HARP – Home Affordable Refinance Program

HARP (Home Affordable Refinance Program)

Many homeowners pay their mortgages on time but are not able to refinance to take advantage of today’s lower mortgage rates. A Home Affordable Refinance may help many of these homeowners who otherwise would be unable to refinance and whose loans are held by Fannie Mae or Freddie Mac refinance into a more affordable or more stable mortgage.

The HARP program was first rolled out by the Obama Administration in March of 2009. It allowed a loan-to-value of up to 125%. For instance, if a home was worth $100,000, the new loan could be $125,000.

Since then, the government has realized the 125% cap was keeping too many homeowners from refinancing. Many homeowners owed twice what their home was worth or more, which is equal to a 200%+ loan-to-value.

In March of 2012, HARP 2.0 was released and no longer had the loan-to-value limit. This enhancement has proven very effective, with 790,619 homeowners refinancing between January and October 2012, according to the Federal Housing Finance Agency.

HARP 3.0 is the proposed program that has been discussed in Congress. None of the HARP bills introduced have passed.

It’s uncertain whether HARP 3.0 will pass Congress, or what the final version would look like. If it is signed into law eventually, it would help even more homeowners refinance out of high interest rate mortgages.

If you’re not behind on your mortgage payments but have been unable to get
traditional refinancing because the value of your home has declined, you may be
eligible to refinance through the Home Affordable Refinance Program
(HARP). HARP is designed to help you get a new, more affordable, more
stable mortgage. HARP refinance loans require a loan application and
underwriting process, and refinance fees will apply.