In 2012, the Federal Housing Finance Agency, with Fannie Mae and Freddie Mac have revised the guidelines for the Home Affordable Refinance Program (HARP) in an effort to increase the availability of the program to more homeowners.
This program allows homeowners who owe more than the value of their home to refinance into a new loan with a lower interest rate without having to pay mortgage insurance traditionally charged on mortgages whose loan-to-value exceeds 80%.
Not every consumer who owes more than their home is worth will qualify under HARP's guidelines. Additionally, although both Fannie Mae and Freddie Mac are participating in the program, not every lender is participating. There are many lenders who are not willing to risk writing a new mortgage on a property worth less than the mortgage amount. This is especially true for borrower's whose mortgages are owned by Freddie Mac.
Because of Freddie Mac's less favorable terms and conditions, few lenders are willing to offer high loan-to-value loans for Freddie Mac owned loans. This shortage of lenders leads to less competition and less favorable terms than those for Fannie Mae owned loans. However, the interest rates are still lower than mortgages made prior to May 31st, 2009 and therefore, the Freddie Mac loan is still a great opportunity for consumers.
In order to be eligible for the HARP program, your loan must have been initiated prior to 05/31/2009 and must be owned by Fanne Mae or Freddie Mac. Please note that it is not generally possible to tell whether Fannie Mae or Freddie Mac owns your loan based upon who you make your mortgage payment to. If you would like to discuss a HARP refinance or would like us to check your eligibility, feel free to contact us at (209) 578-9000.