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If you’re not familiar with the Home Affordable Refinance Program (HARP), it’s a conventional loan option rolled out by the U.S. government in March 2009 that allows homeowners to refinance who may have run into some roadblocks due to the decreased value of their home. If your home is underwater, meaning you owe more than your home is worth (aka negative equity), you could still be eligible to refinance into a lower rate or change your term. But you have to hurry, as this program will end December 31, 2018.

We’ll go over the purpose of HARP and who’s eligible, along with some of the more common misconceptions around refinancing with a HARP loan.

The Basics

What Is HARP, and How Does It Work?

HARP is intended to help people with little to no equity or even those who owe more than their home is worth do a rate/term refinance. That means they wouldn’t deal with the usual equity requirements as long as they were refinancing to lower their rate or change their term.

The goal of the program is to give people financial flexibility through either a lower payment or a term change based on their financial goals.

Who Is Eligible for HARP?

Although HARP is designed to make certain aspects of the qualification process easier, there are certain requirements that must be met in order to move forward. Let’s run through those briefly.

  • The investor in your mortgage must be Fannie Mae or Freddie Mac. If you have a mortgage through another major investor (FHA, VA, etc.), there may be other options to provide mortgage relief.
  • You must have originated your loan prior to May 31, 2009. This refers to the date you closed on your last purchase or refinance.
  • In most cases, you can have no more than 20% existing equity in your home. There’s often no limit to the amount you have left on your mortgage balance, but in certain instances, Quicken Loans requires that you refinance no more than twice the value of your home on your mortgage. A Home Loan Expert will be able to find the best option for you.
  • In order to refinance, HARP eligibility requires that you be up to date on your payments. This means no more than one missed payment in the last year and none in the last six months before closing the loan.
  • As a general rule, you can only use HARP to refinance once. The only exemption to this is if you refinanced a Fannie Mae loan through HARP between March and May 2009.

If you’ve been turned down in the past, it’s worth checking into the program again. It’s become easier to qualify as a result of policy changes over time, and there may be less documentation needed to determine whether you’re eligible.

If you think you’re a candidate given these requirements, you can use our tool to check your eligibility.

Is a HARP Refinance Worth It for Me?

Beyond the need to qualify, the next thing you should work to determine is whether a HARP refi would be beneficial for you. In order to know this, you need to be clear on your goals as well as what you can and can’t do with HARP.

Where Using HARP Makes Sense

HARP is good if you want to lower your rate and your payment along with it. You can also use it to change your term and make it longer, lowering your monthly payment, or to shorten your term to pay off your home faster.

If you’re looking to decrease your payment by lowering your rate, you can get an idea of how much you would save on a monthly basis by comparing your current payment to a payment at today’s rates. Our amortization calculator might come in particularly handy for this purpose.

Alternatively, you can use the calculator to determine the kind of monthly payment you might be able to afford if you were to shave a few years off your current loan in order to pay off your home faster.

What Are the Disadvantages of HARP?

Obviously, no one loan program represents the perfect solution for everyone, so you might be asking yourself about potential HARP loan disadvantages. What things can HARP not do?

First, HARP is only available on conventional loans originated prior to May 31, 2009. If you have a different loan investor or your loan doesn’t match the time period, you’ll have to look at other options.

Next, you have to be current on your loan, so HARP isn’t for people who are behind on their payments and looking for a way to catch up. The best thing to do at that point would be to speak to your loan servicer about your options, including a potential loan modification. If you’re a Quicken Loans client, you can give our servicing team a call at (800) 508-0944.

Finally, you can’t use a HARP loan to convert your home equity into cash. This program is only available for rate/term refinances.

Understanding the Reality of HARP

HARP has been around for a while, and a fair number of client questions and outright misconceptions have cropped up. We’ll tackle a few of these here.

Are There Any Problems or Risks with HARP Loans?

There’s a risk associated with any mortgage loan that eventually a client might not be able to afford the mortgage payments and end up defaulting. At Quicken Loans, we aim to work with you to make sure you’re in good financial shape. We also invite you to call us if you ever have trouble in order to go over your options.

That said, HARP is no riskier than other lending programs. There’s nothing special a client should be concerned with.

Myth: HARP Will Give Me High Closing Costs

Many people are reluctant to consider HARP because they assume they’ll have high closing costs, especially if they’re refinancing into a 30-year fixed-rate loan. This makes total sense to many people: If you’re underwater on your property in the first place, the last thing you want to do is add a large chunk of brand-new closing costs to the financial deficit you already have. However, HARP doesn’t require a borrower to go into a 30-year loan, and your closing costs can be rolled into your monthly payments instead of a lump sum. So on top of refinancing when underwater, you have the chance to change up your loan agreement if you need to and avoid a lump-sum payment. You may also be able to apply funds in your existing escrow account to the closing costs on the HARP loan so that you don’t have to come up with as much out of pocket for closing. This is referred to as “netting escrows.”

