I've written about Fannie Mae's HARP program a few times here at Mortgage Porter, but I've neglected to write much about Freddie Mac's version. This is partly due to the fact that when the Home Affordable program began, loans securitized by Freddie Mac required that you had to go back to your mortgage servicer: THIS IS NO LONGER TRUE. In addition, Fannie Mae has a much larger market share than Freddie so I've been helping more Seattle area home owners who have lost equity with Fannie's program. I'm pleased that Freddie Mac has expanded this program (Open Access) to not force home owners to return to the mortgage servicer which means, I can probably help you if your mortgage is owned by Freddie Mac (or Fannie Mae).
Freddie Mac's program offers "borrowers who are current on their mortgage payments the ability to refinance to improve their financial situation when home values have declined…" If you are behind on your Freddie Mac owned mortgage, you may qualify for the Home Affordable Modification. I do not do loan mods.
Here's some information about Freddie Mac's Home Affordable "Relief Refinance" (if you're mortgage is owned by Fannie Mae, click here). Although some of these guidelines are similar to Fannie Mae, there are some differences.
In order to qualify for this program, your mortgage must be securitized (owned) by Freddie Mac prior to June 1, 2009 and be in first lien position. To see if Freddie Mac owns your mortgage, click here.
The loan amount is limited to the mortgage balance plus the lesser of $5,000 or 4% of the current balance. And the maximum cash back a borrower may receive is $250. For example, if your current mortgage balance is $400,000, the most your new loan amount could be is $405,000. You may find that you either need to bring cash in to close (typically a mortgage payment) or price the mortgage with zero points (while Congress still allows this as they're trying to ban rebate pricing).
For King, Snohomish and Pierce counties, the maximum loan amount is $567,500 for a single family dwelling.
This program is available for primary residences, second homes and investment properties.
If your original mortgage did not have private mortgage insurance, the new mortgage will not have private mortgage insurance even if your current loan to value is over 80%.
There must be a benefit to the borrower, such as a reduction in interest rate, replacing an adjustable rate mortgage with a fixed or a reduction in term.
Borrowers must be current on their mortgages with no "30 day late payments" in the last 12 months.
Second mortgages must be subordinated (they cannot be included or paid off with the refinance). Most second mortgage lien holders are cooperating–but it is their call on whether or not they will permit the subordination to take place.
A full appraisal is required and loan to values up to 125% are permitted.
Income and employment are verified. Minimum credit score is a 620.
The Home Affordable Refinance Program is scheduled to end in June 2011 2012. If you're interested in a rate quote for your mortgage, at no obligation, to see if refinancing makes sense for your Washington state home, please contact me.
NOTE: This post has been updated to reflect the extension of the HARP refi.