HARP 3.0 is a program that is yet to be rolled out. The program is the latest phase of the HARP program that was started by the Obama administration in the year 2009. The HARP program was specifically started to enable many US citizens to refinance their mortgages despite the low value of their homes.
Unlike previous years when there was great demand for ultra high LTV loans, recently, the demand for the LTV loans has warned. This is partly due to the rise in value of most homes hence many people don’t find the need to request for these loans. As the demand for the loans falls, the reach for the HARP program may be limited—this is because the HARP program does not offer loans when the loan-to-value is below 80%.
Due to this, the government maybe moved to make several modifications to the HARP 2.0 in order to increase the demand for the loans. The expected modifications are the ones that are dubbed as HARP 3.0.
HARP 3.0: Providing Help for Non-GSE Mortgages
The program is set to target many homeowners whose mortgages are not owned or guaranteed by Fannie Mae or Freddie Mac. This will be a huge reprieve to many who pay their mortgages to companies that are not supported by Fannie Mae or Freddie Mac.
Although, Fannie Mae -Freddie Mac control over 90% of the mortgage originations, that was not the case several years back. For the last 10 years, the non-GSE has been leading in lending mortgages to prospective home owners. According to the Federal Reserve data, as of 2005, over 27.5% of mortgages had been given out by the non-GSE.
Today, due to the current rules, the homeowners who had obtained their mortgages from non-GSE have been unable to access the HARP program. The introduction of the HARP 3.0 means that many who had been locked out of the HARP program will be able to refinance their home loans.
In addition to the above modifications that are expected in the new HARP program, it’s also expected that the private loans and other loans that were not previously backed by the government will now be backed by the government. Due to this, many home owners who had taken the high cost loans such as the jumbo loan will be able to refinance their mortgages under the new program.
Who Are the Candidates for the HARP 3.0?
Going by the history of the HARP program, some of those who will qualify for the program include:
- Self-employed who can prove their income
- Prime borrower using the sub-prime mortgage to cut the mortgage rates
- Jumbo mortgage owner living in a high cost area, and a sub prime borrower who has paid their mortgage and they can prove their income and assets.
HARP 3.0 is an extension of HARP 2.0 but with modifications that favor those who had been locked out of the HARP program; therefore, if you are a homeowner who used the private-market mortgage money, maybe because it was cheaper than the government loan or there was no suitable GSE product available at the time, the new HARP program gives you the opportunity to refinance your mortgage despite the status of your current loan.