HARP Refinance - HAMP Loan Modification

With the Harp Loan, is this a conventional loan? Does it in any way affect my Credit Score? I've heard of some loans that affect your credit score and I want to make sure this doesn't happen.

2 Answers

The definition of  H.A.R.P. is Home Affordable *Refinance Program, this is different from the H.A.M.P. which stands for Home Affordable Modification Program.

The Harp is a refinance and the Hamp is for loan modifications. There are only available to current Fannie Mae and Freddie Mac  loan holders.

If you do not know if Fannie Mae or Freddie Mac owns your loan you can check it out for free on the government website. It is called www.makinghomesaffordable.gov. Once you are there you can check the loan look up tab and enter your information to each investor to see if theyare the owner of your loan.

If you do have one of these companies as your investor you MAY be eligible to participate in either program based on your particular needs.

The major benefit of the Harp program is that it allows homeowners who may be upside on their homes to refinance when they otherwise could not. You still need to be current and be able to qualify, but this program will go up to 125% of your homes value. For example if you current value of your home is $100,000 on an appraisal then you can have a maximum loan amount of $125,000.

Your loan officer should be able to assist you with this, or you can always contact me for more information as well.

The Harp Loan is a loan that is offered to individuals with loans serviced by Fannie Mae or Freddie Mac, so technically, yes, it would be considered a conventional loan. Your concern doesn’t relate to a specific type of loan, but it does relate to the process of doing a loan.

When you do a loan, whether it be for a home (HARP or not), a car, a credit card, a student loan, etc, the creditor has to pull your credit. Doing so can sometimes temporarily reduce your credit score by a couple points. The next month your FICO score is typically back to normal.

There is also a difference between “soft” credit pulls and “hard” credit pulls. Hard credit pulls are more damaging, but have to do with pulls by creditors, credit card companies, retailers, and collections companies. Soft credit pulls are related to credit reports run my mortgage and auto companies. In those cases, even with multiple pulls, your credit is really minimally affected.