The Home Affordable Refinance Program (HARP) was included in the Helping Families Save Their Homes Act The program’s objective is to help those who are “underwater” on their homes, which means that the homeowner owes more than their home is worth. These homeowners must still be current on their mortgage payments. Mortgages eligible are those that are owned or guaranteed by Fannie Mae or Freddie Mac, the two government-sponsored mortgage enterprises which were taken over by the government during the financial crisis. Initially the program was limited to mortgages that exceeded the value of the home by 5.0% (105% loan-to-value). This limit was subsequently raised to 25.0% (125% loan-to-value). Subsequently, the loan-to-value limit was lifted and now anyone who meets the following requirements are eligible to participate, as long as they qualify for the new mortgage —

•To be eligible, you must have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac and sold to those agencies on or before May 31, 2009.

•Having a mortgage that was previously refinanced under the program disqualifies the homeowner from the program, unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.

•The homeowner cannot have missed any mortgage payments in the past six months and cannot have had more than one missed payment in the past 12 months.

Homeowners have two choices with regard to refinancing their mortgages. They can approach their present lender that is servicing their mortgage or go to a new lender. The provision that allows a homeowner to go to a lender of their choice ensures that the program’s rates are likely to remain more competitive. It should be noted that lender participation is voluntary. A homeowner’s present lender is not obligated to refinance a mortgage serviced by them. The present lender can also add additional restrictions or charge a higher rate as compared to other mortgages they originate.

A new lender’s participation is also voluntary and any lender can also add additional restrictions. However with new lenders “competing” for mortgages they are again more likely to become competitive with regard to rates and features.

Any lender can help you determine whether you qualify for this program and whether the loan was guaranteed by or sold to Fannie Mae or Freddie Mac. In addition, these agencies have provided on-line pages in which an individual can look up their loans to determine if the loans are eligible.

It should be noted that while these links will help you determine whether your loan is eligible to be refinanced, Fannie Mae and Freddie Mac will not help you determine whether you qualify for the refinance. For this information you must contact your present lender or any new lender that participates in the program.

If you would like to lower your payments, pay off your mortgage more quickly or move to a safe fixed rate from an adjustable rate mortgage, you are advised to make this contact quickly. While the program does not expire until December 31, 2018, there is no guarantee that rates will continue to remain at these historic lows until the program’s expiration date.