Just because you have obtained a Fannie Mae loan in the past, it doesn’t necessarily mean that you will be eligible for the HARP home refinance program. This is mainly due to the confusion around the release of the HARP program. For instance, many Fannie Mae loan borrowers assumed that they would automatically meet HARP loan eligibility requirements, but were disappointed to find out that HARP applies only to borrowers whose loans were dated on or before May 31, 2009.
If you are hoping to be eligible for a HARP loan, you will need to know the following requirements for HARP loan eligibility before you get too far into the process.
HARP Eligibility Requirements
- Your mortgage payments must be up-to-date.
- You can’t have any late payments in the last six months.
- You can’t have more than one payment that is 30 days or later within the last year.
- You have to owe an amount on your loan that is equal to or more than 80% of your home’s value.
- Your home must be your primary residence, a one-unit second home, or an investment property of four or fewer units.
- Your loan must have been closed on or before May 31, 2009, according to the note date on your loan.
If you’re not sure about this last requirement, you can find your loan’s closing date on the invoice among the final mortgage documents that you signed at closing. Read on to understand the other HARP eligibility requirements and see if you are eligible.
First, you need to verify that your loan was originated with, is directly owned by, and/or guaranteed by Fannie Mae or Freddie Mac You can do this through these by visiting the Fannie Mae or Freddie Mac website. Simply visit the appropriate website and enter your loan number when prompted to receive verification of your HARP eligibility.
But what if your loan was not originated, owned, or guaranteed by Fannie Mae or Freddie Mac? Unfortunately, in this case, there’s a good chance that you’re not eligible for a HARP refinance.
What if you discover in your paperwork that your loan was sold to either Fannie Mae or Freddie Mac? If it was sold to them on or before May 31, 2009, congratulations! You are eligible for HARP.
Minimum LTV Ratio
To help homeowners stuck with properties where the mortgage is higher than their home’s market value, HARP requires a minimum LTV ratio of 80% or less, based on the property’s equity.
Have you already refinanced on your Fannie Mae or Freddie Mac loan? If so, you are not eligible for a HARP refinance, with one exception. If you have a Fannie Mae loan that was previously refinanced between March and May 2009—the period when the government was still adjusting the rules and conditions around HARP—you are eligible for a HARP refinance.
HARP is built especially for those who are struggling financially but are still managing to make their monthly payments on time. For this reason, HARP does not allow people who have paid their mortgage late within the last six months or who have had more than one late payment in the last year. By meeting these requirements, homeowners demonstrate that they have the desire and the discipline to pay down their debt and use a refinance responsibly.
See if you are eligible for a HARP Loan. Fill out our quick 1-minute form to have a Mortgage Advisor contact you.