The Home Affordable Refinance Program (HARP) has been extended until December 31, 2015 and allows homeowners to refinance into low mortgage interest rates even if the property has decreased in value.
A HARP Refinance addresses situations where the homeowner's property value has fallen causing them to no longer qualify under traditional underwriting criteria. Homeowners with a loan owned by Fannie Mae or Freddie Mac may have the opportunity to refinance with any participating lender regardless of their current loan to value.
Although there are programs for both Freddie Mac and Fannie Mae loans, South Florida Educational Federal Credit Union (SFEFCU) only participates in the Fannie Mae program. If you have an existing Freddie Mac loan, you may want to contact your existing lender and inquire as to their participation in the HARP program.
Established in 2009, for Fannie Mae and Freddie Mac, HARP provides an option for homeowners to refinance "Under Water Mortgages". New HARP Mortgage Program Guidelines were announced October 24, 2011.
The following criteria must be met to qualify for HARP:
- A HARP refinance only applies to Fannie Mae or Freddie Mac mortgages.
- For a Fannie Mae HARP refinance, the mortgage must be an existing Fannie Mae loan obtained prior to May 31, 2009 and the existing loan cannot have already been modified.
- The HARP refinance must provide a benefit to the borrower in the form of a reduced mortgage payment, a reduced interest rate, a reduced term or a more stable product.
- The homeowner must be current on the mortgage at the time of the refinance with no late payments in past 6 months and no more than one late payment in the past 12 months.
- A minimum credit score and/or debt ratio requirement apply in cases where the monthly payment will increase by 20%. This normally applies when refinancing into a shorter term loan.
- The residence may be a single family, townhouse or condominium; however condominiums must be on the Fannie Mae approved project list.
- The residence may be the primary residence, a second home or an investment property (reserve requirements apply to second homes and investment properties).
- No subordinate financing is included.*
The maximum Loan to Value (LTV) cap has been removed on home owners looking to refinance in to a fixed rate mortgage. However for homeowners looking to refinance into an adjustable rate mortgage or a fixed-term of 40 years, the maximum LTV is set at 105%.
HARP does not allow for cash payouts. The loan amount is based solely on your existing Fannie Mae loan balance, closing costs plus $250.
Credit Union members need to contact their existing lender and obtain specific requirements for consideration of a subordination request. SFEFCU will provide members with copies of required documentation from our loan file. Members need to submit a request for approval to their existing lender and will be responsible for providing the Credit Union with the executed subordination agreement. Please be aware that some lenders charge a fee to process subordination requests and turnaround times vary by lender.
Go to www.fanniemae.com/loanlookup
to determine if your loan is owned by Fannie Mae. As a participating Fannie Mae lender SFEFCU can help you further evaluate your eligibility. Call our Mortgage Lending Center at 305-270-5256 for more information.
*Process for subordination requests from other lenders