No. If the existing loan was not acquired by Fannie Mae before June 1, 2009, it is ineligible for HARP 2.0. In March 2011, the initial cutoff date of March 1, 2009, was extended by three months to June 1, 2009, and this revised deadline is still in effect.

In general, if you meet the requirements for a modification program such as HAMP, you will not be eligible for HARP 2.0. A modification program is intended for homeowners who cannot meet their current mortgage payments and are at risk of foreclosure. HARP, on the other hand, is intended for homeowners who have not been able to refinance at lower interest rates because of their homes’ falling values.

However, some struggling borrowers may have entered HAMP on a trial basis in anticipation of greater hardship or default. If their circumstances have since improved and the HAMP trial modification was resolved, and they meet the current eligibility requirements, they may be able to refinance through HARP.

Yes. Although Fannie Mae policy prohibits the refinancing of homes that are currently listed on the market, this policy can be waived for Refi Plus transactions (manual or DU).

No, the second mortgage may not be combined with the first mortgage into the new refinance. No HARP refinance may include a cash-out component, except for closing costs and allowances on certain amounts such as insurance costs, property tax bills and association fees.

Yes, if the existing loan was originally closed in the borrowers’ names and was then transferred to an inter vivos (i.e. living) revocable trust, the loan is still Refi Plus-eligible. The only allowed parties to the trust are the borrowers on the existing loan. See Fannie Mae’s guidelines to make sure the trust abides by all standard requirements.

Yes. Resubordination can be done as part of a DU Refi Plus transaction, as long as it is not used to pay off the second loan or acquire new subordinate financing.

The Home Affordable Refinance Program (HARP) is intended for those homeowners whose homes have lost value, and therefore have not been able to refinance at low mortgage rates. On the other hand, the Home Affordable Modification Program (HAMP) targets borrowers who are in default or dangerously close to defaulting by helping them to avoid foreclosure.

To be eligible for a HARP refinance under Refi Plus, the borrower must:

• demonstrate an ability to meet their monthly loan payments and be current on the existing mortgage
• have no record of delinquency over the last six months, and no more than one 30-day delinquency over the last 12-month period.

To be eligible for a modification through HAMP, meanwhile, the borrower must be able to show that a financial hardship exists and that the borrower’s liquid assets are insufficient for making monthly payments on the existing loan.

Existing borrowers may be removed from the new loan on a Refi Plus transaction, for any reason, as long as the following conditions are met:

• the lender can demonstrate that the borrowers who remain on the loan have made loan payments over the past 12 months from their own funds; and
• the borrower to be removed from the loan is also removed from the deed.

In cases of a borrower who is deceased, proper documentation concerning the borrower’s death must be included in the Refi Plus file. Even in these cases, the lender is still required to demonstrate that the remaining borrower(s) have continued making payments.

For a DU Refi Plus transaction, existing borrowers may be removed from the new loan under the same conditions as above. However, in the case of removing deceased borrowers, there is no need to prove that the remaining borrower(s) have been making loan payments from their own funds.

A HARP refinance allows you to readjust your loan to a more stable product. The following examples demonstrate some of the most common refinance transactions under HARP:

• Refinancing a mortgage loan that includes an interest-only provision into a fully amortizing mortgage (that is, a mortgage that includes amortization of principal as well as equity accumulation)
• Refinancing an adjustable-rate mortgage (ARM) into a fixed-rate mortgage (FRM), and thus preventing the possibility of payment shock
• Refinancing an existing ARM into a new ARM that has a fixed introductory period that lasts five years or longer and is no less than than that of the existing mortgage, thus preventing the oncoming payment shock and extending the initial rate period
• Refinancing a 30-year FRM into a new FRM with a shorter term, such as 25, 20 or 15 years (to build equity and allow for quicker amortization of principal).

Extending the term of the mortgage in itself (for example, making a 30-year FRM into a 40-year FRM) cannot be considered a refinance into a more stable product, unless the borrower’s mortgage payment is also reduced.

Yes, mortgages in high-cost areas and jumbo mortgages do qualify for Refi Plus refinance. These loans can be delivered through a high-balance loan option. All current loan limits apply. The “permanent” limits on high-balance loans apply to any Refi Plus loan whose note is dated October 1, 2011 or later (as the “temporary” limits on these loans expired on September 30).