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.

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Updated

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 105%, expanded to 125% in July 2009, but the 2011 HARP enhancement removed the LTV ceiling for fixed-rate mortgages.
  • 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:

  1. 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
  2. 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
  3. 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
  4. 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 a 105% LTV cap, expanded to 125% in July 2009. HARP 2.0 enhancements, announced October 24, 2011, removed the 125% LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac. 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 high-LTV refinance programs, but Fannie Mae's guide says its purchases of high-LTV refinance loans are paused.

What Replaced HARP?

  • Fannie Mae High LTV Refinance Option: Fannie Mae's guide says its purchases of these loans are paused. The minimum LTV for a one-unit home used as the borrower's main residence is 97.01%, with different minimums for other property types and uses. Requires at least 15 months between the note dates of the existing and new loans. No maximum LTV for fixed-rate loans. Adjustable-rate loans have a 105% 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.

Questions about HARP

Is HARP still available?

No. HARP expired on December 31, 2018. Fannie Mae's guide says its purchases of high-LTV refinance loans are paused, and having a Fannie Mae or Freddie Mac loan alone doesn't guarantee an option to refinance an underwater mortgage. 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?

Having a loan owned by Fannie Mae or Freddie Mac alone doesn't guarantee an option to refinance an underwater mortgage. Fannie Mae's guide says its purchases of loans under the High LTV Refinance Option are paused. 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.

Related terms

  • HAMP (Home Affordable Modification Program)A 2009 federal loan modification program that helped 1.8 million homeowners avoid foreclosure during the Great Recession by lowering their monthly payments. It is closed to new applications.
  • Making Home AffordableThe Treasury's 2009 umbrella housing initiative encompassing HAMP, HARP, and other programs that collectively helped 5+ million homeowners during the Great Recession.
  • RefinancingReplacing your current mortgage with a new loan to get a better rate, different term, or access equity. Generally requires a new application, appraisal, and closing costs.
  • Loan-to-Value Ratio (LTV)A mortgage balance divided by the home's appraised value, expressed as a percentage.
  • Underwater MortgageA mortgage whose balance exceeds the home’s current value.
  • FHA Streamline RefinanceA simplified FHA refinancing program requiring no appraisal and minimal documentation — available only to existing FHA borrowers who can demonstrate a net tangible benefit.
  • Fannie MaeGovernment-sponsored enterprise that buys and guarantees conventional mortgages, providing liquidity so lenders can make more home loans.
  • Freddie MacGovernment-sponsored enterprise that buys conventional mortgages from lenders, securitizes them, and guarantees payments to investors. Created in 1970 as a competitor to Fannie Mae.

Sources and method

We write with assistance from AI tools. Figures come from the data and sources named on this page.