Ruben, a now retired Air Force officer, and his wife bought a four-bedroom ranch-style home in Sacramento, California, in 2007. Two years later, he was reassigned to the East Coast. It was a sluggish time for Sacramento’s housing market, and he was unable to sell the home. He eventually found a renter, but between what he owned on the mortgage and what he was able to collect for rent, he was losing about $1,000/month.
The financial drain went on for almost four years before Ruben called his mortgage company to ask about refinancing. The mortgage company said he couldn’t qualify because he was underwater on the loan, meaning he owned more than the rental home was worth.
Fortunately, he called a lender offering the federal government’s Home Affordable Refinance Program (HARP), designed to help underwater borrowers. In about three weeks, his loan was refinanced, dropping his interest rate nearly three percentage points, for a savings of $763 a month.
He was so impressed he’s now using that lender to refinance the condo where he now lives to save an additional $160 a month.
Announced in 2009, HARP underwent significant changes  in 2011 enabling more homeowners to refinance even if they are underwater or have little equity in their home and use the HARP lender of their choice.
During the first six months of 2012, when the program changes took effect, over 400,000 homeowners obtained HARP loans, making up a third of the 1.5 million homeowners who have been helped since the program’s inception.
You may qualify for HARP even if you:
- Have little equity or owe more than your home is worth
- Were turned down in the past
- Have a low credit score or income
- Don’t have money for closing costs
To qualify for a HARP loan, your mortgage must be owned by Fannie Mae  or Freddie Mac . A few other restrictions also apply. To find out if you qualify, contact your existing mortgage company (the company listed on your monthly mortgage statement).
If your mortgage company does not offer HARP, use our searchable list of HARP lenders  to find one in your area—any participating HARP lender can refinance eligible loans. But don’t wait—HARP expires December 31, 2015.