As good news to homeowners who are underwater with their mortgages or struggling to meet financial commitments and still hold onto their homes, the HARP program will be extended through to the end of 2015 per an April announcement from the Federal Housing Finance Authority. The Home Affordable Refinance Program, better known as HARP, was originally established in Spring of 2009 to help homeowners struggling to keep their properties versus foreclosure. The original program was slated to expire at the end of 2011 but it was extended and expanded under HARP 2.0. While the new change created the possibility of a deadline push out to December 2013, the latest changes now extend that date further out.
So far, the HARP program has assisted 2.2 million homeowners already, many who were facing foreclosure or an inability to move at all with a home far underwater in terms of an existing mortgage. The program is still restricted, however, in terms of who can participate. The federal government is only interested in assisting homes financed with loans the government owns through Freddie Mac or Fannie Mae, the two federal underwriting firms that buy mortgages from banks. Further, these loans had to have been owned by the federal government prior to May 31, 2009. The owners also need to be in debt higher than an 80 percent loan-to-value ratio. Those with greater equity can’t participate.
For those who can take advantage of the new HARP extension, it can mean a lower interest rate recalculated at today’s low mortgage rates, it can free up valuable cash flow, or other adjustments beneficial to a homeowner. Homeowners desiring to participate must still find and work with a participating lender. Not all banks and institutions are required to work with the federal government on HARP applications.