BluefoxToday blog : HARP, or Home Affordable Refinance Program, limit goes up to 125% loan-to-value

HARP, or Home Affordable Refinance Program, limit goes up to 125% loan-to-value

Relief Refinance Mortgage by Freddie Mac falls under this banner. It's now official that the previous limit of 105% has been pushed up to 125% loan-to-value, or LTV, something that Washington had been tossing around for a bit. "This is a change that will put affordable refinancing opportunities within reach of performing borrowers who have suffered the effects of local home price erosion," explained a Freddie Mac wool suit. Qualifying homeowners are current on their payments and have a mortgage owned or guaranteed by the agency.

Freddie Mac's Relief Refinance Mortgagehas some nice features, too. It lets borrowers finance closing and financing costs and prepaids/escrows up to $5,000, or 4% of the mortgage balance being refinanced, whichever is less. In addition, MI, or mortgage insurance, is not needed if the underlying note does not have one. If there is an MI on the existing mortgage, the new one must keep the same coverage.

Las Vegas homeowners could benefit from Relief Refinance Mortgage. Many who bought property in the last five-six years with little or nothing down are generally upside down and as long as they are not too much so, they could be eligible here. Let's say that a home is presently worth $250,000, then under the old rule of 105% LTV the refinance could go to $262,500, or $12,500 over the actual value. In the new scenario at 125% LTV the refinance amount could reach up to $312,500, or $62,500 over the home's value. This is more like it. The new, higher limit will make a real difference.

HARP makes now more sense in those areas, including Southern Nevada, that were hammered the worst during this real estate calamity. It gives borrowers another useful option to consider when dealing with difficulties in meeting their mortgage obligations.


Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 5 commentsEsko Kiuru • July 22 2009 10:26PM


Esko, I don't know if I agree with what the government is doing, but this change goes a long way to accomplish what they were trying to do before, but fell far short.

I guess I just feel that contract should be honored, and this is an erosion of that, but I understand the argument for it.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 11 years ago

I am sure this could help Miami borrowers as well who have seen massive erosion of prices thank you for sharing!

Posted by Janie Coffey, Uniting Extraordinary Homes w/ Extraordinary Lives (First Coast Sotheby’s International Realty) over 11 years ago


The government seemingly is trying to promote a softer landing than would otherwise happen.

Posted by Esko Kiuru over 11 years ago


It should be especially helpful in Florida, Arizona, California and some other hard-hit areas.

Posted by Esko Kiuru over 11 years ago
Sounds like your credit score is fine. It could be hihger, but this will be a great place to start. As far as first time home-buyer programs, there are a ton of them, and yes you can absolutely get into a home with little or no money down. Beware of interest rate programs that are not fixed rates. Not because they are bad loans, but being a first time home-buyer, you do not want to get any creative mortgage options. Get used to owning your own home first, then later in life look into other types of mortgage programsIf you would like to ask some more questions and would like to have a more personal conversation about this subject, i would be glad to help you with anything you need. You can contact me at timothy.kazee@americanhm .com. Then we can go from there and make an appointment time over the phone.I wish you well in your home-buying process. -1Was this answer helpful?
Posted by King over 8 years ago