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HARP 2.0 Eligibility Guidelines

The Home Affordable Refinance Program (HARP), launched jointly by the Federal Housing Finance Agency (FHFA) and the US Treasury Department set certain new eligibility guidelines for California homeowners who had bought houses on loans and were subsequently unable to be eligible for refinancing because of downward spiraling home values. This was a major hindrance in refinancing their present mortgages with lower interest rates and/or having a more valuable mortgaged product.

HARP 2.0 Eligibility Changes

With changes announced in HARP eligibility guidelines (now called HARP 2.0), more and more home owners will now be eligible for HARP.

The elimination of the 125% loan-to-value for fixed rate Freddie Mac or Fannie Mae mortgages and the exclusion of appraisals for new properties where there is already a reliable Automated Valuation Model or AVM are two such major changes that will make more people eligible.

Risk-based fees that discouraged borrowers from taking short-term mortgages have been eliminated and this will help those with loans valued at more than the value of their house.

This will reduce not only interest rates but also lower monthly installment payments, creating equity faster.

The Goal of the new HARP 2.0

The goal of the newly modified HARP 2.0 Program is to help stabilize the real estate market and encourage more people to buy homes on loans.

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