The Home Affordable Refinance Program application deadline has been extended to December 31, 2015 before it’s set to expire. HARP has also expanded the eligibility criteria for MHA to be able to offer assistance to more struggling homeowners. Initially introduced in 2009 by the Federal Housing Finance Agency and the Department of the Treasury, HARP is designed for borrowers who have little to no equity in their homes or are underwater on their mortgages. It is estimated that there are currently 20,384 HARP eligible loans in New Jersey.
Basic eligibility requirements for borrowers include:
- You are current on your mortgage, with no 30-day+ late payments in the last six months and no more than one late payment in the past 12 months.
- Your loan is owned or guaranteed by Freddie Mac or Fannie Mae and it was originated on or before May 31, 2009. Not sure? Use the Loan Look-up Tools on HARP.gov, or check with a mortgage professional.
- Your current loan-to-value (LTV) ratio is greater than 80 percent. For example, you owe $100,000 on your mortgage and the current market value of your home is $85,000.
Borrowers who had previously applied for HARP refinancing but were denied may also find that the programs 2011 expansion has made more NJ residents eligible to participate. With the current HARP there are:
- No underwater limits. You can refinance regardless of how far your home’s value has fallen. Previous loan-to-value limits were capped at 125 percent.
- No appraisals or underwriting. The refinancing process is faster and smoother now that these two steps are eliminated for most homeowners.
- Less paperwork for you and your lender. Lenders now need less paperwork for income verification, and have the option of qualifying a borrower by documenting that the borrower has at least 12 months of mortgage payments in reserve.