Many people have seen a popular ad that says “President waives refinance requirement” and are wondering exactly what that means. Depending on what type of mortgage loan you currently have, this may be “kind of true” but if you have a VA loan, the announcement may not have as much to do with your loan as you may think.
The program that the ad refers to about the refinance requirement being waived is the Home Affordable Refinance Program® and it is commonly known as the “HARP®” program. It is also sometimes called the “Obama refinance” because President Obama announced it and has been seen speaking about the program over the last few years.
HARP® Refinance Waives Refinance Requirements
The big deal about the HARP® program is that those homeowners who currently owe more on their home than it is worth can now refinance their house and take advantage of lower interest rates. The first version of HARP® was then expanded by relaxing the guidelines to allow even more people refinance and now millions have benefitted from HARP® 1.0 and HARP® 2.0 programs. There may be HARP® 3.0 coming in the future, but nothing has been made official yet.
With the HARP® program, the requirement that the President has “waived” (keep in mind, the lenders are the ones who have actually waived a requirement, not the President) is that you can refinance regardless of what your loan-to-value is.
What the ad doesn’t talk about is that in order to be eligible for the HARP® program, your current loan must be owned by by Freddie Mac or Fannie Mae. And if you have a VA or FHA loan, you are not eligible for the HARP® program.
In order to be eligible for HARP® 2.0, you must first have your loan owned by Fannie Mae or Freddie Mac. First check with Freddie Mac to see about your potential eligibility for HARP® here. Then check with Fannie Mae to see about your potential eligibility for HARP® here.
If you have a VA or FHA loan, you are not currently eligible for the HARP® refinance program , but there are other programs that will let you refinance that are very similar to HARP® called the FHA or VA streamline refinance programs.
The VA Streamline Refinance: A Good Alternative To HARP®
The VA streamline refinance (aka IRRRL refinance) is a great option if you have a VA loan because it essentially has the same benefit of HARP® – you can participate in the program regardless of your home value as long as you meet the other criteria such as not being late on your payments in the last 12 months and having a decent credit score. Some lenders will require an appraisal, some may not – some may require a minimum credit score, some will not.
Perhaps the best news about the VA streamline refinance program is that unlike the HARP® program, the VA streamline program isn’t planned to “go away” any time soon. The VA streamline has been around for years and chances are it will be here for years to come.
It is easy to find out if you are eligible for the VA streamline refinance program – simply submit your information here and we will put you in touch with one of the nation’s leading VA approved lenders who can help you find out if you qualify. Get started now!