The Home Affordable Refinance Program (“HARP”) is a federal program supported by the Obama administration which can help homeowners refinance their underwater properties. However, there are a couple major hurdles that homeowners must pass before being considered for the program. First, the homeowner’s loan must be with Fannie Mae or Freddie Mac. To determine this, simply go to either Fannie or Freddie’s websites or go to Nevadaharp.com for easy links to both. Second, the loan must have been acquired by either Fannie Mae or Freddie Mac before June of 2009 which a major sticking point for many homeowners. This may not be as big a problem since most homeowners were not able to qualify for a loan until after that time.
Essentially, HARP refinances a homeowner’s existing loan using interest rates to match current market values. While there is no principal reduction option, the remaining balance of the loan becomes incorporated into the new loan at the lower interest rate. A term of 30 years at a fixed rate would achieve the lowest monthly payment possible but 20 and 15 year terms are available as well.
Therefore, homeowners who are underwater that want to say in their homes should consider the HARP program as a way to start their loans over “from scratch.”