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Home Affordable Refinance Progam 2011 (HARP 2) – Temporary Limitations

 Although HARP II is effective December 1st and applications can be accepted there are new updates and temporary limitations. Basically, HARP II is going to have two phases.

Phase 1: Effective December 1, 2011

The first phase of HARP II increased the loan to value (LTV) limit to 125%. The previous loan to value limit was 105%, but the new HARP program is increasing the limit. The 125% LTV limitation will be in place through March 2012 until the Desktop Underwriter (DU) is updated.

This meaning that the most you can refinance is up to 125% of the value of your home. There is also no combined loan to value requirement if you have a second mortgage.

As far as an appraisal, it may be required. This phase of HARP II is going to last for until March 2012.

Phase 2: Effective March 2012

The second phase of HARP II will be implemented in March of 2012 after the Desktop Underwriter (DU) is updated. This phase removes all equity requirements. This meaning, there will be no limit for a loan to value ratio and no equity required in order to refinance. There may also be no appraisal requirement as well.

Both are great phases and changes, but it will be limited temporarily on who can benefit from this program based on the loan to value percentage. Once March 2012 hits, the doors will fly open and many homeowners with underwater mortgages may be helped.

For more information on HARP II requirements visit

Brief video explaining the two phases for the newly revised Home Affordable Refinance Program.

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