In 2009, the Home Affordable Refinance Program was established for Fannie Mae and Freddie Mac loans. It allows home owners to refinance their homes, even if the value of the home has decreased. Homeowners with a loan owned by Freddie Mac or Fannie Mae have the opportunity to refinance with any participating lender. The Home Affordable Refinance Program (HARP) has been extended until December 31, 2013.
The following criteria must be met to qualify for the Home Affordable Refinance Program:
1. HARP refinances apply only to Fannie Mae or Freddie Mac mortgages.
2. The homeowner must be able to afford the new lower payment.
3. The current mortgage must be current with no late payments in the past twelve (12) months.
4. Payments on the new loan must be more stable than on the existing loan.
5. The maximum loan to value (LTV) cap has been removed on home owners looking to refinance in to a fixed rate mortgage. It was originally set at 125%.
6. Homeowners can refinance with an adjustable rate mortgage (ARM), so long as the maximum LTV does not exceed 105%.
A participating HARP lender can determine if a loan is owned by Fannie Mae or Freddie Mac and can further evaluate eligibility.
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