The HARP program helped borrowers who had mortgage loan balances that exceeded their property value by allowing them to refinance their loan—ideally, at a lower rate. However, this program expired at the end of 2018.

When interest rates fall, many homeowners will refinance their mortgage to lock in a lower interest rate, which can reduce a borrower's monthly payment or allow a homeowner to build equity more quickly.

However, homeowners who typically have trouble refinancing are those with 澳洲幸运5开奖号码历史查询:negative equity, meaning the mortgage exceeds the property value, securing the loan as collateral. In the third quarter of 2024, nearly one million homes were in negative equity.

In the past, borrowers with 澳洲幸运5开奖号码历史查询:underwater mortgages could take advantage of lower interest rates by refinancing through the 澳洲幸ও运5开奖号码历史查询:Home Affordable Refinance Program (HARP).

Discover the benefits that HARP p⛎rovided to homeowners an🍨d available options for refinancing or modifying a mortgage.

What Is the HARP Loan Program?

HARP was a government program established in April 2009 under the 澳洲幸运5开奖号码历史查询:Federal Housing Finan๊ce Agenc♓y (FHFA) in response to the 澳洲幸运5开奖号码历史查询:2007-08 financial crisis. The idea was to help homeowners refinance loans on properties that were worth less than their outstanding mortgage. Approximately 3.45 million borrowers took advantage of the program.

HARP Loan-to-Value (LTV) Requirements

HARP aimed to help borrowers with a 澳洲幸运5开奖号码历史查询:loan-to-value ratio (LTV) greater than 80%. Typically, these borrowers have trouble securing refinancing because of a lack of home equity, preventing them from🌃 benefiting from fa𝄹lling interest rates.

Originally, borrowers were eligible for HARP assistance if their LTV ratio was no greater than 105%. This cap was raised to 125% in July 2009, then lifted entirely in October 2011.

HARP by the Numbers

Between the program's inception and February 2015, approximately 3.29 million mortgages were refinanced under HARP. Of these, 2.3 million had an LTV ratio of 80% to 105%. Over 567,000 mortgages had an LTV of 105% to 125%, while 421,522 loans had ratios greater than 125%.

HARP was originally scheduled to expire at the end of 2016, but the government extended the program by two years. By the end of Dec. 2018, HARP refinances totaled 3,494,395 since its inception in 2009.

What Were 🍬the Qualifying Criteria for a HARP Loan?

Homeowners were required to meet 🐻the following criteria to qualify for HARP:

• A basic requirement was a mortgage owned or guaranteed by 澳洲幸运5开奖号码历史查询:Freddie Mac or 澳洲幸运5开奖号码历史查询:Fannie Mae, closed on or before May 31, 2009.
• The original loan must have had an LTV ratio of at least 80%.
• Crucially, the borrower could not be 澳洲幸运5开奖号码历史查询:delinquent on their mortgage payments. They could have no late payments over the past six months and no more than one 30-day late payment over the preceding 12 months.
• Borrowers needed to have a 660 minimum credit score.

The program didn't actually lend money. Instead, HARP worked with lenders to offer refinancing. Homeowners could check with their current lender or access a HARP website to see if the lender participated in ไthꦍe program.

What Replaced the HARP Loan Program?

A𝔉lthough HARP has ended, Fannie Mae and Freddie Mac offer options for financially distressed borrowers to refinance or modify their loans.

Flex Modification

Fannie Mae and Freddie Mac offer a Flex Modification program for existing loans with past-due payments of more than 60 days. These are loan modification programs that help financially distressed borrowers lower their monthly payments by 20%.

The payment reduction can result from a series of s𝔍teps that include:

• Reduction of loan's interest rate (if eligible) 
• Loan term extension, such as 40 years versus the standard 30-year mortgage loan
• Forbearance of a portion of the loan principal (borrowed amount), which represents a temporary reduction or modification to the loan balance

Not all loan modifications may achieve the 20% payment reduction goal.

Freddie Mac High LTV Refinance

Freddie Mac offers borrowers a refinance with a 95% loan-to-value ratio (LTV) for a one-unit or single-family home. Borrowers can take a cash-out refinance but must have an 80% LTV.

The Bottom Line

Before HARP expired, the program helped millions of homeowners to refinance underwater mortgages. While HARP didn't decrease the amount they owed, borrowers benefited from lower interest rates and monthly payments. Although HARP no longer exists, Fannie Mae and Freddie Mac offer programs for borrowers.