The HARP 2.0 Refinance, Required Borrower Benefits

One of the requirements of the HARP 2.0 Refinance is that the borrower must have at least one benefit from the transaction.

The Fannie Mae guide is more specific calling the benefit a “movement to a more stable product” namely:  The HARP 2.0 Refinance

  • A mortgage loan with an interest-only feature to a fully amortizing mortgage product
  • An adjustable rate mortgage (ARM) to a fixed rate mortgage (FRM) which would eliminate the potential for future payment shock
  • An ARM to a new ARM with an initial fixed period of five years or more, and equal to or greater than that of the existing mortgage (elimination of pending payment shock and movement to the same or longer initial fixed interest rate period)
  • A 30 year fixed rate mortagge to a 15 year, 20 year, or 25 year fixed rate mortgage (accelerated amortization of principal and building of equity)

Using the HARP Deal, movement to a more stable product would not include simply an extension of the mortgage term, for example, from a 20 year fixed rate mortgage to a 30 year fixed rate mortgage.  However, this type of transaction is permissible for the HARP 2.0 Refinance IF AND ONLY IF there is a reduction in the mortgage payment.

And remember, existing subordinate liens may not be paid off with proceeds from the HARP 2.0 Refinance.  Any subordinate lien must be re-subordinated.  Also, there can be no new subordinate liens added during the HARP 2.0 Refinance transaction.

California property owners interested in the HARP 2.0 Refinance, contact Kevin Kueneke with The Lending Company today by calling (760) 500-1919 or inquire online at:


About Kevin Kueneke

I am a Sr. Loan Officer with The Lending Company in San Diego, California. The HARP Deal is a very important part of the housing recovery, and I want to help you take advantage of this great program. View all posts by Kevin Kueneke

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