Home Affordable Refinance Program Extension

The Home Affordable Refinance Program (HARP) has been extended  for another year according to information released on Friday from the Federal Housing Finance Agency.

 The program was due to expire on June 30 but will now continue until that date in 2012.   News of the extension comes while a House subcommittee is debating the end of HARPs companion program, the Home Affordable Modification Program (HAMP) and has already voted to kill the FHA Short-Refi program and the new Emergency Assistance Loan Program (EALP) which would provide 23 months of mortgage assistance unemployed and underemployed home owners.  

HARP is designed to assist homeowners who owe more money on their current mortgage that the market value of their home and are thus unable to qualify for a conventional refinance.  Refinancing through HARP, which is administered by the Enterprises Freddie Mac and Fannie Mae, can potentially reduce homeowners' mortgage rates and remove some of the incentives for a strategic default. 

Acting FHFA Director Edward J. DeMarco that that the program will continue operating in the same manner as it has since in was started in 2009 except that Freddie Mac will exempt HARP loans from their recently announced price adjustment and Fannie Mae will conform the eligibility date to May 2009.

The use of HARP more than tripled in 2010.  During the year a total of 6.8 million mortgages were refinanced nationwide and HARP, with 621,803 loan closings, represented nearly 10 percent of the total.  In 2009 190,180 homeowners used the program to refinance.

To qualify for HARP you must currently have a mortgage owned or guaranteed by the Enterprises, have a one year history of on-time payments on your loan, and owe more on your loan than your home is worth.  The loan-to-value, however, cannot exceed 125%.