What Is HARP?
The Home Affordable Refinance Program (HARP) was set up by the federal government in 2009 in response to the widespread collapse in home prices that had occurred as a result of the 2007-08 credit crunch. Lower home prices saw millions of homeowners plunged into negative equity (a.k.a. having an "underwater" or "upside down" mortgage), and that stopped them from reducing their monthly outgoings by refinancing to lower mortgage rates. Since then, home prices have risen in many areas, but the recovery has been geographically patchy. And as recently as the second quarter of 2016, 3.6 million Americans still had underwater mortgages.
HARP has evolved since it was first introduced, and many of its original eligibility rules have been loosened. As its official government website suggests:
Turned down before? Now's the time to try again.
HARP has been significantly enhanced since it launched in 2009. The program now requires less documentation and has simpler guidelines, all designed to approve more loans.
To date, the program has helped more than 3.4 million homeowners. In August 2016, the Federal Housing Finance Agency (FHFA) announced it was working with Freddie Mac and Fannie Mae to develop a new streamlined refinance offering, which is due to be introduced in October 2017. In the meantime, the current version of HARP will continue to be available up until September 30, 2017. At the time it made that announcement, the FHFA reckoned around 300,000 homeowners remain eligible to refinance under HARP, but are yet to do so.
If you're one of them, the program offers some real benefits:
- Lending criteria are much less strict than with other mortgages, so you're more likely to be approved
- It doesn't matter how far underwater your existing mortgage is
- You shouldn't normally pay more in mortgage insurance than you currently do
- Refinance closing costs should be affordable because many fees and charges are capped – and you can bundle them all up within your new loan
Frequently Asked Questions›
- Qualifying for A Mortgage Refinance
How do I qualify for a mortgage refinance?
Three steps. Home Equity, and Credit Score.
Step 1: Home Equity: Property value should exceed the refinance amount
Step 2: Income: Total of refi payment plus other debts should be < 43% of gross income
Step 3: Credit: Credit score should exceed lender minimums (usually 620-660). Homeowners who don't meet these three guidelines should look for streamline programs, which are more flexible.
- Do you have refinancing options for people with less than perfect credit?
- Yes, we offer several options to help you get an auto loan with poor or bad credit.
- What is HARP and how can it help you?
HARP is the Home Affordable Refinance Program and it can allow people get some extra mileage out of lower interest rates by refinancing into a shorter mortgage.