FHFA Rolls Out Refinance Program for Responsible Homeowners, Extends Harp Until Sept, 2017
“The population of borrowers eligible for this new program is very small – it’s essentially a subset of the current HARP population. More likely, FHFA’s goal is simply to have a program in place in the event of another housing downturn or financial crisis.”
U.S. agency rolls out refinance program for homeowners
The regulator of Fannie Mae and Freddie Mac unveiled on Thursday a program aimed at homeowners who are paying their mortgages on time but whose loan-to-value (LTV) ratios are too high to qualify for traditional refinance programs.
To be eligible for this program, which Fannie and Freddie will implement, borrowers must have not missed any mortgage payments in the prior six months; must not have skipped more than one payment in the previous 12 months; must have a source of income and must receive a benefit from the refinance such as a reduction in their monthly loan payment, the Federal Housing Finance Agency said.
“This new offering will give borrowers the opportunity to refinance when rates are low, making their mortgages more affordable and thus reducing credit risk exposure for Fannie Mae and Freddie Mac,” said FHFA Director Melvin Watt in a statement.
Because this program for high LTV borrowers will not be available until October 2017, the agency said it will extend the Home Affordable Refinance Program (HARP) until Sept. 30, 2017 as a bridge to the new high LTV program.