Home Affordable Refinance Program
into next year, according to a Bloomberg report.
, a program of the Federal Housing Finance Agency, allows some borrowers to refinance their mortgage to a lower rate even if their home equity
is less than 20%.
The FHFA has also released some details on what will replace HARP once it expires, Bloomberg reported. The agency’s new refinance program will be available only to people who have less than 3% equity in their homes at Fannie Mae or less than 5% at Freddie Mac. Like HARP, the new program will require borrowers to be current on their mortgage in order to be eligible.
The new program’s equity limit will probably limit the pool of eligible borrowers to those who owe more on their mortgages than their homes are worth, according to Bloomberg. However, where HARP borrowers must have had their loans originated before June 2009, the new program won’t have an eligibility cutoff.
As of the first quarter, there were about 323,000 borrowers still eligible for HARP, Bloomberg reported. Since HARP’s inception, more than 3.4 million borrowers have refinanced through the program.
But the FHFA has struggled to make eligible borrowers aware of the program as home prices have risen, according to Bloomberg. In the second quarter, borrowers completed 18,310 refinances through HARP – the slowest rate since 2009.
Fannie Mae and Freddie Mac are extending the