Explore Harp's 15-Year Loan Options: Pros And Cons

The Home Affordable Refinance Program (HARP) was a government-backed loan program designed to help homeowners with little to no equity refinance their mortgages at more competitive interest rates. HARP was introduced in 2009 to address mortgage difficulties during the Great Recession and ended in 2018. While the program has expired, there are new programs that allow homeowners to refinance their mortgages. HARP 2.0, for example, lifted the limit on how far underwater a mortgage could be to qualify, and allowed lenders to use automated systems to estimate a home's value. While HARP offered 15-year fixed-rate loans, it is unclear whether HARP 2.0 does as well.

HARP loans are no longer available

The Home Affordable Refinance Program, better known as HARP, was a government-backed program that enabled qualified U.S. homeowners with little or no equity in their homes to refinance their mortgages. It was introduced in 2009 to address the widespread mortgage difficulties that arose during the Great Recession.

HARP was designed to help underwater homeowners, i.e., those who owed more on their mortgage than their home's appraised value. It allowed borrowers with a loan-to-value (LTV) ratio of greater than 80% to refinance their mortgages. Typically, an LTV of that level would mean that homeowners could not secure any other type of mortgage refinancing because of a lack of home equity.

The program underwent a significant change in October 2011 with the introduction of HARP 2.0, which lifted the limit on how far underwater a mortgage could be to qualify. Previously, there was a 125% loan-to-value limit on mortgages refinanced through HARP. The updated rules allowed lenders to use automated systems to estimate the value of a home, saving borrowers time and money.

While HARP loans are no longer available, it is worth noting that the program helped over 3.4 million people save an average of $2,000 a year in mortgage payments. The program's success demonstrates the importance of providing support to homeowners struggling with mortgage payments, particularly during challenging economic periods.

HARP 2.0 lifted the loan-to-value cap

The Home Affordable Refinance Program (HARP) was a government-backed mortgage refinance option for homeowners with little to no equity. It was designed to help underwater homeowners secure better terms and rates. The program was introduced in March 2009 and went through several changes, with the biggest change coming in October 2011 with the introduction of HARP 2.0.

The original HARP program had a complex set of requirements and guidelines, which made it difficult for homeowners to qualify. HARP 2.0 was designed to address these issues and make the program more accessible. One of the key changes in HARP 2.0 was the removal of the 125% loan-to-value (LTV) restriction. Previously, the balance owed on a mortgage could be no more than 25% greater than the value of the home. With the loan-to-value cap lifted, homeowners could qualify for refinancing even if their mortgage was significantly underwater. This was especially beneficial for homeowners in states like Florida, Nevada, and California, where the housing market was hard hit by the Great Recession.

The removal of the loan-to-value cap also meant that the program was no longer concerned with getting a precise home value estimate. Lenders could use automated systems to produce an estimated value for the home, eliminating the need for a costly and time-consuming appraisal process. This made it easier for homeowners to qualify for refinancing and reduced the overall cost of the program.

HARP 2.0 also removed the lender liability clause, which had slowed down the adoption of the original HARP program. This meant that the lender of the refinanced mortgage was not responsible for any fraud or underwriting issues associated with the original mortgage loan. Additionally, HARP 2.0 allowed borrowers to refinance up to 125% of the loan-to-value ratio, providing further flexibility for homeowners.

Overall, the changes made in HARP 2.0, including the removal of the loan-to-value cap, made the program more accessible and beneficial for underwater homeowners. It helped a wider pool of homeowners take advantage of low interest rates and save a substantial amount of money on their mortgage payments.

HARP eligibility requirements

The Home Affordable Refinance Program, or HARP, was a government-backed loan program that aimed to help homeowners with little to no equity refinance their mortgages at more competitive interest rates. The program was introduced in 2009 and ended in 2018, but similar federal mortgage-refinancing programs continue to offer its benefits.

• The loan must have been owned by Fannie Mae or Freddie Mac.
• The mortgage must have been issued on or after October 1, 2017.
• At least 15 months must have passed since the mortgage was issued or last refinanced.
• The borrower must be current with their payments, with no 30-day delinquencies in the last six months and no more than one 30-day delinquency in the past 12 months.
• The loan must not have been previously refinanced through HARP.
• The loan must have closed on or before May 31, 2009, with a loan-to-value (LTV) ratio greater than 80%.
• The mortgage must be current, with no late payments in the last six months and only one late payment within the last year.

It is important to note that while HARP had no minimum credit score requirement, many lenders required borrowers to have a score of at least 620. Additionally, individual lenders may have had their own rules and requirements for the program, known as overlays.

HARP replacement programs

The Home Affordable Refinance Program (HARP) was a government-backed program designed to help underwater homeowners refinance mortgages at more competitive interest rates. It was created in 2009 to help homeowners with little to no equity who were facing predatory lending practices and owed more on their mortgage loans than their homes were worth. HARP allowed refinancing of mortgages with a loan-to-value (LTV) ratio of greater than 80%barrier to securing other types of mortgage refinancing.

HARP 2.0, unveiled in 2011, lifted the limit on how far underwater a mortgage could be to qualify and allowed lenders to use automated systems to estimate a home's value. This made it easier to qualify for the program, and borrowers could also refinance with a different lender. However, individual lenders could still set their own rules, known as overlays, for the program.

HARP ended in 2017 or 2018, and since then, the number of underwater homeowners has fallen sharply due to increasing home values. As a result, there is less need for HARP-like programs, and many homeowners may now be eligible for standard refinancing options. However, some replacement programs have been created to help homeowners with little to no equity refinance. These include:

• Freddie Mac's Enhanced Relief Refinance: This program, also known as FMERR, was put on hold in August 2021 due to a low number of applicants.
• Fannie Mae's HIRO: This program was also paused in June 2021 due to low interest and volume.
• Streamline Refinance for FHA, VA, and USDA Loans: These government programs offer refinancing options for underwater and low-equity mortgages guaranteed by them.
• Cash-out Refinancing and Home Equity Lines of Credit (HELOCs): These options allow homeowners to access the equity in their properties to pay for large expenses, fund home improvements, or get out of debt faster.

HARP refinancing savings

The Home Affordable Refinance Program (HARP) was a government-backed loan refinance program designed to help underwater homeowners secure better terms and rates. The program was created in March 2009 by the Federal Housing Finance Agency (FHFA) to help homeowners who were affected by the 2008 housing market collapse.

HARP allowed borrowers to refinance their current home mortgages with minimal or no equity. The program was aimed at borrowers with a loan-to-value ratio (LTV) of greater than 80%. An LTV of that level often meant homeowners could not secure any other type of mortgage refinancing because of a lack of home equity. HARP allowed borrowers to refinance up to 125% of the loan-to-value ratio.

The biggest change in HARP 2.0 came in October 2011. The program lifted the limit on how far underwater a mortgage could be to qualify. Previously, there was a 125% loan-to-value limit on mortgages refinanced through HARP. Under the updated rules, it didn’t matter how much a home had fallen in value. This change also meant that lenders could use automated systems to produce an estimated value for a home, saving borrowers time and money.

HARP refinancing provided homeowners with lower monthly payments, better mortgage terms, and extended payment dates. It is estimated that, on average, refinancing with HARP saved roughly $174 a month, or $2,088 per year. Over 3.4 million people were helped by the HARP refinancing program, allowing them to keep their homes.

However, HARP did have some limitations. It was only available to borrowers with mortgages backed by Fannie Mae or Freddie Mac, and who were current on their mortgage payments. Additionally, some lenders may have imposed their own loan-to-value restrictions on mortgages they would refinance under HARP 2.0.

Frequently asked questions