Home Affordable Refinance Program (HARP) Eligibility

Do you know if you are eligible for a Home Affordable Refinance Program or HARP? This type of refinancing can be useful to someone who is able to make payments on their home loan but cannot refinance because their homes value is now less then the outstanding loan amounts. To determine whether you are eligible for the Home Affordable Refinancing Program you need to answer these questions.

First, do you own a 1 to 4 unit home? Anything larger than four units is not eligible for HARP.

Second, is your loan guaranteed by Fannie Mae or Freddie Mac? If you're not sure then you'll need to contact them to find out. If it is then you may be eligible. You can call FMNA at 1-800-7FANNIE and FreddieMac at 1-800-FREDDIE

Third, are you current on your mortgage payments? In other words, you haven't missed any payments or been more than 30 days late on your payments in the last 12 months. If you are current then you may be eligible. If you are not current or have missed payments then you will probably need to look at other options

Fourth, is the amount you owe on your home more than or roughly equal to what your home is actually worth? As long as your first mortgage does not exceed 125% of your homes current value then you may be eligible for the Home Affordable Refinance.

Even if you answered these questions and feel you are eligible for the Home Affordable Refinance Program you will still need to show that you could make the payments under the refinanced terms as well as show that the refinance would improve your long term affordability and stability of your loan.

If you have more than one loan on your property then you'll need to meet a few other conditions for eligibility. The first loan alone cannot exceed 125% of your homes value. Whoever holds the second lien or loan on your property must agree to stay in the second position. If they do not agree then you will not be eligible.

A HARP refinance will not lower your loan balance but rather refinance your current loan to a lower interest rate thereby lowering your monthly payment. Currently the HARP program is set to expire on June 10, 2010.


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