Fannie, Freddie, and FHFA announced on August 25, 2016 that they will implement a new refinance offering aimed at borrowers with high loan-to-value (LTV) ratios starting in October 2017. This program is meant to replace HARP.
In order to qualify for the new offering, borrowers: (1) must not have missed any mortgage payments in the previous six months; (2) must not have missed more than one payment in the previous 12 months; (3) must have a source of income; and (4) must receive a benefit from the refinance such as a reduction in their monthly mortgage payment. Full details will be available in the coming months through the GSE’s, but the program will make use of the lessons learned from the Home Affordable Refinance Program (HARP) and its streamlined approach to refinancing.
The new, high LTV streamlined refinance program is more targeted than HARP but as with HARP, eligible borrowers are not subject to a minimum credit score, there is no maximum debt-to-income ratio or maximum LTV, and an appraisal often will not be required. However, unlike HARP, there are no eligibility cut-off dates connected with the new offering, and borrowers will be able to use it more than once to refinance their mortgage. Borrowers with existing HARP loans are ineligible for the new program unless they have refinanced out of HARP using one of the GSE’s traditional refinance products.