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Home Affordable Refinance Program (HARP)

Candlefocus Editor
The Home Affordable Refinance Program (HARP) was a government program that allowed certain eligible homeowners to refinance their mortgages. It was set up in 2009 to help those who could not obtain traditional refinancing because they owed more on their home than it was worth. The program enabled homeowners with loans backed by Fannie Mae and Freddie Mac who were current on their mortgages, but had been unable to take advantage of lower interest rates due to the current market value of their home, to refinance and take advantage of lower interest rates. HARP allowed these homeowners to lower their monthly payment and their overall interest costs in the process.

HARP was a welcome relief for those who were troubled by their high mortgage payments because of their home’s decreased value due to the economic crash of 2008. In addition, it was designed to help those borrowers who were financially eligible but were having difficulty finding a lender that would approve their application for a traditional refinancing.

The requirements for the HARP program were lenient, allowing those who had had mortgages for some time, provided they had no payment defaults in the past 6 months. Homeowners needed to owe more than 80% of the home’s value and have a loan-to-value (LTV) ratio of no more than 125%. In some cases, the LTV limit could be higher if the owner had other financial obligations, like a second mortgage. The interest rates were still lower than what the homeowner had on their previous loan.

Though HARP ended on December 31, 2018, options still exist for those underwater on their mortgages. With the assistance of vetted lenders, homeowners who are underwater still have the ability to refinance into a conventional or FHA loan.

The Home Affordable Refinance Program helped many homeowners take advantage of lower interest rates and lower the overall cost of their home loan. Though the program has since come to an end, there are still options for underwater homeowners. Homeowners should work with a reputable lender to explore their options and determine the best path forward.

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