What is HARP and what is it designed to do?

HARP is an abbreviation for the Home Affordable Refinance Program, a special refinancing option designed to help people make their mortgage more affordable - welcome news for anyone having trouble making their mortgage payments. Particularly, homeowners who owe more on their home than it's currently worth.

Known as being underwater or upside down in a mortgage, owing more than your home is currently worth is an unfortunate situation that many American homeowners have found themselves in. Since the housing crisis, many homes have dropped in value across the United States. People who paid $300,000 for a home in 2006 are finding their homes may be worth much less in today's economy. This can make it difficult to secure traditional refinancing, or even to sell the property should they want to downsize or relocate.

To qualify for HARP, a few criteria must be met:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae. 
• The sale of the mortgage must have been finalized to Fannie Mae or Freddie Mac on or before May 31, 2009. 
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009. 
• The current loan-to-value (LTV) ratio must be greater than 80%. 
• The borrower must be current on the mortgage at the time of the refinance, with a good payment history in the past 12 months.