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.

NOTE:  This program has been extended thru June 30, 2012 DECEMBER 2013.

Fannie Mae and Freddie Mac's Home Affordable Refinance that allows homeowners upside down with their home equity to refinance has been extended until next summer.  From Fannie Mae:

This program is for borrowers who have demonstrated an acceptable payment history on their mortgage but, due to decline in home prices or where mortgage insurance is not available, have been unable to refinance to obtain a lower payment or move to a more stable product.

…lenders may continue to apply for the HARP flexibilities to loans originated under Refi Plus and DU Refi Plus provided the note date is on or before June 30, 2011…

This program has been very helpful for Washington homeowners who are interested in reducing their mortgage payment or refinancing out of their adjustable rate mortgage.  This is not a loan modification–this is a refinance.

NOTE: the following guidelines are for mortgages that are securized by Fannie Mae.  I'll follow up with a post on those owned by Freddie Mac — which I can help you with too.

In order to qualify, the home owner's mortgage that is being refinance must be owned by Fannie Mae.  This isn't something that most home owners know since you don't write your mortgage payment to Fannie Mae, but you can check to see if Fannie is the investor on your mortgage by clicking here.  To be eligible, the existing mortgage must have been owned or guaranteed by Fannie Mae prior to March 1, 2009.

Fannie Mae has made some recent adjustments to the HARP program including allowing the removal of borrowers as long as the remaining borrower(s) can demonstrate they have been making the mortgage payments from the own funds for the prior 12 months (except for in cases of a borrower passing away).  If a borrower is removed from the mortgage via a HARP refinance, Fannie will also require that the borrower is no longer on the title to the home.

Here are some other key points about the Home Affordable Refi (DU Refi Plus):

• Maximum loan to value is 125%.  There is no "combined loan to value" limit.
• Existing second mortgages must be subordinated (second mortgage lien holders review and decide IF they are going to allow the mortgage to be subordinated).  No new subordinate financing (second mortgages) are allowed.
• Second mortgages or HELOCs are not allowed to be paid off with a HARP refinance. (I WISH they were).
• If your original mortgage was at 80% loan to value, your HARP mortgage will not have private mortgage insurance if your current LTV is over 80%.
• Fannie Mae High Balance/Jumbo mortgages are eligible.Loan limits in the King, Pierce and Snohomish County area are up to $567,500 for a single family dwelling (however the mortgage being paid off must be owned by Fannie Mae–see above). 
• Available for primary, second homes and investment properties.
• Appraisals may not be required depending on the response from the automated underwriting findings.  With that said, I recommend planning on having an appraisal…I've seen very few come through with an appraisal waiver option.
• DU Refi Plus (HARP) has price hits (aka LLPA) based on your credit score and loan to value.
• Borrowers are only permitted a maximum of $250 cash back on a Fannie Mae HARP refi

Borrowers must still qualify for the mortgage.  Documentation may be reduced to one paystub and a verbal verification of employment for salaried employees or one year tax returns for commissioned or self-employed borrowers.

Various lenders or banks may have their own underwriting guidelines or "overlays" with regards to credit scores or debt-to-income ratios. 

With a HARP refinance, the home owner does NOT have to go back to the mortgage servicer (the bank the borrower makes their mortgage payment to).  

If I can help you with a refinance for your home located in Washington State, please contact me.   I'm happy to review your options, including HARP or possibly FHA (which will allow including a second mortgage with a refinance) at no obligation to you.