HARP, the Home Affordability Refinance Program has finally reached homeowners to assist in the relief of previously high-risk loans with Freddie Mac or Fannie Mae loans. Below is a quick overview of the program and some general qualifications.
Freddie Mac Relief Refinance Mortgages may be available to homeowners with an existing Freddie Mac loan who meet all of the program requirements. This program will reduce an interest rate of the first mortgage, replace an ARM Interest-Only mortgage, or a balloon mortgage with a fixed rate mortgage. There is no minimum credit score requirement, except for a 620 minimum score when the new principal an interest payment is more than 20% greater than the existing payment. The borrower cannot currently be involved in a bankruptcy or foreclosure process.
Freddie Mac Relief Refinance Mortgages are available on residential homes and investment properties as well as second homes, with a limit on the number of financial properties. Loans must be for the same property type as the original mortgage, except in a change of occupancy from a second home or investment to primary residence is allowed. Resort condos and condotels are not allowed.
Income and assets documentation is required and must be verified when the new principal and interest payment is more than 20% greater than the existing principal and interest payment or if funds are needed to pay down the first mortgage, pay off subordinate financing or pay off other debts including judgments.
While there is no limit on the debt to income ratio, there is a 45% maximum when a new principal and interest payment is more than 20% greater than the existing principal and interest payment in the last 12 months.
Fannie Mae DU Refinance Plus may be available to homeowners with an existing Fannie Mae loan who meet all of the program requirements. This program will provide relief from standard mortgage insurance requirements, provide appraisal relief through a property inspection waiver, and should reduce payments or provide a more stable mortgage. 15, 20, 30, and 40- year fixed rate mortgages are available as well as a 5/1, 7/1, and 10/1 ARM Interest-Only mortgage. There is no minimum credit score requirement, however, borrowers must meet the requirements for underwritten loans and standard credit policies will apply for loans outside of the mortgage lender.
Fannie Mae Refinance Plus Loans are available on primary homes and investment properties as well as second homes, with no limit on the number of financial properties. Resort condos and condotels are not allowed.
Verbal occupational verification and one paystub are required for employment verification, and if the applicant is self-employed or works on commission, one-year federal tax return is required. Asset verification is required if the pay off/pay down subordinated financing, or the pay off of other debts, including judgments.
Both of these loan programs are limited to the unpaid principal balance plus accrued interest, actual closing costs, financing costs, pre-payments, and escrows and the borrower may not receive any cash at the time of closing. Freddie Mac Relief Refinance Mortgagees limits accrued interest up to $2,500.
The David M. Damaré Team is available to answer all of your questions concerning the HARP Program. To find out if these programs are right for you or if you qualify, contact The David M. Damaré Team at 919-851-0999.