The Home Affordable Refinance Program (HARP) is part of the federal government's Making Home Affordable initiative. Making Home Affordable's goal is to help homeowners stay in their houses and avoid foreclosure. HARP is the refinace option under the initiative. If your loan is owned or guaranteed by Freddie Mac or Fannie Mae, and you’re current on your mortgage, you may be able to refinance (even if your home has lost value) and get a mortgage with a lower interest rate, a lower monthly payment, a fixed-rate, or a shorter mortgage term.
The Home Affordable Refinance Program was intended to transform millions of Fannie Mae and Freddie Mac loans into stable, 15- or 30-year fixed-rate, low-interest mortgages. Payments under the refinanced loans increased in some cases, if the homeowner could afford them. The tradeoff for higher payments in the short term was that the amounts were stable in the long term -- no more worrying over interest rate resets. The refinance program applies only to mortgages owned or backed by Fannie Mae and Freddie Mac -- about half of the nation's mortgages.
Although the program was intended to significantly decrease the mortgage default rate and stabilize home prices, after two years it was clear that it was falling far short of expectations. Of the four million to five million homeowners the plan was supposed to help, only 900,000 borrowers successfully refinanced through the program. As a result, in November 2011 the federal government announced changes to HARP that loosened the eligibility requirements in the hopes of helping more homeowners.
As of September 2014, around 650,000 homeowners remain eligible take advantage of the program. (To find an interactive map showing the general number of HARP-eligible homeowners by metropolitan area, county, or zip code, go to www.harp.gov and click on “Are You Eligible?” and then “View Eligibility Map.” You can also find a lot of good information about HARP on this website.)
To qualify for a refinance under HARP, you must meet the following eligibility requirements:
To learn more about this program, visit the federal government's Making Home Affordable website at www.makinghomeaffordable.gov.
The government may at some point modify HARP to help homeowners whose mortgages are not backed by Fannie Mae or Freddie Mac refinance their loans. (This is significant because while the majority of mortgage loans taken out today are owned or guaranteed by Fannie Mae or Freddie Mac, this was not the case during the lending boom from 2001-2007.) Stay tuned for more details.
HARP is scheduled to last through September 30, 2017. To find out if you are eligible for HARP, call your mortgage servicer.