The Home Affordable Refinance Program (HARP) is a federal program that can help you refinance your home with the goal of making your mortgage more stable and affordable.
When the U.S. housing bubble burst in 2006, numerous homeowners experienced a decline in the value of their homes due to home prices decreasing nationwide. Many home values dropped or almost dropped below outstanding mortgage balances — creating widespread negative equity. Many homeowners were unable to refinance their mortgages because their loan-to-value ratios were drastically higher than 80% — the percentage typically required to refinance without paying private mortgage insurance (PMI). So, if a homeowner wanted to refinance, but wasn’t already paying PMI, the added cost would negate the benefit of refinancing. Overall, this led to many underwater homes and homeowners being unable to refinance their mortgages. In 2009, the U.S. government launched the HARP program with the Federal Housing Finance Agency.
HARP can help you refinance your mortgage if you’ve had difficulty obtaining traditional refinancing due to a lack of home equity or a decline in your home’s value. It can also help if your home is underwater, meaning you owe more on your home than it’s currently worth. Overall, a HARP refinance loan may help you:
To be eligible for the HARP program, you must meet all of the following criteria: