There are two types of Government “relief” programs available to folks who are trying to get their mortgage payments lower, to avoid a short sale or foreclosure. Once program is the HARP Loan program, which offers home owners who are not behind, just lack equity in their home to refinance – the opportunity to do so. The OTHER Program is the HAMP program. The HAMP program is for folks who are probably behind, and need a foreclosure alternative, or in this case – a Modification.
The HARP Loan “Special Refinance” PROGRAM is available in North Carolina for homeowners who meet the following:
- If your home loan is guaranteed by Fannie Mae or Freddie Mac you might qualify for the HARP Loan.
- If your note is dated before May 31, 2009 you might qualify for the HARP Loan.
- If you are current on your mortgage payments you might qualify for the HARP Loan.
- If you have had NO thirty day late payments for six months you might qualify for the HARP Loan.
- If you have had NO sixty day late payments for 12 months you might qualify for the HARP Loan.
- If you owe more than 80% of your home’s estimated value you might qualify for the HARP Loan.
Note – you do NOT have to have “perfect credit” to qualify for a HARP loan refinance. If you own a home, but owe more than it is worth, it was pretty much impossible to refinance to a lower mortgage rate with most lenders. These underwater houses were really, in our estimation, the first wave of abandoned homes – which prompted Congress to come up with the HARP Program in 2009.
HARP Loan Refinance Guidelines
The HARP Loan Program was updated and expanded and extended into 2014 – however there are still millions of homeowners that are estimated to qualify who have not heard about the program! The HARP Loan works by lowering your principal, the interest rate or other financial portions to save you several hundred dollars each month, depending on the property. This federal program is meant to help underwater homeowners if they hold a Freddie Mac or Fannie Mae loan.
As a North Carolina Homeowner (who purchased prior to June 1, 2009) you will need to do some checking to see who currently “owns” your mortgage. To qualify for the “No Appraisal” Refinance HARP Loan Program your mortgage must be owned by Fannie Mae or Freddie Mac. You need to do a HARP Loan 2.0 Eligibility Search on the Fannie and Freddie site to see who has your mortgage. If it’s NOT owned by Fannie or Freddie, unfortunately, you don’t qualify for HARP 2.0 refinance. (follow our link to Fannie Mae and Freddie Mac to see if you qualify).
I can’t tell you how many folks don’t know what kind of mortgage loan they currently have. So, if your loan is NOT a Fannie or Freddie Loan available for the Home Owner Refinance Program ( HARP Loan 2.0), check out the guidelines for these other streamline programs:
USDA Streamline Refinance Program: The Automated Underwriting System for this program needs to be updated for this program, and it’s delayed the full release of it until later in March of 2012.
FHA Streamline Refinance Program: An ongoing program that continues to get “tweaks.” NOTE you can also refinance an FHA loan, even if you no longer live in the house as your primary residence!
VA Streamline Refinance Program: This is an ongoing program that actually had the “PMI” portion of the loan reduced, as part of an effort to make certain Veteran’s can afford their house payments!
HAMP Modification Guidelines Extended
No matter what kind of refinance you are considering, our advice is to make sure you stay current on your North Carolina Home Loan. All of these programs require at least the last 6 months of payments be on time, and no more than 1 thirty day delinquencies in months 7-12.
The HAMP program gave hundreds of thousands of folks the opportunity to modify their mortgage payment to an affordable number, even if they didn’t otherwise qualify for a true ” refinance” of the mortgage. These new mortgages however, are set on Adjustable terms… and many of them, are due to see increases in the next 18 months. Because of that problem, the government made the following announcement today:
HUD AND TREASURY ANNOUNCE ENHANCEMENTS TO HOUSING PROGRAM
Changes Will Provide Greater Relief to Struggling Homeowners and Communities
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today announced enhancements to programs under Making Home Affordable (MHA) to better assist struggling homeowners and communities still recovering from the effects of the financial crisis. The enhancements are designed to motivate homeowners in MHA to continue making their mortgage payments on-time, strengthen the safety net for those facing continuing financial hardships, and help homeowners in MHA programs build equity in their homes, an important factor in stabilizing neighborhoods.
“Today’s announcement signals our commitment to helping more hardworking families continue the American dream of homeownership,” said Secretary of Housing and Urban Development Julián Castro. “These enhancements will expand the opportunity for more folks to stay in their home, stabilizing local communities and continuing our nation’s positive economic momentum.”
“While the housing sector has strengthened in recent years, there are still many homeowners struggling to make their mortgage payments,” said Secretary of the Treasury Jacob J. Lew. “The changes we are announcing today offer meaningful incentives for borrowers to stay current in their modifications, increase their opportunity to build equity in their homes, and provide vital safety nets for those facing greater financial strains.”
Treasury and HUD established HAMP (Home Affordable Modification Program®) in 2009 to provide relief to homeowners facing financial hardship. Through a combination of lowered interest rates and modified loan terms, monthly payments are reduced to affordable levels. In addition, many homeowners who remain current following their modification are eligible to earn up to $5,000 over the first five years of their modification, which is applied in repayment of their outstanding principal balance.
Under the revised guidelines announced today, all homeowners in HAMP will now be eligible to earn $5,000 in the sixth year of their modification, which will reduce their outstanding principal balance by as much as $10,000. Homeowners will also be offered an opportunity to re-amortize the reduced mortgage balance, which will have the effect of lowering their monthly payment. As of today, approximately one million homeowners with HAMP modifications are eligible to earn the increased HAMP incentive.
In addition, in an effort to bolster the safety net for homeowners who face difficulty making their payments in HAMP Tier 1 or similar non-HAMP modifications, Treasury and HUD have introduced enhancements to HAMP Tier 2 and the Home Affordable Foreclosure Alternatives® (HAFA) Program.
HAMP Tier 2 is an alternative modification that provides a low fixed rate for the life of the loan to homeowners who do not qualify for or cannot sustain a HAMP Tier 1 modification. The enhancements announced today include reducing the interest rate for HAMP Tier 2 by 50 basis points, which will enable more homeowners to qualify for a modification, and extending the $5,000 pay-for-performance incentive to HAMP Tier 2 borrowers in good standing at the end of the sixth year of their modification.
HAFA assists homeowners who need to transition to a more affordable living situation through a short sale or deed-in-lieu. Treasury and HUD announced today that they have increased the amount of relocation assistance provided to homeowners to $10,000 to better reflect increased rents and the cost of moving in many parts of the country.