The Federal Housing Finance Agency (FHFA) announced Monday a program that will allow homeowners who are “underwater” — owing more on their homes than they are worth — to refinance at today’s low interest rates.
The Home Affordable Refinance Program (HARP) will apply to borrowers of Fannie Mae and Freddie Mac, and FHFA estimates that up to 1 million borrowers will use the program, according to The Washington Post.
“We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach,” said FHFA Acting Director Edward J. DeMarco in a press release. “Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets.”
HARP is the only program by which borrowers owing more on their property than it is worth are given the option to refinance at a lower interest rate. The new changes will remove a number of fees and rules, thereby making it easier for these “underwater” homeowners to act.