Health & Fitness
HARP Loan Program Q &A
Chip Poli, CEO of Poli Mortgage Group, Inc. discusses the new HARP loan program.
What is the new HARP loan program all about?
HARP stands for Home Affordable Refinance Program and its purpose is to make credit available to the millions of American home owners that have had trouble taking advantage of the record low interest rates available due to the value of their homes decreasing too far for conventional refinancing. The new HARP program has some additional features that the first release did not have. It aims to reduce the current and future foreclosure rates and delinquency rates. It also could move an entire segment of the mortgage market to a more stable product.
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What is the maximum loan to value ratio allowed in order to qualify for the HARP loan program?
Originally, to qualify for the HARP loan program the maximum mortgage amount that could be refinanced was equal or lesser than 105% of the current market value of the property. Under new rules offered by the Federal Housing Association, in conjunction with Freddie Mae and Fannie Mac, there is no limit to the loan to value ratio for fixed rate mortgage up to 30 years. However, every lender can put their own overlays on the product as they see fit. Generally, as long as the mortgage is currently owned by Fannie Mae or Freddie Mac, the loan amount is within the qualifying loan limit, and you qualify from an income and credit standpoint you are eligible for the HARP loan. However, it is important for you to talk to a professional Loan Officer familiar with all the new rules of this program to assure you qualify.
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Who is eligible for a HARP loan?
Homeowners that are current on their mortgage and have not had any mortgage delinquencies on the existing mortgage in the most recent six month period, and no more than one 30-day delinquency in months 7 – 12. One 30 day late payment won't disqualify a home owner as long as it happened between months 7 and 12. Your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And lastly, you may not have used the HARP mortgage program before -- only one HARP refinance per mortgage is allowed. The types of home eligible include owner occupied 1-4 unit properties.
When can I apply for a HARP loan?
Now! The guidelines and operational regulations were issued to mortgage lenders in mid-November and most lenders began underwriting HARP mortgages in early December.
