|
Fannie Mae and Freddie Mac have just launched their Home Affordable Refinance Program (HARP) in an effort to help those home owners who have little or no equity in their property due to declining values. The program is designed to refinance home owners into lower interest rates and/or out of adjustable rate mortgages into lower fixed rate options. In order to qualify, your loan must be owned/serviced by Fannie Mae or Freddie Mac (which we can determine for you) and you must meet the criteria below.
Reduced documentation options are available (depending on who owns/services your loan) including: no asset verification, no income verification, and no standard appraisal requirements.
HARP maximum loan amount is $417,000 up to 105% of the home's value.
HARP is only available on FIRST MORTGAGES and does not include any secondary financing or home equity loans. Should you have a second mortgage or home equity loan, it will either need to be subordinated by the existing lien holder (if they will allow it) or paid off by the borrower with out of pocket funds.
Below are some of the requirements associated with the HARP refinance program. Please contact us for full specifics or to see if you qualify!
Home Affordable Refinance Programs - HARP
If your loan is owned/serviced by Fannie Mae, the following rules apply to your refinance:
|
DU Approve/Eligible |
|
Fannie Mae owns the existing mortgage. |
|
Existing loan does not have MI. (DU will indicate if there is LPMI and will be ineligible) BPMI will need to be verified |
|
Benefit to borrower of reduced payment and/or more stable product (i.e., ARM to fixed rate). |
|
Any existing subordinate financing is being resubordinated or paid off with own funds (evidenced by a subordination agreement in the file) and there is no new or replacement subordinate financing being obtained. (Existing subordinate financing may not be paid off with refinance proceeds or the borrower’s own funds). |
DU’s appraisal requirements have been met.
If PIW (Property Inspection Waiver = appraisal) option is provided by DU, Affidavit signed by borrower indicating how long they have owned the property and that the property is currently not for sale and $75.00 fee added.
If condo, project is not a resort condo or condotel. No additional condo project review is required.
The existing loan is not a manufactured home.
Borrower limited to one Home Affordable Refinance Program refinance per property.
Income documentation required by DU has been provided (Salaried: One Paystub; Self-employed: one-year federal tax returns)
Asset documentation has been provided if the borrower is paying down the first mortgage balance or paying down subordinate financing with his/her own funds, and the borrower has adequate cash to close.
IRS 4506T signed at application and conditioned for at closing and executed.
0x60 mortgage lates in the last 12 months.
The borrowers on the new loan are the same as those on the existing loan unless one of the following applies:
A new borrower is being added OR
An existing borrower is being removed due to death or divorce only and the following are obtained:
Documentation of the death or divorce
Evidence that the remaining borrower(s) has/have been making the mortgage payments, including the payments for any secondary financing, for the most recent 12-month period
Application reflects 2 years’ residency history and 2 years’ employment history, including income, employer name, address and phone.
New loan amount does not exceed the amount required:
The unpaid first mortgage principal balance plus accrued interest, but excluding other payoff fees and costs
Pay related closing costs, financing costs, pre-paids, and escrows
Conforming loan limit only – High Balance Loan Amount not allowed
Unpaid Principal Balance+ _____________________________
Accrued Interest+ ____________________________________
Closing Costs+ ______________________________________
Total Loan Amount = _________________________________ (LTV cannot exceed 105%)
Borrower is not receiving ANY cash back.
No limit on number of financed properties.
No seasoning requirement applies.
If the application indicates the borrower has had a bankruptcy, but none is reflected on the credit report, a Notice of Discharge has been obtained or conditioned for.
Any collections or judgments over $1000 or liens on title are to be paid at closing from the borrower’s own funds.
DU Manual Overlay Job Aid has been reviewed and complied with.
______________________________________________________________________________________________________
If your loan is owned/serviced by Freddie Mac, the following rules apply to your refinance:
|
Freddie Mac Relief Refi Loan Borrower Notification/Authorization and the Lender Validation Checklist are completed and in the file. |
|
Freddie Mac owns the existing mortgage. |
|
Wells Fargo services the existing mortgage. |
|
Existing loan does not have MI. |
|
One of the following benefits to borrower exists:
- A reduction in the interest rate of the existing first mortgage
- An ARM, Initial Interest Mortgage, mortgage with an interest-only period, or a Balloon/Reset Mortgage is being replaced with a fixed-rate, fully amortizing mortgage.
- Amortization term of the existing first mortgage is being reduced.
|
|
Amortization term of the new mortgage is shorter than or equal to that of the existing mortgage. |
|
Existing mortgage was not subject to Texas Equity Section 50(a) (6). |
|
Any existing subordinate financing is being resubordinated (evidenced by a subordination agreement in the file), or paid off with the borrower’s own funds.
There is no new or replacement subordinate financing being obtained.
There is no increase in the unpaid principal balance of subordinate financing.
Secondary financing meets the requirements of Broker Guide section 221.
Unlimited TLTV/CLTV |
|
Note date of the existing mortgage is >3 months prior to the note date of the new mortgage. |
No additional condo project review or 921/HOA review is required. 921/HOA review not required.
Maximum number of properities applies (see Broker Guide section 201)
No requirements for properities that have been listed for sale or currently listed for sale.
The existing loan is not a manufactured home.
Borrower limited to one Home Affordable Refinance Programs refinance per property.
Must be the same occupancy type as when the existing loan was originated, except that change in occupancy from second home or investment to primary is allowed.
If the new principal and interest payment is 20% greater than the existing principal and interest payment, the following apply:
Loan Score is >620
DTI is <45%
If DTI is >50%, the borrower has NOT had a job loss or reduction in income in the last 6 months.
If the property is located in the state of CT, IL, MA, MD, ME, MN, NC or OH, state specific requirements must be met; income documentation is required.
Asset documentation has been provided if the borrower is paying down the first mortgage balance or paying down/off subordinate financing with his/her own funds, and the borrower has adequate cash to close.
0x30 mortgage lates in the last 12 months.
No new borrowers have been added to the loan.
If a borrower is being removed from the existing loan, it is due to death or divorce only and the following have been obtained or conditioned for:
Documentation of the death or divorce
Evidence that the remaining borrower(s) has/have been making the mortgage payments, including the payments for any secondary financing, for the most recent 12-month period
Application reflects 2 years’ residency history and 2 years’ employment history, including income, employer name, address and phone.
New loan amount does not exceed the amount required:
The unpaid first mortgage principal balance plus accrued interest, but excluding other payoff fees and costs
Pay related closing costs, financing costs, pre-paids, and escrows no greater than $2500
Conforming loan limit only – High Balance Loan Amount not allowed
Unpaid Principal Balance+ _____________________________
Accrued Interest+ ____________________________________ (add’l payoff fees must be included in the $2500 Closing Cost)
Closing Costs+ ______________________________________ (cannot exceed $2500)
Total Loan Amount = _________________________________ (LTV cannot exceed 105%)
Borrower is not receiving ANY cash back.
Borrower is not currently involved with a bankruptcy or foreclosure.
Any collections or judgments over $1000 or liens on title are to be paid at closing from the borrower’s own funds.
IRS 4506T signed and dated at application and closing but is only processed when income documentation is verified.
|
