While helping eligible borrowers refinance through the Home Affordable Refinance Program, one may be aware of programs developed by certain state Housing Financing Agencies that use Hardest Hit Fund program funds to help borrowers refinancing through HARP.

The Single-Family Seller/Servicer Guide Bulletin 2012-12 announces that, effective immediately, Freddie Mac permits the use of HHF program funds with Freddie Mac Relief Refinance Mortgages to pay down or curtail the outstanding mortgage balance on a borrower’s existing loan at the time of refinancing and/or to pay closing costs, financing costs and prepaids/escrows for the Relief Refinance Mortgage, as long as funds provided by the HFAs do not result in a lien on the property.
The Bulletin’s additional requirements include:

• Documentation verifying the terms and conditions of the HHF program funds provided to the borrower.
• Instructions for calculating the monthly debt payment-to-income ratio when HHF funds must be repaid.
• Instructions to reflect HHF program funds on the HUD-1 Settlement Statement.

For more information read the Single-Family Seller/Servicer Guide Bulletin 2012-12.