HARP Loan Eligibility
There are several reasons as to why a person may not be eligible for HARP even though they have a Fannie Mae owned loan. One of the reasons why a person may not be eligible may be due to the fact that the loan's note date was not on the day of or before May 31, 2009. Confusion usually reigned as HARP 1.0 was unveiled. HARP 2.0 fixed several key points to make millions of people eligible for this critical mortgage lifeline. To be eligible for refinancing, you must qualify under certain conditions.
Eligibility Requirements for HARP
- You must owe 80 percent or more than your home's value.
- The note date of your loan must state that your loan was in fact closed on or before May 31, 2009 (your note date is the day the mortgage was closed).
- You must be current on your mortgage payments, no late payments within the last six months and no more than one 30 day late payment within the last year.
- The home must be considered a primary residence, a 1 unit second home, 1-4 unit investment property. Condos, PUDs and manufactured homes may be eligible.
With the most recent changes made, which was the closing date of a borrower's loan as opposed to the loan being owned or sold to Fannie Mae or Freddie Mac before May 31, 2009 this should help qualify more borrowers moving forward today.
A borrowers note date should be located in the invoice of the final mortgage documents that you signed.
Contact Freddie Mac or Fannie Mae through their websites to verify your loan's origination. The loan needs to be directly owned through these entities or guaranteed on the paperwork. On the website, punch in your loan number to verify your eligibility. If the loan is not part of these two entities, it may not be eligible for a refinance under HARP. You may find that your loan was sold to these two entities by reading your mortgage paperwork. If this is the case, any mortgages sold to the two entities on or before May 31, 2009 should be considered eligible.
Minimum LTV Ratio
If you have equity in the property that gives you an LTV of 80 percent or lower, you may not be able to qualify for HARP. This program is meant for underwater homeowners looking for financial relief. However, an 80 percent LTV or lower makes you eligible for normal refinancing options available at almost every bank.
When the housing market was expanding at a rapid pace, some homeowners refinanced once a year to lower their monthly payments systematically. However, HARP funds are not available for refinancing more than one time. There is only one exception to this rule. HARP funds released between March 2009 and May 2009 may be refinanced again if it was associated with Fannie Mae loans. HARP 2.0 can be used to refinance these specific loans for a better overall package.
HARP helps people that are struggling, but specializes in homeowners that are diligently paying their monthly bills. You cannot have more than one late payment in the past year and the last six months must be paid on time. Current homeowners show good faith that they want to pay down their debt, but its becoming harder each month to afford all the necessities, such as groceries.
Patience Pays Off
HARP 2.0 is an extremely popular program helping millions of people. With the program ending December 31, 2015, you may be concerned about qualifying in time. Apply to the program through an online application or at your lender's facility. It can take as long as 6 to 8 weeks for an application to be evaluated and approved. Until you are contacted, pay your mortgage and maintain your home as best as you can. HARP has helped millions and can help you too.