HARP vs FHA Streamline Refinance

If you’re in the market for a low interest rate refinance, you may be considering either a HARP or FHA streamline option. Both of these refinancing programs offer valuable benefits to qualified borrowers, from saving money on monthly mortgage payments to building equity. But what are the differences between these two refinancing choices? And which one is best for you? Keep reading to find out.

The Home Affordable Refinance Program (HARP) has helped a great deal of homeowners who owed more on their mortgages than their homes were currently worth. Known as being “underwater,” these homeowners had a lot of difficulty qualifying for traditional refinancing programs, due to the fact that they had little equity, no equity or negative equity. Thanks to HARP, underwater homeowners who have a mortgage owned or serviced by Fannie Mae or Freddie Mac were able to refinance at today’s low interest rates, often saving them a lot of money and helping them build back their equity. Homeowners who were struggling to make their monthly payments also benefited from HARP, as the lower interest rates made their monthly mortgage payments more affordable.

The FHA Streamline Refinance program is similar to the HARP program, in that it offers a selection of U.S. homeowners the opportunity to refinance to today’s low rates. As the name implies, the FHA Streamline allows borrowers to apply and be approved for the loan in a much quicker fashion. This is because the FHA Streamline does not require a lot of the typical documentation that most other loan programs require. The FHA’s official home loan guidelines say the following are not required for an FHA Streamline Refinance:

  • Employment verification
  • Income verification
  • Credit score verification
  • Home appraisal

With a HARP refinance, borrowers must meet the following criteria:

  • Borrowers must be “underwater” in their current mortgage.
  • Borrowers must be current with no more than one missed payment in the last 12 months.
  • Borrowers cannot have ANY missed payments in the last six months.
  • If borrowers have already used HARP 1.0 (an earlier version of the program), they are ineligible for HARP 2.0 (the current version).

So as you can see, there are some significant differences between HARP and FHA Streamline refis, but the biggest difference between the two programs is that to qualify for an FHA Streamline Refinance, the homeowner must currently have an FHA loan. HARP refis can be done for any type of loan, but the mortgage needs to be owned or serviced by Fannie Mae or Freddie Mac.

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