SAN FRANCISCO (CBS 5) – An expanded government program is helping some deeply underwater homeowners refinance their mortgages to take advantage of record low interest rates.

HARP 2.0, a more liberal version of the original Home Affordable Refinance Program, was unveiled in 2011. The new program started picking up steam just a few months ago, according to Rick Harper of the Consumer Credit Counseling Service. Harper said the qualifications have been relaxed to allow people who owe significantly more than their home is worth to participate.

John and Faina Oliver of Vallejo are among those underwater homeowners who’ve qualified for a much better rate under HARP 2.0. Nine years ago, they paid $337,000 for their home. It’s now valued at about $100,000 less. Two months ago, they slashed their mortgage rate from 5.875% to 3.5%.

“It was a big relief,” John Oliver told ConsumerWatch.

Rick Harper of the Consumer Credit Counseling Service, a non-profit HUD-approved counseling agency, said there are a lot of differences between traditional refi’s and those done under HARP 2.0. Among them: “They’re not reviewing credit in the same way that they would for someone who is going through a traditional refi.”

Harper said to qualify for HARP 2.0, homeowners must be current on their payments, with only one missed payment or less in the past 12 months. The loan must be owned by Fannie Mae or Freddie Mac as of January 1, 2009. Harper said unlike the original HARP, the new version also applies to second homes and rental properties.

Harper said the first step is to contact your servicer and see if they are participating in HARP 2.0, or contact a non-profit HUD-approved Housing Counseling agency for help.

Click here to find out more about HARP 2.0

Click here to find HUD approved housing agencies

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)


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