2017 is the Last Year for HARP 2.0

2017 is the Last Year for HARP 2.0

The HARP program has been available for over seven years and has helped more than 3 million underwater homeowners refinance.

This mortgage type has been a key part of the housing recovery. It has enabled families to drop their monthly mortgage payments when traditional refinance methods don’t work.

HARP rates near 4% have helped some refinancing households save even more.

But HARP’s days are quickly ticking away.

The current expiration date for HARP 2.0 is set for September 30, 2017. There is less than one year remaining for homeowners to qualify.

HARP Loan Still Popular with Homeowners

In the second quarter of 2016 alone, over 18,000 homeowners used HARP to drop their mortgage rate.

Twenty-two percent of HARP refinance applicants owed at least 105% of their home’s value. This loan-to-value level would keep them from refinancing if they didn’t have access to the program.

In states hardest hit by the housing downturn, HARP remains a prominent portion of all refinances. In Florida and Georgia, HARP refinances represented 9% of all refinances, according to the Federal Housing Finance Agency (FHFA) which oversees the HARP program.

HARP Misconceptions Delay Homeowner Action

While over 3 million homeowners have reduced their housing costs with HARP, it is estimated by FHFA that more than 200,000 homeowners who could benefit from the program.

There’s no clear answer as to why these homeowners have not yet refinanced but experts have made some sound guesses.

Homeowners have damaged credit. Millions of homeowners lost income in the economic downturn, leading to unpaid bills and damaged credit. Many still don’t qualify for HARP but are rebuilding their credit.

Will HARP 2.0 Receive an Extension?

The original HARP loan was set to expire on December 31, 2013. That was extended by two years in April of 2013. Then in 2015, the program was extended an additional year. Finally, another extension moved the expiration date to September 30, 2017.

Will we see another extension?

Probably not. A new program is being proposed by Fannie Mae that would allow homeowners with an LTV greater than 97% to refinance.

But, the new program may not be as flexible as today’s HARP loan. Often, no appraisal is needed for HARP. And streamlined income documentation is often allowed.

There’s no telling what the requirements will be for the new loan. Homeowers are encouraged to apply for today’s HARP loan before the expiration date.

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