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What Happens After HARP Expires?

What Happens After HARP Expires?

The government-backed Home Affordable Refinance Program, created in 2009 during the housing crisis to help homeowners who were underwater on their mortgages and also known as HARP, was originally set to expire in December 2016. However, after multiple extensions, the popular program is scheduled to end on December 31, 2018, the Federal Housing Finance Agency (FHFA) announced.

According to the FHFA, “HARP continues to be one of the most successful crisis-era programs through which more than 3.4 million homeowners have refinanced their mortgages.” And, it noted in August 2017, more than 143,000 homeowners could still benefit from the program.

Those who want to take advantage should contact an eligible lender before the December 31st expiration date. But what happens after HARP expires?

New Loan Refinance Programs

When the FHFA announced the latest HARP extension in August 2017, it did so while also announcing modifications to the High LTV Streamlined Refinance Programs it announced a year earlier. (LTV, remember, means “loan-to-value” and is expressed as a ratio.) The HARP extension through the end of 2018 is meant to create a sort of bridge between these offerings, REALTOR Magazine explains.

According to the FHFA, the High LTV Streamlined Refinance Programs implemented by Fannie Mae and Freddie Mac will “provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance because their loans have LTV ratios that exceed” Freddie Mae and Fannie Mac’s limits. In order to assist those borrowers, the government said, the program “will be available for loans originated on or after” October 1, 2017.

Two Programs, Similar Concept to HARP

Fannie Mae’s HARP replacement is called the High Loan-to-Value Refinance Option, while Freddie Mac’s is called Enhanced Relief Refinance. These streamline programs don’t have an expiration date. They are similar to HARP in that they require borrowers to have an existing Fannie Mae or Freddie Mac mortgage originated on or after October 1, 2017, and also require that borrowers be current with their payments.

One key difference from the HARP program, according to HSH, the nation’s largest publisher of mortgage and consumer loan information, is that they can reuse the new refinance programs. HARP is one-time use.

Why explore your HARP options now?

One reason to explore your HARP eligibility before the program goes away is simply due to advantageous interest rates, Realtor.com notes. Even though rates have inched up in recent months, they’re still historically low for the time being.



Home Affordable Refinance Program and HARP® are registered trademarks of the Federal Housing Finance Agency (FHFA). Mr. Cooper is not associated with FHFA or any government program. Official information about the Home Affordable Refinance Program (HARP) is located at http://www.HARP.gov.

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