If you think HARP might be right for you, don’t hesitate to look into your options. This program goes away when the calendar flips to 2019. You can get started online through Rocket Mortgage® by Quicken Loans. Feel free to give one of our Home Loan Experts a call at (800) 785-4788. If you have questions, you can leave them for us in the comments below.

This Post Has 38 Comments

  1. I would never tell anyone to go to quick and loans . They tell you that it a fixed rate, ya what a big lie. And I they say they well pay off your home just to think you own it . And they really own it you gave it to them , don’t do it . We got a loan and we are going to look some place else. Payments went from 545. To $700 a month they love to lie to get a loan dun 😞 boes

    1. Hi Cece:

      I’m going to get this to our Client Relations Team to look into what you were told as part of your loan process. I do want to clarify one thing. When you close your loan, you immediately own your house. It’s yours. The mortgage company has a lien on your house until you pay it off. But you own your house.

  2. Hello Kevin Graham,
    First let me say that I am not applying for a home loan. I have been researching information on behalf of my niece. I just want to make sure that I am giving her the right information and what programs can assist her. Kevin you have been so great at assisting those who are interested in applying for the program. You’re very professional and respectful even if the comment is a bit critical with their comments. I just want you to know that you’re doing a great job. And I will be suggesting to her about this program.

    1. Thank you, Portia! That makes my day! I hope you have a good one and that your niece gets the right mortgage deal for her.

  3. Hi ! I owned my home since 2004. My husband passed away and I called Hope and they helped me get a loan modification. My mortgage increases every year because they say that I don’t have enough money in my escrow to cover for my home insurance. I owned more on my house than what is worth. Do you think I qualify for Harp?.

  4. Hi ! I owned my home since 2004. My husband passed away and I called Hope and they helped me get a lian notification. My mortgage increases every year because they say that I don’t have enough money in my escrow to cover for my home insurance. I owned more on my house than what is worth. Do you think I qualify for Harp?.

  5. I received an e-mail with an 800 number to call from Chase (my mortgage lender) offering me a HARP refi. No closing, no appraisal and a reduction in monthly payment of $310/mo. My home is currently valued at $477k. I owe $164k on a $227k loan originated in 2011 at 5.7% fixed interest rate. Never missed a payment. I would love to lower my interest rate as my sister who co-owns the house has been out of work for several years. With all of the breaching out there, how do I verify the 800# is really from Chase, do I really qualify for a HARP and if I do how does a person determine which lender to use based on all the horror stories?

    1. Hi Phoebe:

      As far as verifying the 800 number is really from Chase, the best way to do that is to Google it.

      As to whether you qualify for HARP, you don’t. In order to qualify for HARP, your current loan has to have been originated on or before May 31, 2009.

      With that being said, you may have other refinancing options available to you. If you want to apply and go over your options online, you can do so through Rocket Mortgage. Otherwise, one of our Home Loan Experts would be happy to speak with you at (888) 980-6716. Hope this helps!

      Kevin Graham

  6. Hi just need more info. We are thinking of doing the HARP program with Wells Fargo. Our house worth $405,000 with a balance of $84,000. I have 4 years left but monthly payment is high. I have no second on the house, credit is on high 700’s, arest we qualified?

    1. Hi Div:

      You don’t qualify for HARP because you have to owe more on your home than it’s worth. However, rates are still near historical lows and you may have other options. I would ask that you talk to one of our Home Loan Experts and hear us out by filling out this form or calling 888-728-4702. We may be able to find a program that works best for you.

      We also take great pride in being our clients’ lender for life. We’ve been ranked highest in customer satisfaction for mortgage origination by J.D. Power for seven consecutive years and three straight years in the mortgage servicing category. I would urge you to give us a look.

      Kevin Graham

      1. Hey Kevin,
        Late reply sure…but really!?!?!? Did you read her actual question? She stated… . Our house worth $405,000 with a balance of $84,000. ” That does NOT mean as you mention that she owes more than than it is worth! She has a 21% LTV.

        DIV- I am sure you realized that Kevin has NO idea about the loan business. Please stay away from him and his company. They should take more pride in actually knowing how to do math and the first basic LTV calculation!

        1. Hi Steven:

          I appreciate your comment. I never meant to imply they owed more in her home then it was worth. I was explaining that that’s who the program is intended for. In order to qualify for HARP, you have to have an LTV of between 80% and 200%. Thanks for giving me the opportunity to clarify.

