Here are the links to the recently released HARP 2.0 guidelines. Fill in the contact form on the right if you would like to have us look at your specific situation for you.
The key changes between HARP 1.0 and HARP 2.0 are as follows:
1. There is no longer a 125% loan-to-value (LTV) cap on HARP loans. Fannie and Freddie are now accepting refinances no matter how underwater the current loan is.
2. Borrowers with mortgage insurance are now able to refinance with the HARP program. Technically they could with HARP 1.0 too but virtually no lenders allowed it. Fannie and Freddie gave better incentives to lenders with HARP 2.0 and now some authorized lenders are allowing MIP/PMI transfers.
3. Appraisals are being waived in a majority of cases with Fannie loans and in just some cases with Freddie loans. This is determined by the underwriting software from each company.
4. Low credit scores are theoretically not a problem with the new program. As long as the Fannie/Freddie underwriting software approves the refinance it has a good chance of going through (although low credit scores make it more likely the software will come back with a denial).
5. Debt to income (dti) ratio requirements are even being stretched. It used to be that monthly debt payments could not exceed 50% of monthly gross income. The Fannie/Freddie underwriting software has been more lenient on that as of spring 2012.
Several requirements are still in place though.
1. The HARP program only applies to first mortgages. Second mortgages cannot be rolled in to the new loan. Rather they must be kept in place as is, or subordinated.
2. The first mortgage must already be invested in or backed by Fannie or Freddie. Most conventional mortgages are backed by Fannie or Freddie. See here to find out if your mortgage is backed by Fannie or Freddie well.
3. The Fannie/Freddie loan must have been obtained and sold to Fannie or Freddie prior to May of 2009 to qualify for the HARP program.
Participating Authorized Lenders
There are only a small number of authorized lenders who have chosen to fully participate in the HARP 2.0 program. Contact us in the sidebar to learn more and to get a referral to one of those lenders.