What is the Homeowners Affordable Refinance Program (HARP)?

Acronyms abound!  HARP or the HARP Program as it is commonly referred to, is actually short for the Home Affordable Refinance Program - the Obama administration program is designed to help homeowners with underwater mortgages, to make their loan more affordable.

HARP, now HARP II (or HARP 2.0) accomplishes this by loosening the original lending guidelines for home loans currently owned by Fannie Mae and Freddie Mac.  The looser standards make it possible for underwater homeowners to lower their monthly payments – by refinancing at a lower current rate, and/or a more stable rate, such as a fixed rate loan which is considered more stable than an ARM rate.

The reason that HARP also aims to help borrowers into more “stable” products is because the government is trying to stabilize the housing market and help homeowners stay in their homes long term.  Adjustable Rate Mortgages (ARM) are considered higher risk because the interest rate on an ARM can rise significantly over the life of the loan.  The government wants the program to prevent a future round of foreclosures to caused by a rise in interest rates -which would put pressure on ARM loan holders.

If you are interested in refinancing your loan, and  would like to talk about your loan situation with an expert to see if the Home Affordable Refinance Program could benefit you, complete the form to the right and an agent will contact you shortly.