          Kevin Graham

  7. Hi, so we wanted to refi our current 30yr fixed loan. We had an appraisal done , came back as higher than we bought, so far so good..BUT our current bank said their internal appraisal dept. would not allow for the ‘high adjustments’ given by the appraiser and came back with an appraised value lower than our current mortgage balance. So we can’t refi…it’s underwater.

    Does HARP 2.0 help for ppl like us? what are our options?

    1. Hi Mani:

      That doesn’t sound like a common appraisal situation. There are and various requirements for HARP including that the loan has to be owned by Fannie or Freddie and closed before May 31, 2009. That said, I’m going to recommend you talk to one of our Home Loan Experts who should be able to go over all your options. You can get started online by filling out this form or call (888) 728-4702.

      Kevin Graham

    2. Hi Mani:

      That doesn’t sound like a common appraisal situation. There are and various requirements for HARP including that the loan has to be owned by Fannie or Freddie and closed before May 31, 2009. That said, I’m going to recommend you talk to one of our Home Loan Experts who should be able to go over all your options. You can get started online by filling out this form or call (888) 728-4702.

      Kevin Graham

  8. I am wondering as I have been reading up on HARP but still not sure. Can someone refinance their existing mortgage and combine the second mortgage and take money out through HARP refinance? Thank you for your time. Appreciate it greatly.

    1. Hi Kathy:

      I’m not sure about the second mortgage question. For that, I’m going to put you in touch with one of our Home Loan Experts. One thing I can tell you is that HARP is not meant for taking cash out. It’s about interest rate/mortgage term reduction. Someone will be reaching out.

      Kevin Graham

    2. I am with Kathy, I am a bit ‘leery’ about a HARP refinance. I was shafted with a refi in 2007. I have not missed a payment since 2009. I have a mortgage where my rate increases every year up to 5%, this was a modification. The reason that I was thinking of a HARP is due to maturity date of 2050! I don’t want to pay for closing costs. Will HARP help me? I would like to refinance into a 15 yr term.

      1. Hi GT:

        We can help you look into all your refinance options, HARP and otherwise. Someone will be reaching out.

        Kevin Graham

  9. We have a very high rate on our second mortgage (originated 2009) and we were able to refinance our first mortgage in 2012 at a bit lower rate. We are approx. 100% LTV, but we have never missed a pay ment on either loan. Would we qualify for a HARP loan?

    1. Hi Andrea:

      In terms of the timeline on HARP, It would depend on when in 2009 you closed on your original second mortgage. I should be upfront with you that we don’t do second mortgages, but we might be able to go over your options. If you want to combine them, that’s something we can help you with.

      Kevin Graham

  10. Hello, I’m not sure if you can help but I want know if I don’t ask and if you can;t maybe you know someone that can. My name is Armedia Simpson and in 2012 I lost my mother who owned a home in New Jersey but she passed in Charlotte NC . When I tried to take care of the house in NJ they told me that I had to have the death certificate changed. I tried to get NC to change it and they wouldn’t they said that she was a resident of NC and that they would not do it. It’s like they are saying that she couldn’t have two residents, that’s a joke. Anyway my grandson and his mother was living in the house and she was trying to do something and it didn’t go through. Now she has some lawyer trying to get me to sign some papers I told them to leave me alone and let the bank take the house, because I had asked my grandson’s mother to sell the house before my mother passed but she didn’t trying to squat in the house by just paying the basic and the taxes, and I think that is how she was able to live there from 2009 until now. It maybe to late to do anything but was there something that I could have done to keep the house. Would appreciate a response no matter what.
    Thank you
    Armedia Simpson

    1. Hi Armedia:

      This all sounds very complicated and I’m not sure what her residence has to do with it. If you had any rights to the house according to her estate, you might be able to do something about it, but I’m going to send this to someone who might be able to give you more thorough advice. Thanks for reaching out!

      Kevin Graham

  11. I have tried to get a loan modification because my second morgage is 11.9%
    Because I am not behind, no one will help me. How sad is that. It is better bot to pay your mortgage.

    1. Hi Mary:

      I’m sorry to hear that. That’s a difficult situation. If you don’t make the payments and get behind, your credit is going to take a hit. The same thing would happen if you did a loan modification. I don’t know if you might be able to refinance your second mortgage at a lower rate or take cash out of your primary mortgage to pay off the second loan and pay off the debt at a substantially lower rate on your primary. I’m going to have one of our Home Loan Experts reach out and see if we can look into your situation and offer any advice.

