7 questions everyone asks about the harp refinance program

September 25, 2018 - 5 min read

Editor’s Note: HARP expired 12/31/18. However, Fannie Mae and Freddie Mac recently rolled out new High LTV refinances. Read about them here. This post will remain active for archival purposes. 

HARP 2 expires December 2018

Since its 2009 inception, the Home Affordable Refinance Program (HARP) has helped more than 3.3 million U.S. households to refinance.

The program could help hundreds of thousands more households, too — if only more homeowners would apply.

For whatever reason, some U.S. homeowners think the HARP loan is “too good to be true.”

Over the last 8 years, the HARP mortgage refinance has helped to support the U.S. economy and saved homeowners billions of dollars in mortgage payments, collectively. Homeowners who have lost home equity have used HARP to refinance to today’s mortgage rates without incurring new mortgage insurance.

The typical refinancing households save more than 30% annually on their payments.

If your home has lost value since purchase — and even if you’ve been previously turned down! — consider submitting a HARP home loan refinance application today. Today’s mortgage rates are low and the potential for savings is huge.

Plus, you may not have much longer to get your application in. The HARP refinance program expires in December 2018.

Verify your HARP eligibility

The basics of the HARP 2.0 mortgage

In 2009, the government launched its Home Affordable Refinance Program (HARP) as part of that year’s economic stimulus program. HARP was meant to give homeowners access to a refinance despite having little or no home equity.

was basic.

In order to qualify for HARP, homeowners had to show their current mortgage was backed by Fannie Mae or Freddie Mac on, or prior to May 31, 2009; that their mortgage payment history was strong; and that their home’s loan-to-value was 125% or lower.

Between 2009-2011, HARP reached close to one million households. It would have reached more than one million households, it was determined, if not for the 125% loan-to-value restriction, and for a specific HARP clause which increased a mortgage lender’s typical mortgage liabilities.

So, to reach more households, HARP 2.0 was released.

HARP 2.0 was an improvement upon HARP 1.0. It removed the 125% loan-to-value restriction which helped homeowners in hard-hit states such as Florida, Nevada and California get access to the HARP program. It also removed the lender liability clause which had slowed HARP’s adoption.

Program changes were a hit. HARP 2.0 closed as many loans in its first 12 months as the original HARP 1.0 closed in its first three years.

Today, however, HARP volume has slowed. Homeowners have said that they’re unsure of how the program works; and, that they’ve been “turned down in the past” and didn’t know they could re-apply.

But, wouldn’t you know: according to Ellie Mae, mortgage lenders are approving a higher percentage of mortgage refinances than during any period since HARP’s launch 8 years ago.

It’s an excellent time to apply for a HARP loan refinance.

Verify your HARP eligibility

7 things to know about HARP 2.0

The government is going on the offensive.

Fannie Mae and Freddie Mac recently launched a HARP public relations campaign meant to educate U.S. homeowner about the HARP program’s benefits.

The agencies believe that the majority of HARP-eligible homeowners are either unaware that the program exists, don’t know about the program benefits, or both.

This website receives a lot of emails from homeowners wondering about HARP and whether they’re eligible to refinance. Here are some of the common HARP questions (and their sometimes-surprising answers).

1. Can I refinance with HARP if I have a second mortgage?

Yes, you can refinance with HARP if you have a second mortgage. However, in accordance with HARP guidelines, you cannot combine your two mortgages in a cash-out refinance.

To refinance your first mortgage via HARP, but leave your second mortgage unchanged, your second mortgage lender will agree to subordinate its mortgage, which is a fancy way of saying that second mortgage lender will give permission for you to replace the existing first lien on title.

2. Can I I refinance with HARP even though I have no equity in my home?

Yes, you can refinance your home via HARP if you have no equity. That’s exactly the premise of the program!

Via HARP 2.0, homeowners can refinance no matter how far underwater they are with their mortgage. This is among the reasons why the HARP refinance has been so popular in Las Vegas, Nevada; Phoenix, Arizona; and other hard-hit areas.

HARP is the “underwater mortgage program” — of course you can use it when you have no home equity.

3. I was already turned down for HARP once. Can I actually apply for HARP again?

Even if you’ve been turned down for HARP in the past, it can make sense to apply for HARP again. This is because HARP-approved lenders often use in-house variations of the official, government-issued HARP guidelines.

These variations, which are officially known as “investor overlays”, differ from bank-to-bank. If you were turned down by Wells Fargo, for example, you may be able to get approved by Quicken.

If at first you don’t succeed, apply, apply again.

Verify your HARP eligibility

4. Can I refinance my home via HARP even though it’s not my primary residence?

HARP 2.0 can be used to refinance homes of any occupancy type. Investment properties can be refinanced via HARP, and so can second homes and vacation properties. HARP can be used in all 50 states, the District of Columbia, and all U.S. territories.

5. If my lender doesn’t offer HARP, can I apply with another bank instead?

Not all lenders offer The Home Affordable Refinance Program; this is true. However, U.S. homeowners are free to refinance with any HARP-approved lender.

This freedom was among the improvements of HARP 2.0. There are now thousands of lenders making HARP 2.0 mortgages.

6. Can I use HARP even though I am not behind on my mortgage payments?

The HARP refinance program is not meant for homeowners who are behind or delinquent with their mortgage payments. HARP can only be used for homeowners who are current. The HARP program is not meant to save a person’s home from foreclosure. Homeowners facing difficulty with payment should contact their loan servicer immediately.

7. Can I use HARP even though my loan has private mortgage insurance?

You can use HARP 2.0 for . This is a change from HARP 1.0 and applies to loans with both borrower-paid mortgage insurance (BPMI) and lender-paid mortgage insurance (LPMI).

However, it can be difficult to find banks to offer a PMI program.

If you try to refinance your loan with PMI and you are turned down by a lender, apply again somewhere else. You may get a better outcome.

What are today’s mortgage rates?

There are multiple hundreds of thousands of households which could refinance via HARP and save substantial money. Many you are among them.

Get today’s live mortgage rates now. Your social security number is not required to get started, and all quotes come with access to your live mortgage credit scores.

Time to make a move? Let us find the right mortgage for you

Dan Green
Authored By: Dan Green
The Mortgage Reports contributor
Dan Green is an expert on topics of money and mortgage. With over 15 years writing for a consumer audience on personal finance topics, Dan has been featured in The Washington Post, MarketWatch, Bloomberg, and others.