Can You Still Apply for HARP Refinance? Replacement Programs Paused

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Jan. 20 2022, Published 3:06 p.m. ET

For years, the FHFA (Federal Housing Finance Agency) sponsored a program called HARP (Home Affordable Refinance Program). Government programs can be confusing, so we’re demystifying it.

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Here’s all about HARP, who qualified for the federal program while it was available, and whether you can still apply for replacement programs.

What was HARP?

In 2009 after the housing crash, the U.S. government launched HARP as a way to help people whose home value declined since they purchased the home and weren't able to refinance their loans.

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According to the FHFA, HARP works in two ways:

  1. “By permitting the transfer of existing mortgage insurance to their newly refinanced loan”

  2. “By allowing those without mortgage insurance on their previous loan to refinance without obtaining new coverage”

HARP was available for a decade ending December 31, 2018, during which nearly 3.5 million borrowers refinanced through the program. HARP is no longer available for applications, but there are replacement programs available.

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HARP replacement programs are currently paused.

There are two HARP replacement programs, but they’re currently paused indefinitely:

  1. Fannie Mae’s high loan-to-value refinance program

  2. Freddie Mac’s enhanced relief refinance program

The two government-sponsored entities would buy mortgages and then resell them at a more affordable price that’s amenable to homeowners. They were actually more expansive than HARP due to the fact that homeowners didn’t have to be underwater to take advantage of the programs.

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Do you qualify for government refinance programs?

In order to qualify for the Fannie Mae and Freddie Mac refinance programs, you need to already have mortgages through the respective entities. The entities make their acceptance decisions based on your home’s LTV (loan-to-value) ratio. A high LTV ratio means that you have paid just a little bit of your home off.

LTV = 100 x (Amount owed on the loan / Appraised home value)

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For most lenders, this would be a high-risk scenario, which makes it difficult (or impossible) to refinance your mortgage. However, the Fannie Mae and Freddie Mac refinance programs focus specifically on high LTV cases.

The Fannie Mae refinance option has a minimum LTV ratio of 97.01 percent for one-unit homes. Your Fannie Mae mortgage note must be from October 1, 2017, or after with at least a 15-month gap. You must be up to date on your payments and you can't have previously refinanced through HARP or certain other programs.

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The Freddie Mac refinance option has a minimum LTV ratio of 97.01 percent for one-unit homes. Your Freddie Mac mortgage note must be from November 1, 2018, or after with at least a 15-month gap. You must be up to date on your payments and you can't have previously refinanced through HARP.

Can you apply for HARP replacement programs?

Unfortunately, HARP replacement programs are indefinitely paused. Regardless of your Fannie Mae or Freddie Mac eligibility, they aren't accepting applications.

Keep your eyes peeled for updates on the Fannie Mae’s high LTV refinance option and Freddie Mac’s Enhanced Relief Refinance Mortgage for future changes.

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