What Is HARP (Home Affordable Refinance Program)?
The Home Affordable Refinance Program (HARP) was a federal refinancing program created in 2009 that allowed homeowners with Fannie Mae or Freddie Mac loans to refinance at lower interest rates even if their homes were underwater — meaning they owed more than the property was worth. HARP helped approximately 3.5 million borrowers refinance before expiring on December 31, 2018.
Key Facts
- HARP refinanced approximately 3.5 million loans between 2009 and 2018 — more successful than HAMP in raw numbers, largely because it served borrowers who were current on payments but trapped by negative equity
- The original HARP capped loan-to-value at 125%, but HARP 2.0 (launched 2012) removed the LTV ceiling entirely, allowing borrowers who were deeply underwater (some at 200%+ LTV) to refinance at prevailing market rates
- Only loans owned or guaranteed by Fannie Mae or Freddie Mac originated on or before May 31, 2009 were eligible — excluding FHA, VA, USDA, and private-label mortgages, which together represented about 40% of the mortgage market
- The average HARP borrower reduced their interest rate by approximately 1.75 percentage points and saved about $200/month — totaling roughly $8.4 billion in annual aggregate savings for participating households
- After HARP expired, Fannie Mae's High LTV Refinance Option and Freddie Mac's Enhanced Relief Refinance replaced it with similar high-LTV refinancing capability, though with more restrictive eligibility requirements
How Did HARP Work?
Traditional refinancing requires the new loan to be no more than 80% of the home's current value (or to carry mortgage insurance). During the housing crisis, millions of homeowners who were current on their mortgages couldn't refinance because their property values had fallen below their loan balances. HARP created an exception to this LTV requirement for GSE-backed loans:
- Eligibility check: Borrower confirmed their loan was owned by Fannie Mae or Freddie Mac (via the GSE loan lookup tools), originated on or before May 31, 2009, and had not previously been HARP-refinanced
- Current payment status: The borrower needed to be current on their mortgage — no more than one 30-day late payment in the past 12 months and none in the past 6 months
- Appraisal waiver: HARP 2.0 often waived the appraisal requirement, using Fannie Mae's and Freddie Mac's own automated valuation models instead — reducing costs and speeding the process
- Same servicer benefit: Borrowers refinancing with their existing servicer faced reduced documentation requirements and streamlined underwriting
What Was HARP 2.0?
The original HARP had limited uptake because of its 125% LTV cap and administrative complexity. HARP 2.0, launched in March 2012, removed the LTV ceiling entirely, eliminated certain risk-based fees for borrowers shortening their loan terms, waived many appraisal requirements, and created automated underwriting exceptions. This dramatically expanded the eligible population and simplified the process. The majority of HARP refinances occurred after the 2.0 relaunch.
Why Did HARP Expire?
By 2018, home prices had recovered sufficiently in most markets that negative equity was no longer a widespread problem. The number of HARP-eligible borrowers declined from millions to thousands. FHFA (the GSE regulator) allowed the program to expire and replaced it with standing high-LTV refinance programs that are available on an ongoing basis rather than as crisis-era interventions.
What Replaced HARP?
- Fannie Mae High LTV Refinance Option: Available for existing Fannie Mae loans with LTV above 97.01%. Requires 15 months of on-time payments. No maximum LTV.
- Freddie Mac Enhanced Relief Refinance: Similar program for Freddie Mac loans. Requires seasoning of at least 15 months since the note date of the existing mortgage.
- FHA Streamline Refinance: For FHA borrowers — does not require an appraisal and has minimal documentation requirements, but is only available to existing FHA borrowers.
Frequently Asked Questions
Is HARP still available?
No. HARP expired on December 31, 2018. Homeowners with high-LTV Fannie Mae or Freddie Mac loans can pursue the High LTV Refinance Option or Enhanced Relief Refinance instead. FHA borrowers can use FHA Streamline Refinance. Contact your servicer or a HUD-approved housing counselor for current options.
How many people used HARP?
Approximately 3.5 million homeowners refinanced through HARP between 2009 and 2018. The program was more successful than its companion program HAMP (1.8 million loan modifications), partly because HARP served current borrowers who were easier to process.
What was the difference between HARP and HAMP?
HARP was a refinancing program for current (not delinquent) borrowers who were underwater. HAMP was a loan modification program for delinquent borrowers at risk of foreclosure. HARP reduced the interest rate through a new loan; HAMP modified the existing loan's terms.
Can I still refinance if I'm underwater on my mortgage?
Yes, if your loan is owned by Fannie Mae or Freddie Mac. Fannie's High LTV Refinance Option and Freddie's Enhanced Relief Refinance allow refinancing above 97% LTV. Contact your servicer to determine your loan's investor and explore eligibility.
Why wasn't HARP available for FHA loans?
HARP was limited to Fannie Mae and Freddie Mac loans. FHA borrowers had the FHA Streamline Refinance as their equivalent — it allows refinancing without an appraisal and with minimal documentation, but the existing and new loan must both be FHA.