Who Qualified for HARP & What Are Your Options Now?
Navigate the evolution of mortgage relief programs. Understand HARP's role and find viable refinancing paths for your home today.
The Home Affordable Refinance Program (HARP) was a government initiative designed to assist homeowners struggling with mortgages that had little to no equity, often referred to as “underwater” mortgages. Launched in 2009 by the Federal Housing Finance Agency (FHFA), HARP aimed to help individuals refinance into more stable loans. It officially concluded on December 31, 2018.
HARP Eligibility Requirements
When HARP was active, specific criteria determined a homeowner’s eligibility for the program. A primary requirement was that the mortgage had to be owned or guaranteed by either Fannie Mae or Freddie Mac. The loan’s origination date was also a strict factor, as the mortgage must have been originated on or before May 31, 2009.
Homeowners needed to demonstrate a responsible payment history to qualify. This meant no 30-day late payments in the six months leading up to the refinance application, and no more than one 30-day late payment within the preceding 12 months. The program was designed for those who were current on their payments but unable to refinance through traditional means due to a lack of equity.
A significant aspect of HARP was its focus on loan-to-value (LTV) ratios. Eligibility generally required an LTV ratio greater than 80%. For fixed-rate mortgages, there was no upper limit on the LTV. Furthermore, homeowners could not have previously refinanced under the HARP program.
The program also had specific property type requirements. The property could be the homeowner’s primary residence, a one-unit second home, or a one- to four-unit investment property.
Current Mortgage Refinance Options
While HARP is no longer available, homeowners have several refinance options today. Conventional refinancing is a widely used option for those with sufficient home equity and strong credit. These loans offer competitive rates and terms for borrowers meeting standard guidelines.
Government-backed refinance programs provide additional pathways. The Federal Housing Administration (FHA) offers the FHA Streamline Refinance for existing FHA loan holders. The Department of Veterans Affairs (VA) provides the VA Interest Rate Reduction Refinance Loan (IRRRL) for eligible veterans with existing VA loans.
Fannie Mae and Freddie Mac also offer refinance initiatives for homeowners with limited equity. Fannie Mae’s RefiNow and Freddie Mac’s Refi Possible programs help low- and moderate-income borrowers reduce monthly payments.
The Home Affordable Refinance Program (HARP) was a government initiative to assist homeowners with “underwater” mortgages. Launched in 2009 by the Federal Housing Finance Agency (FHFA), HARP aimed to help individuals refinance into more stable loans. It officially concluded on December 31, 2018.
HARP Eligibility Requirements
When HARP was active, criteria determined eligibility. A primary requirement was that the mortgage had to be owned or guaranteed by Fannie Mae or Freddie Mac. The loan’s origination date was also a strict factor, as the mortgage must have been originated on or before May 31, 2009.
Homeowners needed to demonstrate a responsible payment history to qualify. This typically meant no 30-day late payments in the six months leading up to the refinance application, and no more than one 30-day late payment within the preceding 12 months. The program was designed for those who were current on their payments but unable to refinance through traditional means because their home was worth less than the outstanding loan balance. Borrowers who had already defaulted were not eligible.
HARP focused on loan-to-value (LTV) ratios. Eligibility generally required an LTV ratio greater than 80%, indicating limited or negative equity. For fixed-rate mortgages, there was no upper limit on the LTV, making it accessible to deeply underwater homeowners. This flexibility allowed many who were severely “underwater” to refinance.
Furthermore, homeowners must not have previously refinanced under HARP. The property could be the homeowner’s primary residence, a one-unit second home, or a one- to four-unit investment property.
Current Mortgage Refinance Options
While HARP is no longer available, homeowners have several refinance options today. Conventional refinancing is a widely used option for those with sufficient home equity and strong credit. These loans, often backed by Fannie Mae and Freddie Mac, offer competitive rates and terms for borrowers meeting standard guidelines. Conventional refinances include rate-and-term options to reduce interest rates or shorten loan terms, and cash-out options that allow homeowners to borrow against their home’s equity.
Government-backed refinance programs provide additional pathways. The Federal Housing Administration (FHA) offers the FHA Streamline Refinance for homeowners with existing FHA-insured mortgages. This program typically requires less paperwork, often waives the need for a new appraisal or income verification, and aims to provide a “net tangible benefit” like a lower interest rate or a move from an adjustable to a fixed rate. Borrowers must be current on their payments, with generally no more than one 30-day late payment in the last 12 months.
The Department of Veterans Affairs (VA) provides the VA Interest Rate Reduction Refinance Loan (IRRRL), also known as a VA Streamline Refinance, for eligible veterans with existing VA loans. This option generally requires less documentation and often does not necessitate an appraisal or credit underwriting. The IRRRL aims to lower the interest rate, reduce monthly payments, or convert an adjustable-rate mortgage to a fixed rate, requiring a “net tangible benefit” for the borrower. While there are no LTV limits set by the VA, lenders may have their own requirements, and a funding fee typically applies, which can often be rolled into the loan.
Fannie Mae and Freddie Mac also offer refinance initiatives designed to help homeowners, particularly those with limited equity or lower incomes. Fannie Mae’s RefiNow program targets homeowners with existing Fannie Mae-backed loans who have incomes at or below 100% of their area’s median income. It allows for LTVs up to 97% and requires a reduction in the interest rate by at least 50 basis points and a lower monthly payment.
Similarly, Freddie Mac’s Refi Possible program offers expanded eligibility for low- and moderate-income borrowers with existing Freddie Mac-owned mortgages. This program also allows for LTVs up to 97% and requires a reduction in interest rate of at least 50 basis points, alongside a reduction in the monthly principal, interest, and mortgage insurance payment. Both RefiNow and Refi Possible generally require a solid payment history, with no more than one 30-day late payment in the past 12 months.