A new streamlined version of the Home Affordable Refinance Program is due to be launched in October 2017. In the meantime, the existing program has been extended to fill the gap.
The big hurdle with HARP is that it applies only to mortgages guaranteed by Fannie Mae and Freddie Mac. But keep reading, because many homeowners don’t know their loan is guaranteed by one of those, they don’t realize their original lender may have sold on their mortgage in a secondary market. In fact, it doesn’t matter from whom you originally borrowed or what logos are on your mortgage statements, you can only tell whether yours qualifies for HARP by checking. You can do so by using the online look-up tools on Fannie’s website and Freddie’s website – and you must use BOTH to be sure. Another requirement is that your mortgage was originated on or before May 31, 2009.
HARP exists to help those who have little or no “equity” in their homes. Equity is the difference between the amount you owe on your mortgage today and the current market value of your home. So if your home’s worth $100,000 and your mortgage balance is $120,000 you have negative equity, which is often called being “underwater” or “upside down.” In that case, your loan-to-value (LTV) ratio is 120 percent, because you determine your LTV by dividing your mortgage balance by your home’s value by your mortgage balance and moving the decimal point a couple of places to the right.