HARP 3.0

harp 3.0HARP 3.0: Quick Tips and Facts

Owning a home involves more than just finding a willing lender. For example, you have to consider the prevailing interest rate as well as recent changes on the housing market. In most cases, the aforementioned factors affect the amount of money one would need to set aside for mortgage payments. When interest rates go low, homeowners usually tend to refinance their mortgages. In fact, according to the Mortgage Bankers Association, mortgage refinancing is currently at a three-year high. This clearly demonstrates that homeowners are currently taking advantage of mortgage rates that have hit record lows. One refinancing program that borrowers are utilizing is the Home Affordable Refinance Program (HARP 3.0). Keep reading to find out more about this program.


Harp Overview

The aim of this federally funded program is to assist homeowners experiencing financial challenges to refinance their mortgages. Typically, as home prices drop, refinancing through existing programs becomes harder. Moreover, in order to refinance, most lenders require a home to loan-to-value (LTV) of about 80%. However, this may not be possible in a market where some LTV values have risen to more than 100%. Fortunately, HARP 3.0 program is a solution to this problem.



It is important to note that HARP only backs mortgages issued by Freddie Mac or Fannie Mae with a securitization date prior to June 1, 2009. For more information on this, please visit the Fannie Mae or the Freddie Mac websites. On the said websites, you will find tools that you can use to find out if you meet the eligibility requirements. Even if you are eligible for HARP, you must keep up with your current mortgage payments.


Harp Eligible Lenders

If you qualify for HARP, the next step is to find an eligible lender. Start by finding out if your current lender can participate in the program. According to HARP 2.0 guidelines, you can choose another lender if your current lender is not eligible to participate in the program.


The subprime mortgage crisis dampened the enthusiasm of many players in the real estate market. As a result, the value of properties across the nation fell down. Statistics published by Zillow show that home values have fallen by 29.5% since 2006. A survey carried out by Rasmussen Reports found that 31% of homeowners in the United States still own underwater mortgages. For these borrowers, HARP 3.0 is their life jacket. The program gives underwater homeowners the opportunity to refinance their mortgages. However, not everyone can qualify for HARP 3.0. Only homeowners with Fannie Mae or Freddie Mac backed loans qualify.