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Home Affordable Refinance Program (HARP)


The Home Affordable Refinance Program (HARP) is a U.S. federal program set up in 2009 to assist homeowners who are underwater or near-underwater on their mortgages to refinance into a fixed-loan with lower monthly payments. This program allows homeowners with little or no equity in their homes to refinance their mortgages and take advantage of lower interest rates. The goal of HARP is to help stabilize the housing market and provide relief for struggling homeowners.


The phonetic spelling of “Home Affordable Refinance Program (HARP)” is:Home: /hoʊm/Affordable: /əˈfɔːrdəbəl/Refinance: /ˌriːˈfaɪnæns/Program: /ˈproʊɡræm/HARP: /hɑːrp/

Key Takeaways

  1. Loan Refinance: The Home Affordable Refinance Program (HARP) was a federal initiative that primarily aimed to assist homeowners who owed more money on their mortgage than their property was worth, or with little equity, to refinance their Homes. This could potentially lower their interest rates, shorten their loan term, or switch to a safer and stable loan, like changing from an adjustable-rate mortgage to a fixed-rate one.
  2. Eligibility Requirements: To qualify for HARP, homeowners needed to meet certain criteria. This included having a loan owned or guaranteed by Freddie Mac or Fannie Mae, having a loan-to-value ratio of greater than 80%, being up-to-date with their mortgage payments, and the home being a primary residence, a 1-unit second home, or a 1-to-4 unit investment property.
  3. Program Duration: HARP was launched in 2009 as part of the Federal Housing Finance Agency’s response to the housing market crisis. It ended on December 31, 2018, after extending several times to assist more homeowners. Its successor, the High LTV Refinance Option, serves a similar purpose.


The Home Affordable Refinance Program (HARP) is important because it was a federal program initiated to help homeowners, especially those with little or no equity in their homes, to refinance their mortgages. Launched after the 2008 financial crisis, HARP helped homeowners whose homes had depreciated in value and who were not eligible for traditional refinancing. By allowing borrowers to refinance at lower interest rates, HARP aimed to decrease the likelihood of defaults, thereby mitigating the impact of the housing crisis. It allowed homeowners to secure better loan terms, reduce their monthly payments, and improve their financial stability, playing a crucial role in the recovery of the housing market.


The Home Affordable Refinance Program (HARP) was established in 2009 by the Federal Housing Finance Agency in response to the housing bubble burst of 2008. The purpose was to assist homeowners who were underwater on their mortgages, meaning they owed more than what the house appraised at. These homeowners did not qualify for traditional refinancing due to the decreased value of their homes and put them at risk of defaulting on their mortgage payments or entering foreclosure.HARP was designed to help these homeowners refinance their mortgages and obtain lower interest rates, ultimately making their mortgages more affordable. It allowed refinancing into fixed-rate mortgages, protecting homeowners from future increases in interest rates and potentially decreasing their overall mortgage payments. The program helped many homeowners to stabilize their financial situation, stay in their homes, and avoid damaging consequences like foreclosure. However, it’s important to note that HARP officially ended in December 2018 and has been replaced by Fannie Mae’s High Loan-to-Value Refinance Option and Freddie Mac’s Enhanced Relief Refinance, which continue to offer similar assistance.


1. John and Sarah Example: John and Sarah were struggling to meet their monthly mortgage repayments after John was laid off from his job. With the value of their house dropping due to a decline in the housing market, they were left with a mortgage higher than their property’s worth. They applied for the Home Affordable Refinance Program (HARP) and were able to refinance their mortgage to a lower monthly payment, helping them to stay in their house and avoid foreclosure.2. Lisa Example: Lisa was a single mother with a steady job, but faced financial difficulties because of high-interest rates on her current mortgage. Realizing that her current property’s value was lower than her total mortgage debt, she applied for HARP. Through HARP, she was able to refinance to a new loan with a lower interest rate, improving her affordability and ensuring significantly lower monthly mortgage payments.3. The Smiths Example: The Smith family noticed that their savings were gradually decreasing due to the high-interest rate on their home mortgage. The property value had also declined, leaving them with a mortgage balance higher than the value of their house. This situation led them to consider the HARP program as it is specifically designed to help homeowners in such underwater situations. After applying and getting approved for HARP, the Smiths were able to refinance their existing mortgage into a new mortgage with a lower interest rate, keeping their finances secure and manageable.

Frequently Asked Questions(FAQ)

What is the Home Affordable Refinance Program (HARP)?

The Home Affordable Refinance Program (HARP) is a mortgage relief program initiated by the U.S. Federal Government in the aftermath of the 2008 financial crisis to aid homeowners with little or no equity to refinance into a more affordable and stable mortgage.

Who is eligible for the Home Affordable Refinance Program?

To be eligible for HARP, homeowners must be current on their mortgage payments, the loan must be owned by Freddie Mac or Fannie Mae, and the loan-to-value ratio on the mortgage needs to be greater than 80%.

Can anyone participate in the HARP program?

No, not everyone can participate. Homeowners have to meet certain criteria including having a loan originated on or prior to May 31, 2009, and having no late payments in the past six months with no more than one late payment in the past 12 months.

When did the HARP program end?

HARP officially ended on December 31, 2018 but was replaced by the High Loan-to-Value Refinance Option by Fannie Mae and the Enhanced Relief Refinance by Freddie Mac.

How many types of HARP loans are there?

There are broadly two types of HARP loans – HARP 2.0 and HARP 3.0. HARP 2.0 was introduced as an improvement to the original HARP program, while HARP 3.0, though proposed has not been approved or implemented.

How can I apply for a HARP loan?

To apply for a HARP loan, you must first check your eligibility and then contact your existing lender or any other mortgage lender that participates in the HARP program. Necessary documentation including taxation records, income proof, and credit history will need to be provided.

How can HARP benefit homeowners?

HARP can help homeowners by lowering their monthly mortgage payments, making their mortgage more stable and predictable, reducing their interest rate, and possibly removing the requirement for mortgage insurance.

If my mortgage has been refinanced once, am I still eligible?

Yes, as long as your loan meets other HARP eligibility requirements, mortgages that have been previously refinanced can still be eligible.

Related Finance Terms

  • Mortgage Underwater
  • Refinance
  • Federal Housing Finance Agency (FHFA)
  • Fannie Mae and Freddie Mac
  • Loan-To-Value ratio (LTV)

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