What Was the Original Federal HARP Program?
The Home Affordable Refinance Program (HARP) was launched by the FHFA in March 2009 to help homeowners struggling with 'underwater' mortgages. An underwater or upside-down mortgage occurs when a homeowner owes more on their mortgage than the home is currently worth due to declining property values. During the 2007-2008 financial crisis, this situation prevented many responsible homeowners from refinancing their loans to get lower interest rates.
The program was designed specifically for homeowners whose loans were owned or guaranteed by Fannie Mae or Freddie Mac. Its goal was to allow these borrowers to refinance into a more affordable and stable mortgage, even if they had little or no equity in their homes. Over its lifespan, HARP helped more than 3.4 million homeowners.
Key Eligibility Criteria for Federal HARP
- Your mortgage had to be owned or guaranteed by Fannie Mae or Freddie Mac.
- The mortgage must have originated on or before May 31, 2009.
- You had to be current on your mortgage payments, with no late payments in the past six months.
- The loan-to-value (LTV) ratio had to be greater than 80%.
Why HARP is Often Associated with Scams
Because the federal HARP program was so popular and provided significant relief to millions, scammers began exploiting its name to defraud homeowners. Even after the program's official end date of December 31, 2018, deceptive marketing tactics and outright scams persisted.
Common scam tactics include:
- Upfront Fees: Legitimate government assistance programs and reputable lenders will not ask for an upfront fee for counseling or to initiate the refinancing process.
- High-Pressure Tactics: Scammers may create a false sense of urgency to pressure homeowners into providing personal and financial information quickly.
- False Promises: Fraudulent ads might claim the government will "pay off your mortgage" or make unrealistic guarantees of savings.
- Requesting Personal Data: Be wary of any offer that asks for sensitive information like your Social Security number, banking details, or other personal data over unsecure channels.
- Improper Communication: Official government communication is typically via mail, but scammers may use unsolicited phone calls, emails, or text messages.
Current Refinance Options and Alternatives to HARP
With the federal HARP program gone, the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have launched replacement programs for homeowners with high loan-to-value (LTV) ratios. These programs carry on the legacy of HARP by helping eligible borrowers refinance into more affordable mortgages.
- Fannie Mae RefiNow™: A new option for homeowners with a Fannie Mae-owned mortgage, allowing them to refinance with up to a 97% LTV ratio and potentially lower rates.
- Freddie Mac Refi Possible℠: Very similar to Fannie Mae's RefiNow, this option is available for homeowners with mortgages owned by Freddie Mac. It also has a maximum 97% LTV ratio.
- Flex Modification Program: For borrowers with loans owned by Fannie Mae or Freddie Mac who are struggling with payments, this modification program can lower monthly payments.
For more detailed information on HARP replacement programs and other refinance options, you can consult resources like LendingTree's guide to HARP alternatives.
Comparison of Federal HARP and Replacement Programs
| Feature | Federal HARP (Expired Dec. 2018) | Current Replacement Programs | Example Programs |
|---|---|---|---|
| Eligibility | Specific to mortgages owned by Fannie Mae/Freddie Mac originated before June 2009. | Available for eligible current Fannie Mae/Freddie Mac loans. | RefiNow™, Refi Possible℠ |
| Loan-to-Value (LTV) | Originally capped, later removed all LTV limits for fixed-rate loans. | Maximum LTV of 97% for specific refinance programs. | RefiNow™, Refi Possible℠ |
| Appraisal | Waived in many cases for streamlined refinances. | Often required, depending on the program. | RefiNow™, Refi Possible℠ |
| Application Status | Program is expired and no longer accepting applications. | Actively accepting applications for eligible borrowers. | RefiNow™, Refi Possible℠ |
How to Verify Your Mortgage and Avoid Scams
If you receive a suspicious offer related to HARP, the most important step is to verify who owns your mortgage. Since both Fannie Mae and Freddie Mac have ownership lookup tools, you can quickly check if your loan is serviced by one of them. This is the first key step to avoiding a scam that relies on you being unaware of your loan's status.
- Check Fannie Mae's Lookup Tool: Visit the official Fannie Mae website or use a tool like the one provided at
knowyouroptions.com/loanlookup. - Check Freddie Mac's Lookup Tool: Visit the official Freddie Mac website or use their tool at
freddiemac.com/mymortgage. - Consult Your Lender: If you receive a notice from a third party, contact your current mortgage lender directly using a trusted phone number you already have, not one provided in the suspicious message.
The Legacy of HARP
Even though it ended years ago, HARP's legacy is significant. It demonstrated the value of targeted government assistance in a housing crisis and laid the groundwork for today's refinance options. The program helped millions of homeowners secure better interest rates, avoid foreclosure, and regain financial stability. Its success helped normalize the idea that responsible homeowners shouldn't be penalized by economic conditions beyond their control.
By understanding the history and expiration of the federal HARP program, homeowners can better navigate the current financial landscape and protect themselves from deceptive schemes. Awareness of the legitimate programs that have since replaced it is the best defense against falling for a scam.
