Do You Need HARP to Refinance Your Mortgage?

Scott Sheldon

Following the economic downturn, the government launched, and then revamped, the Home Affordable Refinance Program (HARP) to help homeowners who owed more on their mortgage than their home was worth. The program is still in play to this day, though it's set to expire this December.

If you're thinking about using HARP to refinance, here's what you should know about the program.

The HARP Basics

The program will allow you to refinance as long as your loan is owned by Fannie Mae or Freddie Mac and was originated on or before May 31, 2009. The other financial requirements are very flexible: HARP is lenient on bankruptcy and previous credit challenges, and super-flexible in the loan-to-value requirement. You can qualify if the outstanding loan is more than 80% of the home's value and you're current on mortgage payments, with 12 months of good payment history. The program has helped millions of homeowners nationwide secure more affordable mortgage financing for their financial situation.

Refinancing Without HARP

Of course, the program is not without its limitations. HARP does not have any options for anyone who had a Federal Housing Administration loan or who took out a loan after May 31, 2009.

Fortunately, many homeowners today have more equity than people hoping to refinance back 2011. Owners can refinance their homes more easily thanks to the economic rebound. People are feeling optimistic about their jobs, wage growth is picking up and hiring is strong. People buy homes when they're feeling optimistic about their job, income and financial future. And that leads to an increase in home equity, allowing many mortgage holders to refinance under other traditional loan programs.

Of course, you'll need to meet those programs equity requirements to refinance. Here's a quick breakdown of what those requirements entail:

  • 3.5% equity for an FHA refinance

  • 15% equity for an FHA cash-out refinance

  • 0% equity for a Veteran Affairs' loan refinance

  • 5% equity for a conventional refinance

  • 10% equity for a conventional refinance with no private mortgage insurance

  • 25% equity for a rental property

The Bottom Line

Simply put, HARP can help people who still have Fannie Mae- or Freddie Mac-backed loans six years or older, particularly if they can't qualify for other options.

But if you are looking to refinance your home, be sure to check out all the available options for your financial situation. You should also check your credit since having a good credit score can help you qualify for a lower rate. (You can view two of your credit scores for free each month on

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