October 24, 2011

New Refinance Options No Matter How Far Underwater: QUALIFYING CHECKLIST

October 24, 2011

New Refinance Options No Matter How Far Underwater: QUALIFYING CHECKLIST

Homeowners too far underwater to refinance up to now have new hope today. The Federal Housing Finance Agency (FHFA) today announced key changes to their refi assistance program called Making Home Affordable—or sometimes also called Home Affordable Refinance Program (HARP).

Below is a revised refi eligibility checklist for underwater homeowners:

-Condo and single family home loans are eligible.

-Your loan must be owned by Fannie Mae (check) or Freddie Mac (check).

-Your loan must have closed on or before May 31, 2009.

-Your loan balance must be greater than 80% of your home’s value.

-If your new HARP loan is a fixed rate loan, it doesn’t matter how much your loan balance exceeds your home’s value.

-If your new HARP loan is an ARM, your loan balance can’t exceed 105% of your home’s value.

-You must be current on your exiting loan as follows: No late payments for the past six months. Max of one late payment for the past 12 months.

-Your new HARP loan must close by December 31, 2013.

-You don’t have to do a HARP refi with your existing lender. Any lender can do it.

-You can only refi first mortgages into new HARP loans. You can’t combine first and second mortgages, but you can subordinate your existing second mortgage behind a new HARP first mortgage—IF the second mortgage holder approves it.

-Your new HARP loan won’t require mortgage insurance unless your existing loan already had mortgage insurance.

-Your new HARP loan amount is subject to current conforming loan limits.

-Your new HARP loan is for owner-occupied properties.

-If you bought your home as owner-occupied, lived in it for at least one year and it’s now a rental, you can qualify for an owner-occupied HARP loan.

-Your current loan cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May 2009.

EFFECTIVE DATE: Lenders will start implementing these HARP enhancements November 15. Your mortgage advisor can tell you their specific dates, screen you for eligibility, and get your pre-approved while HARP Phase II ramps up.
Further Reference:
FHFA Fact Sheet & Q&A On HARP Revisions
12 Questions On Obama’s Refi Plan
FHFA Removes Refinancing Barriers