About 23% of mortgages in the US are underwater. If you’re one of those upside down mortgage holders, you could find relief with HARP 2.0. That’s what they’re calling the expansion of the Home Affordable Refinance Program that now allows more people to benefit from the plan.

This HARP Sings a Different Tune

HARP is an acronym for the Home Affordable Refinance Program that originated in 2009. The program was established to help those whose homes lost so much value in the housing crash they now owe more on their mortgage than their home is valued at. These homeowners are so deep underwater they have been unable to obtain conventional refinancing because their houses didn’t qualify. The creation of HARP made it possible for some distressed homeowners to arrange new mortgages with more affordable terms.

The program was only going to be available for a short time, but recently the government agreed to extend the program until December, 2013. They also lifted some restrictions and made it possible for more people to qualify for the program, so even if you didn’t meet the qualifications for HARP before, you might now.

How HARP 2 Adjustments Can Benefit You

The changes in HARP 2 have transformed many formerly unqualified candidates into eligible prospects. One of the most significant differences is that the Loan to Value (LTV) cap has been lifted. Before, only homeowners whose houses were worth at least 125% of what they owned on their mortgages met the criteria. Now there is no limit as long as you choose a fixed rate mortgage.
If the lifting of that limitation made you more eligible, you could now enjoy these benefits from the HARP program

* Lower payments
* Lower interest rates which means lower overall payout
* The ability to change to a fixed rate mortgage or to shorten the term of your mortgage
* You can use any mortgage company that participates in the program, so if you’re dissatisfied with your current lender, you may choose a different mortgage company

All these things could make it possible to remain in your home and ease your financial struggles.

Who Qualifies for HARP Now

Not all homeowners who need to refinance will be able to do so with HARP. There are still restrictions. To start with, your mortgage must be backed by Fannie Mae or Freddie Mac and it must have gone to them before April 1, 2009. You can find out if yours falls into this category by going to the Fannie Mae or Freddie Mac websites.
Other qualifications include:

* You must live in the home. It must be your primary residence, not an investment property or second home.

* You must be current on your loan payments, not have any late payments in the last 6 months or more than 1 payment less than 30 days tardy in the 6 months previous to that.

* You must be able to afford the new payment.

* You must benefit from the refinancing in the form of lower payments, lower interest rates, or a more stable form of financing, such as trading an adjustable rate mortgage for a fixed-rate one.
Remember, even if you are behind on your payments now, the program has been extended until the end of 2013. If you hustle, you could still be able to catch up and qualify for the program.

If you think this program may offer the help you need, find out more at the HARP website.

George Gallagher is an economy and loan analyst and writer. His main priority is helping answer student loan consolidation questions from recent graduates.