Home Affordable Refinance Program (HARP)
What Is the Home Affordable Refinance Program?
Home Affordable Refinance Program (HARP) was a federal mortgage refinancing initiative designed to help homeowners refinance mortgages even if their homes had declined in value.
The program was introduced after the 2008 financial crisis to help borrowers who were current on their mortgage payments but owed more on their mortgage than their homes were worth.
HARP allowed eligible homeowners to refinance into lower interest rate loans even with little or no home equity.
Program Status
The Home Affordable Refinance Program ended on December 31, 2018.
It was replaced by newer refinancing options such as:
- High LTV Refinance Option (Fannie Mae)
- Enhanced Relief Refinance (Freddie Mac)
Why It Matters
HARP helped millions of homeowners reduce mortgage payments during the housing recovery period.
The program allowed borrowers to:
- Lower their interest rate
- Reduce monthly mortgage payments
- Switch from adjustable-rate mortgages to fixed-rate loans
Understanding HARP remains relevant because many homeowners still hold mortgages originally refinanced through the program.
How Home Affordable Refinance Program Works
Home Affordable Refinance Program allowed eligible homeowners with little or no equity to refinance their existing mortgage.
Example: A homeowner who owed $250,000 on a home worth $220,000 could refinance through HARP to obtain a lower interest rate and reduce monthly payments.
Borrowers had to meet eligibility criteria such as being current on their mortgage payments.
The program primarily applied to loans owned by Fannie Mae or Freddie Mac.
HARP vs Traditional Mortgage Refinance
HARP → Allowed refinancing even when home value was lower than mortgage balance
Traditional Refinance → Usually requires sufficient home equity
HARP expanded refinance eligibility during the housing crisis.
Related Terms
