HARP Replacement Programs and Other Loan Assistance Options
HARP was a federal program (2009–2018) that helped homeowners with underwater mortgage refinance to lower rates and better terms. Currently, you can still explore other loan assistance programs for refinancing options.
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By Zachary Romeo, CBCA
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Zachary Romeo, CBCA
Head of Loans and Banking at MoneyGeek
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production. Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
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Reviewed by Ramsey Coulter
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Credit & Mortgage Expert
Ramsey Coulter has worked in the mortgage and credit industry for over 10 years. Currently a mortgage loan originator with CMG Home Loans, he specializes in helping first-time homebuyers navigate the mortgage process. Coulter is also a certified credit counselor at [Coulter Credit LLC](https://coultercredit.com/credit-repair-services/) and has been retained as an expert witness in numerous legal cases concerning credit and mortgage-related matters. His responsibilities as an expert include preparing detailed reports, participating in depositions and crafting rebuttal reports to counter opposing expert witness testimonies. Coulter holds a bachelor of science degree from West Chester University of Pennsylvania.
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Edited by Megan Hull
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Web Content Editor
Megan Hull is committed to creating quality content that fills in knowledge gaps and improves people’s lives. Previously, she worked at one of the nation’s largest behavioral health care providers and has written content for medical practices across the country. She went to school at the University of Central Florida, where she studied English with a focus in technical communications and literature. Megan geeks out on psychology, cooking and secondhand finds.
ZC
By Zachary Romeo, CBCA
ZC
Zachary Romeo, CBCA
Head of Loans and Banking at MoneyGeek
Zachary Romeo is a certified Commercial Banking and Credit Analyst (CBCA), and the Head of Loans and Banking at MoneyGeek. Previously, he led production teams for some of the largest online informational resources in higher education, with over 13 years of experience in editorial production. Romeo has a bachelor's degree in biological engineering from Cornell University. He geeks out on minimizing personal debt and helping others do the same through people-first content.
RC
Reviewed by Ramsey Coulter
RC
Credit & Mortgage Expert
Ramsey Coulter has worked in the mortgage and credit industry for over 10 years. Currently a mortgage loan originator with CMG Home Loans, he specializes in helping first-time homebuyers navigate the mortgage process. Coulter is also a certified credit counselor at [Coulter Credit LLC](https://coultercredit.com/credit-repair-services/) and has been retained as an expert witness in numerous legal cases concerning credit and mortgage-related matters. His responsibilities as an expert include preparing detailed reports, participating in depositions and crafting rebuttal reports to counter opposing expert witness testimonies. Coulter holds a bachelor of science degree from West Chester University of Pennsylvania.
MH
Edited by Megan Hull
MH
Web Content Editor
Megan Hull is committed to creating quality content that fills in knowledge gaps and improves people’s lives. Previously, she worked at one of the nation’s largest behavioral health care providers and has written content for medical practices across the country. She went to school at the University of Central Florida, where she studied English with a focus in technical communications and literature. Megan geeks out on psychology, cooking and secondhand finds.
Updated: September 6, 2024
Advertising & Editorial Disclosure
The Home Affordable Refinance Program (HARP) provided a lifeline for homeowners struggling with underwater mortgages by offering refinancing options despite high loan-to-value ratios. Although HARP officially ended in 2018, homeowners still have various loan assistance options to secure better mortgage terms.
HARP replacement programs, like Fannie Mae's High Loan-to-Value Refinance Option (HIRO) and Freddie Mac's Enhanced Relief Refinance Mortgage (FMERR), continued HARP's mission by helping eligible borrowers refinance their loans. We'll explore these programs and other refinancing options and provide a comprehensive guide to available resources.
HARP was a federal program that ran from 2009 to 2018. It helped homeowners with underwater mortgage refinance to lower rates and better terms.
Replacement programs include HIRO and FMERR, both of which are aimed at refinancing high loan-to-value mortgages, though both are currently on pause.
Other loan assistance options for eligible homeowners include FHA streamline refinance, VA interest rate reduction refinance loans (IRRRL) and USDA streamlined assist refinance loans.
The Home Affordable Refinance Program (HARP) was launched in 2009 in response to the housing crisis. It aimed to provide mortgage loan assistance to homeowners with underwater mortgages. It allowed those who owed more on their homes than their current market value to refinance their loans at lower interest rates.
To be eligible for HARP, homeowners needed a mortgage owned by Fannie Mae or Freddie Mac, originated before May 31, 2009. They also had to be current on their mortgage payments, with no late payments in the last six months and no more than one late payment in the past year. Additionally, the loan-to-value ratio had to be greater than 80%, and loan payments had to be fully up to date when applying.
HARP offered several benefits to qualified homeowners, such as:
The program was set to expire on September 30 but was extended until the end of 2018. HARP officially ended on December 31, 2018.
HOW DO YOU KNOW IF YOUR MORTGAGE IS UNDERWATER?An underwater mortgage means you owe more on your home than its current market value. To calculate if your mortgage is underwater, compare your outstanding loan balance to your home's appraised value.
For example, if your mortgage balance is $250,000 and your home is worth $200,000, your loan-to-value (LTV) ratio is 125%. Since the LTV exceeds 100%, you have an underwater mortgage.
When HARP was no longer available, homeowners with upside-down mortgages still found relief through replacement assistance programs, like Fannie Mae's High Loan-to-Value Refinance Option and Freddie Mac's Enhanced Relief Refinance. These programs offered solutions for refinancing mortgages and improving loan terms.
Fannie Mae’s High Loan-to-Value Refinance Option (HIRO) offered refinancing opportunities to homeowners with existing Fannie Mae mortgages who are current on their payments but have a high loan-to-value ratio above the limit for standard limited cash-out refinances.
The HIRO program included several beneficial features. It allowed the transfer of mortgage insurance to the new loan and required simplified documentation for employment, income and assets. Both Desktop Underwriter® (DU®) and manual underwriting options were available, making the process more accessible.
To qualify, borrowers must have gained a tangible benefit from the refinance, similar to what HARP offered. However, Fannie Mae has temporarily paused the HIRO program due to low application volume and changes in the revised Qualified Mortgage Rule.
The Freddie Mac Enhanced Relief Refinance Mortgage (FMERR) was designed for homeowners with Freddie Mac mortgages who make on-time payments but cannot refinance through standard options due to high loan-to-value ratios.
FMERR catered to those whose property values had declined, offering greater flexibility in refinancing options. The maximum LTV ratio for adjustable-rate mortgages is 105%, while fixed-rate mortgages have no maximum loan-to-value ratio. Eligible products included conventional fixed-rate and adjustable-rate mortgages with application dates on or after November 1, 2018.
The program was available for all occupancy types, with specific minimum LTV ratios depending on the property type. For instance, a primary residence with one unit required an LTV of at least 97.01%. The mortgage must have been seasoned for at least 15 months, and the borrower must have had a solid payment history.
Due to extremely low volume and the impact of the revised Qualified Mortgage Rule, Freddie Mac has paused its purchase of Enhanced Relief Refinance Mortgages until further notice.
While HARP and its replacement programs are currently not available, homeowners still have various refinancing options to explore. These alternative loan assistance programs can help if you're struggling to manage your mortgage. Below is a table of different loan assistance options that might suit your needs.
