Avoid Foreclosure: Refinance Under the Home Affordable Refinance Program (HARP)

If you're struggling to make your mortgage payments and worried you might eventually go into foreclosure, you might be able to get a loan you can afford by refinancing through HARP.

The Home Affordable Refinance Program (HARP) is part of the Making Home Affordable (MHA) initiative that the federal government began in 2009. While most of the programs under MHAincluding the Home Affordable Modification Program (HAMP)have expired, HARP is still going strong as of 2017.

What's HARP?

HARP is the mortgage refinance option under the MHA initiative. With HARP, you might be able to:

  • get a lower interest rate on your mortgage loan
  • get a shorter loan term, and/or
  • change from an adjustable to fixed-rate mortgage.

HARP’s History: Helping Certain Homeowners Refinance

During the financial crisis, the government came up with HARP to help "underwater" homeowners—those homeowners who were unable get traditional refinancing because the value of their home had declined. While HARP was supposed to significantly decrease mortgage default rates and stabilize home prices, after two years it was clear that the program was falling far short of expectations. Of the four million to five million homeowners that the program was intended to help, only 900,000 borrowers successfully refinanced through the program.

So, the federal government announced changes to HARP in November 2011, which included loosening the program’s eligibility criteria, waiving property appraisal requirements, eliminating certain fees, and removing a loan-to-value (LTV) ceiling. Now, thanks to those changes to the program, many more homeowners are eligible for HARP.

Current HARP Eligibility Requirements

To be eligible for a HARP refinance, you, your loan, and your property must meet the following criteria:

  • You must be current on your mortgage, with no 30-day (or longer) late payments in the last six months and no more than one late payment in the past 12 months.
  • The home must be your primary residence, a one-unit second home, or a one- to four-unit investment property.
  • Your loan must have originated on or before May 31, 2009.
  • Your current LTV ratio must be greater than 80%. (Find out your LTV ratio here.)
  • Fannie Mae or Freddie Mac must own your loan.

What Are Fannie Mae and Freddie Mac?

The Federal National Mortgage Association, known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, known as Freddie Mac, are government-sponsored enterprises that own or back many mortgages in the United States. Even if you took out your mortgage loan from a bank, credit union, or mortgage company, it might be owned by Fannie Mae or Freddie Mac. To find out if either Fannie Mae or Freddie Mac owns your loan, use the Fannie Mae and Freddie Mac online loan lookup tools. (Learn more about Fannie Mae and Freddie Mac in Who—or What—Is Fannie Mae? and Who—or What—Is Freddie Mac?)

When HARP Will Expire

HARP is scheduled to end on December 31, 2018. Though, after this date, it's expected that Fannie Mae and Freddie Mac will implement a new refinance program for borrowers with high LTV ratios to replace HARP.

Getting Help

To get a general idea about how many HARP-eligible homeowners live in your area, go to www.harp.gov and click on “Are You Eligible?” and then “View Eligibility Map.” You can also find a lot of information about HARP on this website. To find out if you are personally eligible to refinance under HARP, call your mortgage servicer (the company you make your loan payments to).

If you need help applying for HARP or want more information about different ways to make your payments more affordable, like with a mortgage modification, consider talking to a foreclosure attorney or a HUD-approved housing counselor.

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