What happened to HARP? Looking at Other Refinance Options

 The Home Affordable Refinance Program (HARP) was a lifesaver for homeowners who were unable to refinance their mortgages due to high loan-to-value (LTV) ratios. Originally introduced in 2009 and later revised as HARP 2.0, the program enabled millions of borrowers to refinance into lower-cost loans. Although HARP mortgage expired on December 31, 2018, many homeowners are left to wonder what exists in its stead. Fortunately, replacement refinancing programs have been put into place to offer borrowers who are not eligible for a traditional refinance relief.



Why HARP Was Established and Why It Dissipated

HARP was established to assist underwater homeowners—those whose mortgages exceeded the worth of their homes. Such borrowers were not able to refinance traditionally, and HARP was therefore an important tool to lower monthly payments and achieve better loan terms.

HARP came to an end because the housing market stabilized and property values typically increased, so fewer borrowers fell into negative equity. Even though the program helped millions, those who failed to act before the program lapsed now find themselves looking for another option.

HARP Alternatives: Refinance Programs Today

Although HARP is not yet an option, there are other refinancing options that have arisen to help homeowners in this position. The two principal alternatives are:

1. High LTV Refinance Option (HIRO) – Fannie Mae

Fannie Mae created the High LTV Refinance Option (HIRO) to assist those owners who still have high loan-to-value ratios. With HIRO, the borrowers can refinance even if they have no or minimal equity in their properties, as long as their mortgage is insured by Fannie Mae and as long as they have made 12 consecutive, on-time payments.

Key Benefits:

· Fixed mortgage maximum LTV is unlimited.

· Lower interest rates and smaller monthly payments opportunity.

· Less complicated qualification than conventional refinancing.

2. Improved Relief Refinance (FMERR) – Freddie Mac 

Freddie Mac launched the Enhanced Relief Refinance (FMERR) for high-LTV ratio homebuyers who could not refinance under standard programs. FMERR, an alternative to HARP mortgage, offers a refinance solution to borrowers of Freddie Mac loans with lower rates and better mortgage terms.

Key Benefits:

· No LTV ratio for fixed-rate loans.

· Refinancing potential even with minimal or no equity.

· Lowered mortgage expenses and long-term saving.

How to Be Eligible for HIRO or FMERR

Though these programs are very helpful, borrowers have some requirements to fulfill:

· The retained loan must be owned or guaranteed by Fannie Mae (HIRO) or Freddie Mac (FMERR).

· The loan must have been originated on or after October 1, 2017 (for qualification under HIRO and FMERR).

· The borrower should have a minimum of 12 months of on-time payment history.

Final Words

Although HARP is no longer in effect, homeowners can still look into refinancing with HIRO and FMERR. These are still options that bring relief to homeowners with high LTVs who are unable to refinance traditionally. If HARP mortgage left you in the dust, today is the day to explore these options and find out if you can get a better mortgage bargain.

Location: Santa Ana, CA, USA

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