| October 21, 2014
As of July 2014, the Home Affordable Refinance Program - otherwise known as HARP - was set to expire within six months.
Still, the Federal Housing Finance Agency estimates that there are currently as many as 200,000 American households still eligible to take advantage of the program in its current incarnation. The FHFA has sought to educate the public through a series of campaign initiatives and town halls, as the number of HARP refinances has steadily dwindled with each passing quarter. But in Chicago alone there are an estimated 36,000 residents who can save thousands over the life of their loan by utilizing the program, and more than 40,000 apiece in the states of Florida, Illinois and Ohio. The program still offers an excellent avenue for reducing monthly mortgage obligations, particularly for families intending to stay in the current homes for the foreseeable future. With interest rates still low by historical standards, that opportunity still exists for many.
Mel Watt, the agency's director, has been championing the benefits of HARP and answering local residents' questions during these town hall gatherings. His goal is to shed some light on the resources and loan modification options available to homeowners across the country, starting by rehashing some of the qualifications for program eligibility.
For HARP, those qualifications include the following:
- Your mortgage is guaranteed by one of the two government-sponsored enterprises, Fannie Mae or Freddie Mac, and was sold to one of the GSEs before May 31, 2009.
- You have not previously refinanced your mortgage under HARP, unless you did so from March through May of 2009.
- Your current home loan-to-value ratio must be greater than 80 percent.
- You are current on your mortgage, with a sound payment history over the past 12 months.
To ensure eligibility, borrowers may consult the government-sponsored site. The FHFA has also introduced an interactive map that displays the number of potentially in-the-money borrowers living in each state. The maps can be further divided into ZIP code, county and metropolitan statistical areas.
What else to know
An in-the-money borrower, according to the FHFA, is one with a remaining balance of $50,000 or more on their home loan, with their outstanding term of more than 10 years. The interest rate on the mortgage must also be at least 1.5 percent greater than the current local market norm, in addition to meeting other basic HARP-eligibility requirements.
There's still time for the FHFA to extend the program through 2016, but HARP-eligible borrowers are encouraged not to waste any time and look into their refinancing options today.