A new blueprint has been announced for the revised Home Affordable Refinance Program (HARP 2).  Freddie Mac and Fannie Mae distributed guidance this month, addressing most of the HARP 2 details.

The meat and potatoes of the HARP 2 plan: The new revised plan puts an end to risk-based loan fees. It also ensures that lenders won’t have to pay for losses on loans that go into default due to underwriting mistakes (significantly streamlining the underwriting procedure).

While lenders can start accepting applications in December, it could still take months before the new loans are given. Fannie Mae, for example, has stated it won’t begin purchasing select types of refinanced loans until March.

To qualify under the new system, the existing loan must have been purchased by Freddie Mac or Fannie Mae before June 1st, 2009. The loan balance must also be over 80% of the house's market value. Individuals that previously refinanced through HARP will not be eligible.

Under the new program, borrowers can refinance into a new fixed-rate loan regardless of how much is owed (the current HARP plan caps the new loan at 125% of the house's market value).

Many questions still remain regarding the details of the new program, particularly regarding bank interest rates, but so far the program is promising to make big fans of aspiring homeowners. Stay tuned for more details as more aspects of the HARP 2 program are finalized!