For nearly 10 years, the Home Affordable Refinance Program (HARP) helped underwater homeowners refinance to lower rates, save money and build equity in their homes.

Although HARP ended in 2018, two federally-backed initiatives for high loan-to-value (LTV) ratio mortgages currently offer homeowners similar benefits with a few changes. These are Fannie Mae’s High LTV Refinance Option and Freddie Mac’s Enhanced Relief Refinance.

What was HARP?

When real estate values fall, homeowners with little equity in their homes can find themselves underwater — owing more on the mortgage than what the home is worth. In this case, refinancing or selling a home can be next to impossible without coming up with a pile of cash, and that’s exactly what happened to millions of homeowners during the housing crisis.

HARP was created in 2009 to give borrowers who were current on their mortgages but had little or negative equity an opportunity to refinance at lower rates. HARP was modified over the years and eventually enabled homeowners to refinance up to 125 percent of the value of their homes without primary mortgage insurance. After being extended twice over the years, HARP expired on Dec. 31, 2018.

“HARP had its purpose, and it worked,” says Frank Ruzicka, senior loan officer at Guild Mortgage in Chesterfield, Missouri. “But I don’t see much demand anymore. There aren’t many people coming in owning more than what their home is worth.”

HARP replacement programs

There was a slight decrease in the number of homeowners with negative equity as of the fourth quarter of 2020, with only 1.5 million — or 2.8 percent of all mortgaged properties — underwater, according to CoreLogic. This was a drop of 21 percent from a year ago and down significantly from the peak of 26 percent in 2009.

Of these loans still underwater, many were likely modified or refinanced through HARP, and are working their way into positive territory.

Today, two federal programs offer a permanent refinance solution for homeowners who are underwater with their mortgages:

  • Fannie Mae’s High LTV Refinance Option
  • Freddie Mac’s Enhanced Relief Refinance

Both allow you to refinance if you owe more than 97 percent of your home’s value on your mortgage. They are essentially an extension of HARP, but with different names and slightly different requirements. They offer benefits including reduced monthly payments, lower interest rates, shorter loan terms and the ability to convert an adjustable rate to a fixed-rate mortgage.
To be eligible for these HARP replacement programs, you must have:

  • A Fannie Mae or Freddie Mac mortgage note date on or after Oct. 1, 2017
  • Current mortgage payments with no 30-day delinquencies in the past six months
  • No more than one 30-day delinquency in the past 12 months
  • No delinquent payments more than 30 days past due


  • No maximum LTV
  • No limit on amount of times you can refinance, as long as you meet seasoning requirement
  • No credit score or debt-to-income ratio requirements in many cases
  • No appraisal needed in some cases


  • Must have a Fannie Mae or Freddie Mac mortgage
  • Must pay closing costs
  • Must be currently in good standing with your mortgage payments and have had no more than one 30-day delinquency in the past year

Key differences between HARP and the new programs

There are several key differences between HARP and its replacements.

While HARP only allowed homeowners to use the program once, these programs don’t have a limit. If you already refinanced through HARP, though, you’re ineligible to use them, according to both agencies’ guidelines.

Additionally, there is now a loan age requirement that didn’t exist under HARP. Fannie Mae and Freddie Mac require underwater loans to be at least 15 months old before they can be refinanced. This enables lenders to get a clearer picture of the borrower’s payment history and reduces loan churning, a predatory lending practice in which a lender encourages a borrower to repeatedly refinance a loan, paying additional fees and interest, without a tangible benefit to the borrower.

The new loan programs are based on the LTV ratio, which is calculated by dividing the remaining loan balance by the property’s appraised value, and is expressed as a percentage. Both programs require a minimum LTV ratio of 97.01 percent for a single-family home — higher than the 80 percent minimum LTV required by HARP. Like HARP, there are no LTV maximums for these refinance programs.

How to apply for HARP replacement programs

If you’re considering refinancing through either of the HARP replacement programs, first call your mortgage lender or servicer to confirm whether your loan is backed by Fannie Mae or Freddie Mac. You can also contact Fannie Mae or Freddie Mac directly:

Bottom line

With mortgage rates still near historic lows, you might benefit by refinancing with one of these products if you’re upside down on your mortgage. Lowering your interest rate and monthly payments not only saves you money, but also enables you to build equity faster. You can use Bankrate’s refinance calculator to see how much you could save by refinancing.

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