      Kevin Graham

  12. HARP is not a good thing. Yes I keep my home. I start at 2% and now after 7 years my payment goes to 4%. The payment will go to 6% over the next 2 years. Over 1500 a month. Then after my final payment, by the way, payments started in 2008 and end in 2036, I have to pay $72000.00 as a final payment…I know I’m going to have to sell out soon. Just can’t afford. It seems to me something is dishonest in the program or with SPS….

    1. Hi Jim:

      It doesn’t sound like you’re talking about HARP. It sounds like you’re dealing with a loan modification. I’m going to have someone reach out and look into your situation.

      Kevin Graham

  13. In 2011 I found myself drowning due to my husband’ death. That’when I applied for a Harp loan with my mortgage company,Ocwen. While I finally received the loan at a fantastic rate of 2.00 percent on a 15 year loan,I got hit with a balloon payment in 2022. Needless to say there is no possible way I can pay a $65,000 balloon payment. I was truly unaware of this payment. I didn’t know HARP allowed for this. So, come 2022 ,I will have no home and be on the streets. Can you give me any insight to my dilemma.

    1. Hello, Linda. I’m terribly sorry to hear about your situation. I’m going to have one of our amazing home loan experts reach out to you about this. They’ll shoot you an email to further discuss your situation. All the best!

  14. What about Wanda here? No answer for her. Just filled out one of your HARP come ons. Why don’t you give all the necessary information in them? Like that you have to have owned before 2009 and have to have no equity. Otherwise, the program is useless. Why do you advertise for something, acting like people like me could benefit, only to get my information and – what -sell it on the internet? So tired of misleading practices from all sides.

    1. Hello, TD,

      When commenters and clients give personal information, we message them separately, as a way of protecting their privacy. Yes, HARP has very specific qualifications, but nearly 3.3 million homeowners have refinanced their mortgages through the government program as of last November, saving them an average of $191 a month. According to the New York Times, 700,000 homeowners are still eligible.

      If you’d like to learn more about HARP, feel free to browse through our selection of Zing articles on the topic. And if you have any more questions about our practices or the products we offer, you can reach out to Emma, one of our home loan experts at Emma@quickenloans.com

  15. I missed ONE mortgage payment in my entire life: Dec, 2013.
    Ocwen, my current mortgage lender contacted me telling me about a loan modification program that they could help me with. My current interest rate is 7.99% and I was interested in reducing my interest rate. My financial stability is in serious question. My son die, my husband and I divorced and I was too broken to go back to my job at Verizon Wireless due to stress involved. All this within 8 months.
    I own an arts and crafts cafe which I purchased with a settlement from my ex husband. I thought this would provide me the income that I was missing from my job. Things have been slower than expected and my total income is from a rental agreement with my mother who leaves in an apartment in my subject property.
    I have another job, but in Dec 2013, I fell from a ladder and suffered from a concussion and again was unable to work for 3 months. When I went back to work, they cut my hours, so that my income there doesn;t even pay for the health insurance that I have from them.
    There have been many changes in my life, even since Dec, 2013 and Ocwen is dragging their feet to get this done and my situationh continues to worsen.
    Now my credit is destroyed because they told me not to pay my mortgage and now I am in foreclosure. I no longer trust or value their assistance.
    Do you think you can help. I always had excellent credit until now and I have a retirement plan that I could plunder to pay off the mortgage but I expect my business to pick up and it has so I really don’t want to go that route unless necessary.

  16. Traditionally, mortgage lenders and banks will only refinance your mortgage loan if you have at least 20 percent equity in your home. But if you owed more on their mortgage loans than what their residences were worth then you may wish to refinance your mortgage.

    1) Call several mortgage lenders to see if any would be willing to refinance your mortgage loan even though you owe more on it than what your home is worth. Ask lenders if they are participating in the federal government’s Home Affordable Refinance Program. This program provides financial incentives to lenders that agree to refinance the mortgage loans of homeowners who owe up to 25 percent more on their loans than what their homes are worth. Under the Home Affordable Refinance Program, homeowners who owe $125,000 on a home with a market value of $100,000 could qualify for a refinance. Lenders don’t have to participate in the program, though, to agree to refinance the loans of owners who are underwater.

    2) Give your lender permission to send an appraiser to your house to determine the current market value of your home. This is an important step. You already know that you owe more on your home than what it is worth. If you owe too much more, though, you might not qualify for a mortgage loan. Lenders participating in the Home Affordable Refinance Program require that you owe only 25 percent more than what your home is worth. Lenders across the country will have their own limits.

    3) Sign the closing papers that make your refinanced loan official, if you don’t owe too much more on your mortgage than what your residence is worth. You’ll also have to pay your refinancing fees at this time. You can pay them in one lump sum or roll them into your mortgage loan payments and pay them over time.

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