Homeowners with a high loan-to-value ratio are often denied a refinance on their homes even if they have good credit and have not missed a payment for a year or more. However, on August 25, 2016, a new program was announced, which will make it possible for these homeowners to refinance their homes with less difficulty.
This program, announced by the Federal Housing Finance Agency, the regulator of Freddie Mac and Fannie Mae, will become available in October 2017. To provide options for homeowners between now and then, the Home Affordable Refinance Program (HARP) will continue until September 30, 2017. Before this, HARP was set to expire at the end of 2016.
For homeowners to take advantage of this new program, they must not have missed a mortgage payment within the last six months, and they may have skipped no more than one payment within the past year. They must be in employment, or have some documented source of income, and the refinance has to benefit the homeowner in some way. For example, it could lower their monthly payment or their interest rate. Freddie Mac and Fannie Mae will operate the program.
Those who have refinanced under HARP will not be eligible for the new program unless they refinance into a traditional mortgage. While HARP does have an end date, the new LTV program will not, and those who qualify can make use of the program several times.