The current HARP 2.0 program is designed to end this year – and there may or may not be a HARP 3.0 coming out to help more homeowners refinance their mortgage. It is possible that HARP 2.0’s deadline is extended or it is also possible that a HARP 3.0 will expand the guidelines and allow more homeowners to refinance. Under HARP 2.0, the following requirements must be met to qualify for the program:
- Must have less than 20% equity in the property
- Must have no late payments in the last 6 months
- Loan must have been taken out prior to June 1, 2009
- Loan must be owned/backed by either Fannie Mae or Freddie Mac
If HARP 3.0 does actually pass – the biggest expected change will be that under HARP 3.0, the loan to be refinanced does not have to be backed/owned by Fannie Mae or Freddie Mac – which would expand the reach of the program in a big way. This means that all subprime, alt-a and jumbo loans could be qualified under the HARP refinance program.
Recently Mel Watt has been named as the FHFA (Federal Housing Finance Agency) director and it is believed that Mell Watt will try to help push HARP 3.0 into law – or at least that is the hope of people who could benefit from the HARP 3.0 program. It is still unknown if it will happen though – as property values rise and interest rates also rise, the amount of people who can actually benefit from the HARP 3.0 program goes down because many people will no longer owe more on their mortgage than their home is worth and interest rates are rising to the point where it no longer saves money to refinance.