would expire after that, which is what is happening now.
To replace the popular HARP program, Freddie Mac and Fannie Mae will introduce two High LTV Streamlined Refinance Programs. Fannie Mae’s HARP replacement will be called the High Loan-to-Value Refinance Option, and Freddie Mac’s will be called the Enhanced Relief Refinance.
For both programs, the borrower benefits are:
- Refinance into a more stable and sustainable mortgage that promotes long-term homeownership success.
- Take advantage of expanded LTV ratios for mortgages.
- Potentially reduce principal and interest payment.
For the Fannie Mae High Loan-to-Value Refinance Option, the eligibility requirements are:
- Only an existing Fannie Mae mortgage may be refinanced to a new Fannie Mae mortgage.
- The Note Date of the mortgage being refinanced must be on or after Oct. 1, 2017.
- At least 15 months have passed between the Note Date of the mortgage being refinanced and the Note Date of the high LTV refi mortgage.
- Borrowers must be current with their payments and have:
- No 30-day delinquencies in the most recent six months, and
- No more than one 30-day delinquency in the past 12 months and no delinquency greater than 30 days.
- The mortgage being refinanced must not have been previously delivered as a Fannie Mae DU Refi Plus® or Refi Plus® mortgage.
- Borrowers can refinance using the high LTV refinance option more than once as long as all other requirements, including seasoning, are met.
For the Freddie Mac Enhanced Relief Refinance Option, the eligibility requirements are:
- Only an existing Freddie Mac mortgage may be refinanced to an Enhanced Relief Refinance mortgage.
- The Note Date of the loan being refinanced must be on or after October 1, 2017.
- At least 15 months must have passed between the Note Date of the mortgage being refinanced and the Note Date of the Enhanced Relief Refinance Mortgage.
- The LTV ratio for the new mortgage must exceed the maximum LTV limit for a Freddie Mac standard “no cash-out” refinance mortgage
- Borrowers must be current with their payments and have:
- No 30-day delinquencies in the most recent six months, and
- No more than one 30-day delinquency in the past 12 months and no delinquency greater than 30 days.
- The mortgage being refinanced must not have been previously delivered as a Relief Refinance Mortgage.
- Borrowers can refinance using the Enhanced Relief Refinance offering more than once as long as all requirements, including the 15 months seasoning, are met.
According to HSH.com, the biggest difference between the current HARP program and the new streamline refinance programs is that they don’t have an expiration date to protect the borrower from fluctuations in the housing market. Another difference is you can use the new refinance programs more than once, as long as you are not refinancing a loan that was previously a HARP loan.
If you are interested to find out how these new loan programs can help refinance your home, contact the NASB experts by calling 855-465-0753, or click here.
