The federal government’s Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) were originally set to expire in December 2015. The Federal Housing Finance Agency (FHFA), which oversees the venture, announced today that the popular mortgage refinancing and modification programs will be extended through the end of 2016.
According to a recent announcement, homeowners now have until December 2016 take advantage of these government-backed programs.
FHFA Director Melvin Watt announced the deadline change earlier today, when speaking to members of the Greenlining Institute 22nd Annual Economic Summit.
According to Mr. Watt:
“…we have also made decisions about the status of modification and refinance programs that are currently scheduled to end on December 31, 2015. This enables me to announce today that FHFA has decided to extend the Enterprises’ participation in the Home Affordable Modification Program (HAMP) and the Home Affordable Refinance Program (HARP) for an additional year, until the end of 2016.”
These programs are very popular among homeowners who are trying to reduce their mortgage costs and/or avoid foreclosure.
Home Affordable Refinance Program (HARP)
The Home Affordable Refinance Program, or HARP, was launched in 2009. It is one of the two main programs that make up the Obama Administration’s “Making Home Affordable” program (HAMP is the other one).
Through this program, homeowners who might not otherwise qualify for a mortgage refinance due to equity losses or other factors can refinance their homes and secure a lower interest rate. Homeowners can also use HARP to switch from an adjustable-rate mortgage (ARM) loan to a more stable and predictable fixed-rate loan.
There are other refinancing programs available for homeowners in 2015 and 2016. But HARP is unique. According to an FHFA fact sheet, it is currently the only program that offers refinance loans to homeowners with negative equity. Upside down homeowners (those who owe more on their mortgage loans than their homes are worth) are often able to refinance through HARP. Traditional refinancing programs, on the other hand, are generally not available to such borrowers.
As for eligibility, HARP is limited to homeowners whose existing mortgage was sold to Freddie Mac or Fannie Mae on or before May 31, 2009.
Additionally, homeowners seeking a HARP refinance loan must be current on their mortgage payments. Borrowers must not have had any late payments within the last six months (at the time of application), and no more than one late payment within the last year.
The HARP deadline has been extended several times in the past. The program was originally scheduled to expire in December 2015, but the deadline has been pushed back until December 2016. This gives eligible homeowners another year to take advantage of the program, by lowering their mortgage rates and possibly switching from an ARM to a fixed-rate loan.
Home Affordable Modification Program (HAMP)
The Home Affordable Modification Program, or HAMP, is another key part of the federal government’s long-running “Making Home Affordable” initiative.
HAMP is designed to help homeowners who are at risk of foreclosure, by giving them more affordable and sustainable monthly payments on their loans. It is open to homeowners who have already defaulted on their mortgage loans, as well as those who are at risk of defaulting in the near future. It is essentially a government-backed foreclosure avoidance program.
To be eligible for HAMP in 2015 or 2016, the homeowner’s existing home loan must have been originated on or before January 1, 2009. As with HARP, the borrower’s current loan must be owned by Fannie Mae or Freddie Mac (or be serviced by a participating mortgage company).
The deadline for HAMP was also extended until December 2016.
Learn more: Homeowners who want to learn more about the government refinancing or modification programs can visit KnowYourOptions.com (a website owned and operated by Fannie Mae) or MakingHomeAffordable.gov, which is the official program website.