What is a HARP mortgage?

A HARP (Home Affordable Refinance Program) mortgage is a mortgage loan offered through the Federal Housing Finance Agency (FHFA) of the United States. The program is designed to help borrowers with existing Freddie Mac and Fannie Mae backed loans, to lower their monthly mortgage payments and interest rates. This type of loan is specifically for borrowers who are “underwater” on their current loan, meaning they owe more than their home is worth. The HARP program was first introduced in 2009, in an effort to assist homeowners who were having difficulty refinancing their mortgages because of reduced home values. The FHFA sets certain guidelines borrowers must meet in order to qualify for a HARP loan. These qualifications include having a mortgage with a loan-to-value ratio of 80% or higher, having a loan that was backed by either Freddie Mac or Fannie Mae prior to May 31, 2009, and having a satisfactory payment history on the loan. HARP loans offer borrowers the opportunity to refinance to a longer loan term, such as an 30-year mortgage, or to take out a loan with an adjustable rate, which can help lower their monthly payments. Borrowers can also settle their current loan balance and take out a new loan, which helps them reduce their total debt and monthly expenses. Overall, the HARP loan is a great option for: those borrowers who are “underwater” on their current loan; those who are having difficulty refinancing; and those who are looking to make their monthly payments more affordable.

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What is a HARP mortgage?

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