The Reach and Scope of HARP

Since its inception, HARP has helped approximately 2.2 million struggling homeowners refinance their underwater mortgage under more favorable terms, leaving the state of America’s housing market in a much better condition than what it would be without the program.  Beginning in April 2009, the HARP program was initiated by the Federal Housing Finance Agency (FHFA) and the U.S. Department of Treasury as a way to lift the enormous burden felt by many homeowners across the country whose homes had plummeted in worth after the housing market crash of 2008.  While the HARP program did not lower the amount owed on the home, it did lower the rates, making many of the sub-prime and adjustable rate mortgages more stable despite the fact that homeowners could not qualify for refinancing otherwise.

While 2.2 million borrowers is a successful number, the FHFA wants to make sure that even more borrowers take advantage of this great offer within the next few years.  Therefore, the agency has decided to run a public relations campaign across the nation in an attempt to educate more homeowners who might not have heard about HARP, and guide them on how they, too, can participate in this highly successful program.

In order to be eligible to refinance under HARP, the homeowner should not have been late on more than one payment on the mortgage over the past year.  The mortgage must be current and a loan that is financed by Freddie Mac or Fannie Mae, or sold to one of those entities.

One of the best aspects of the HARP program is that there is no maximum loan-to-value (LTV) ratio limit in being determined eligible for the program.  In fact, the LTV must be at least 80 percent before even qualifying for HARP.  However, once borrowers use HARP to refinance their home, and if the new loan has an adjustable rate, the LTV must not exceed 105 percent.