Who Was Eligible for the HARP Refinance Program?
The Home Affordable Refinance Program (HARP) was a federal initiative launched in 2009 to help homeowners refinance, even if their homes had lost value. The program ended on December 31, 2018.
Original and HARP 2.0 eligibility criteria
To qualify for HARP, borrowers had to meet specific federal requirements, though lenders could impose additional guidelines. Key criteria included the mortgage being owned by Fannie Mae or Freddie Mac and originating on or before May 31, 2009. Borrowers needed a good payment history, with no late payments in the prior six months. The loan-to-value (LTV) ratio had to be over 80%. The refinance needed to offer a financial benefit. The program covered primary residences, second homes, and investment properties, and generally, homeowners could only use it once. {Link: Wikipedia https://en.wikipedia.org/wiki/Home_Affordable_Refinance_Program}, {Link: Credit.org https://credit.org/financial-blogs/what-is-harp}, {Link: WalletHub https://wallethub.com/edu/hl/harp/281}, {Link: Premier Tucson Homes https://premiertucsonhomes.com/harp-eligibility/} provide more detailed information on eligibility.
What if a mortgage was not backed by Fannie or Freddie?
HARP was exclusively for Fannie Mae or Freddie Mac loans. Other loan types like FHA, VA, USDA, or jumbo mortgages were not eligible, although other streamlined refinance options existed for them.
HARP Replacement Programs
After HARP ended, Fannie Mae and Freddie Mac introduced successor programs for homeowners with high LTVs, designed to offer similar benefits. These included the Fannie Mae High LTV Refinance Option (HIRO) and the Freddie Mac Enhanced Relief Refinance (FMERR). Both HIRO and FMERR required a minimum LTV of 97.01% for a single-unit primary residence and a strong payment history, with no late payments in the prior six months. However, both HIRO and FMERR were put on indefinite hold as of August 2021 due to low application volume, {Link: The Mortgage Reports https://themortgagereports.com/22445/harp-replacement-high-ltv-underwater-refinance-fannie-mae-freddie-mac} provides a comparison.
Current Options for Underwater Homeowners
With HARP and its successors mostly inactive, other options are available. These include conventional refinancing for those with sufficient equity, FHA Streamline Refinance for existing FHA loans, and VA Interest Rate Reduction Refinance Loan (IRRRL) for VA loan holders. Loan modifications may be an option for those with financial hardship. State-specific assistance programs, such as the Homeowner Assistance Fund (HAF), can provide aid for housing costs. Consulting a certified housing counselor can also help homeowners explore their options.
Conclusion
HARP helped millions during the housing crisis by allowing homeowners with little or no equity to refinance. Although the program ended in 2018 and its replacements are on hold, various options still exist for homeowners with high LTVs based on their specific loan and financial circumstances. The fundamental aims of HARP continue to inform current refinance strategies.
