Making Home Affordable programs offer comprehensive options to homeowners struggling to make current mortgage payments. The refinance plans were created to make refinancing much easier according the new circumstances in the field and provide relief to struggling homeowners.
The program offers four options:
- Home Affordable Refinance Program (HARP) for borrowers who are underwater in their mortgage
- Home Affordable Modification Program (HAMP) for refinancing first and second mortgage loans
- Home Affordable Unemployment Program (UP) which is temporary assistance to unemployed homeowners
- Home Affordable Foreclosure Alternatives Program (HAFA) which offers alternatives to foreclosure
Under these plans, eligible borrowers can get into more affordable monthly payments and lower interest rates.
The FHA Short Refinance (Finance) Program
This refinance program is beneficial for borrowers who do not have an FHA loan and are current on their mortgage payments. A candidate for this program is typically underwater with his or her mortgage and owes at least 15% more than what the property is actually worth.
To qualify for this program the borrower should have credit score of 500 or greater and be partnered with a lender willing to write off at least 10% of the original loan.
This program launched September 2010 and it will end on or before the end of 2012. Read more about this refinance option: Short Finance: How Can It Help You or use our broker service.
Home Affordable Refinance Program (HARP)
Home Affordable Refinance Program (HARP) is intended for homeowners who are suffering from falling home prices and have a mortgage loan guaranteed by Fannie Mae or Freddie Mac.
The typical profile of a homeowner eligible for HAMP is one who is current on his or her mortgage payments (no more than 30 days late or have never missed a payment in the last 12 months). Also, the amount owed on the first lien mortgage does not exceed 125% of the current market value of the property.
Additionally, those who qualify for HAMP should have a reasonable ability to pay the new mortgage payments, which positions refinance to improve the long-term affordability or stability of the loan.
Fannie Mae provides two Refi Plus™ options that simplifies the process of refinancing under this program:
- Refi Plus for manual underwriting applies to refinanced loans that are already in a lender's servicing portfolio. Borrowers are allowed a maximum of 125% LTV and mortgage insurance flexibilities for LTV’s over 80%.
- DU Refi Plus™ is for loans underwritten through Desktop Underwriter® (DU®). DU Refi Plus increases efficiencies and the DU minimum documentation requirements for the origination. Underwriting is up to 125% LTV.
Read more about this refinance option or use our broker service.
Borrowers may refinance a conventional loan to a FHA loan. Options include:
- Cash-out Refinancing—refinance an existing mortgage by initiating another mortgage for more money than the borrower owes
- Rate Refinancing—refinance at a lower FHA rate
- Term Refinancing—refinance for an advantageous term
- FHA Short Refinance -- a plan for borrowers who do not have FHA loans and are current on their mortgage payments, but are underwater on their mortgages.
The FHA offers debt-consolidation programs and the option to consolidate two mortgages into one FHA mortgage. The benefits of FHA loans include low closing costs and more relaxed credit and income qualifications, Streamline refinancing is the only type of FHA refinance loan that requires the original loan to be FHA-insured.
Benefits of a FHA mortgage:
- A 3% down payment, as opposed to a 5% down payment on traditional loans
- Low monthly mortgage insurance
- Low closing costs, which are regulated by HUD
- No credit score requirements
- Qualify for a loan two years after a bankruptcy
- Qualify for a loan three years after a foreclosure
If your current lender has no interest in helping you refinance, call or apply with MortgageRefinance.com approved brokers and lenders. If you prefer to use our service and have the best qualified mortgage broker in our network use our mortgage application.
Discuss your loan with several lenders by obtaining as much information possible without having to provide the lender with your social security number. Once you are serious about applying with a specific lender, you will need to furnish your social security number which will allow the lender to access your credit data.
When you find two or three programs that suit your qualifications, apply to all three in order to increase your likelihood of obtaining a loan.