What Is the HARP II Program?


Quick Answer

HARP 2.0 is the second iteration of the Home Affordable Refinance Program, a program of the federal government to help homeowners refinance their existing mortgages. Many homeowners can take advantage of this program, even if they owe more than their home is currently worth.

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Full Answer

Under HARP 2.0, the government agencies Fannie Mae and Freddie Mac allow homeowners to refinance their mortgages at lower interest rates than they are currently paying. The guidelines have been adjusted since the original HARP program, with fewer documentation requirements and simpler guidelines.

If borrowers can show that at least 12 months of mortgage payments exist in reserve, they do not have to provide verification of income. They also do not have to verify large deposits on bank statements. The new requirements may make it possible for borrowers who were turned down for the original HARP program to now qualify to refinance their mortgages and lower their monthly mortgage payments.

During the Great Recession of 2009, interest rates fell to historic lows, and housing prices dropped sharply. This led to many homeowners owing high-interest mortgages that were often greater than the value of the home. The HARP program was created in response to these circumstances.

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