HARP or the Home Affordable Refinance Program is continuing for 2017

As the Making Home Affordable program ends, the HARP program has been extended until Sept. 30, 2017.

Though the number of foreclosures has decreased across the country, there are still homeowners struggling to make their housing payments. Many of these homeowners still have no equity in their home or owe more than the appraised value. This is called an underwater mortgage. When this is the case, the Home Affordable Refinance Program or HARP, can help homeowners stressed by high payments to both lower monthly payments and make keeping their home possible.

The HARP program was established as part of the Making Home Affordable programs that came into existence beginning in 2009 as a result of the foreclosure crisis. At that time, there were multiple programs geared at slowing down foreclosures and stabilizing the housing market. Acronyms such as HAMP, HAFA, HARP and UP cropped up to cover everything from helping unemployed borrowers, to applying to modify the mortgage or even to provide borrowers with an exit strategy if a mortgage proved unaffordable. These programs enabled thousands of homeowners to retain their homes and get back on track with mortgage payments.

The HARP program is one part of the Making Home Affordable group of options for homeowners. It has specific criteria and was targeted for those who were current on the mortgage but were unable to refinance to a possible better rate due to falling home values. This program allowed mortgage holders to refinance up 125 percent of the appraised value and lower the interest rate or shorten the loan term or both. The goal with this program was to help borrowers refinance into lower interest mortgages so that there is a lower probability of default if the monthly payments are more affordable.

Starting January, 2017, the HARP program is being extended until September 30, 2017. In addition, there are some streamlined requirements in place to make it easier to qualify.

  1. The requirement of a maximum loan-to-value of 125 percent is no longer in effect.
  2. An appraisal is no longer required.
  3. Certain fees have been eliminated as the cost of closing.
  4. There is a reduced amount of paperwork required to verify income and borrowers can use assets in savings as an alternative to verifying income.

It’s important to note that other programs under the Making Home Affordable umbrella have either ended or are being revised and won’t include as many options as the former programs did. If a homeowner believes they qualify for the HARP program, they should check out the website and then contact their lender to see how to get started on the process. Since this program is only extended through September, don’t wait to get started!

Michigan State University Extension has released a new toolkit for homeowners who are experiencing or have previously experienced foreclosure. This toolkit will equip these individuals and families with tools to help them recover their financial stability, in the case that a recovery of their home is not possible. The toolkit is available to download free at MIMoneyHealth.org.

Michigan State University Extension offers financial literacy and homeownership workshops throughout the year to help you become financially healthy. For more information of classes in your area, visit the MSU Extension events page or the MiMoneyHealth website. Additionally, you can take the Financial Health Survey at MI Money Health to access if you’re financially healthy and discover more ways you can improve your financial health.

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