Home Affordable Refinance Program (HARP)

People who have not built up much equity in their houses or owe more on their mortgage than the home is worth may find it difficult to locate a lender to refinance. When you owe more on your mortgage than what your home is worth, you are considered "underwater" on your loan. The federal Home Affordable Refinance Program is also known as HARP. The purpose of the program is to assist homeowners who are underwater or close to it on their mortgage refinances. If you have loans owned by Freddie Mac or Fannie Mae, and you are current on your mortgage, you may be eligible for HARP. The Boston real estate attorneys at Pulgini & Norton may be able to provide advice and legal representation in this situation.

HARP was introduced in 2009 to allow borrowers to refinance and obtain more affordable mortgages without taking out new mortgage insurance. It was meant to help borrowers who have loan-to-value ratios that are 80% or more and are either not delinquent or only slightly delinquent in the prior year.

The program has changed since it began. The loan-to-value ratio ceiling was removed, and in some cases, appraisal requirements have been removed. More borrowers are now eligible for the program.

To be eligible, you need to be current on your mortgage payments, you cannot have been more than 30 days late paying your mortgage over the last year, and you must have enough income to pay under the new loan terms. Although you owe more than what your home is worth, your mortgage cannot be more than 125% of the current market value of your house. Refinancing must improve the stability or affordability of your mortgage.

Additionally, your home must be an owner-occupied primary residence (you cannot live somewhere else), you must not have an FHA, VA, or USDA loan, and you must have a mortgage loan that is owned or securitized by Fannie Mae or Freddie Mac. You can check whether you meet this last requirement by checking on their websites.

Refinancing through the HARP program into a 15- or 30-year fixed rate loan may lower your monthly payment, reduce your interest rate, allow you to secure a fixed rate mortgage that does not change over time, permit you to build equity faster, and lower your closing costs, since an appraisal is not typically needed. You may still need to pay certain closing costs, including lender fees and points, and you will not be able to get cash to pay off other debts.

Even if you do not qualify for the HARP program, we may be able to help you figure out other options with your lender, such as loan modification or standard refinancing. At Pulgini & Norton, our Boston lawyers provide advice and representation to homeowners as well as lenders. If you are thinking about refinancing, the Home Affordable Refinance Program may be a good option. Our firm also represents people in Waltham, Weymouth, and Somerville, as well as other Massachusetts cities. For a consultation with a home financing attorney, contact us online or call 781-843-2200.