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HIRO Mortgage Program 2020: Guidelines, Rates, And Eligibility

4-Minute Read
Published on September 22, 2020

The High Loan to Value Refinance Option (HIRO) is a new mortgage refinance program for homeowners with low equity in their homes. The program is administered by Fannie Mae, one of the two leading government enterprises that purchase mortgages from lenders after closing.

In 2018, HIRO and Freddie Mac Enhanced Relief Refinance (FMERR), replaced HARP as the primary government assistance plan. Both HIRO and FMERR help low-equity homeowners refinance to take advantage of current, historically low interest rates.

What Is The HIRO Program?

The HIRO program allows homeowners who meet their eligibility requirements to refinance, even if they owe more than 97% of their homes' value. In comparison, most programs require homeowners to have equity in their homes before they can refinance.

And this is important because a report from ATTOM Data Solutions showed that 3.5 million homes were seriously underwater. In 2019, one in 16 homeowners had a mortgage loan balance that is at least 25% higher than their home's market value.

When you’re underwater on your home, you owe more on the mortgage than the home is actually worth. Underwater borrowers are at higher risk of foreclosure and often have difficulty refinancing.

And unfortunately, many of these borrowers find themselves trapped in a high-interest mortgage with no option to take advantage of today’s lower rates. So these are exactly the type of borrowers who stand to benefit the most from the HIRO program.

How Does The HIRO Program Work?

Even though home prices have rebounded since the Great Recession, the recovery hasn’t been even across the U.S. In fact, many homeowners have found that the value of their homes has actually decreased.

Most lenders have maximum loan-to-value (LTV) requirements, but Fannie Mae and Freddie Mac require minimum LTV to qualify.

Minimum LTV Ratios For High LTV Refinance

The HIRO program is designed for borrowers that live in areas that haven’t seen substantial property value increases. For that reason, you won’t qualify for the program if you have too much equity in your home.

Here is a chart showing the minimum LTV ratios to qualify:


Type of Residence


LTV Required


1 unit

97.01% or higher


2 units

85.01% or higher


3 – 4 units

75.01% or higher

Second home

1 unit

90.01% or higher

Investment property

1 – 4 units

75.01% or higher

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Who Qualifies For The High LTV Refinance Option?

The HIRO mortgage program was designed to help a specific group of people, so not everyone will qualify. If you’re interested in applying, you’ll need to meet the following requirements:

  • You must have a mortgage owned by Fannie Mae or Freddie Mac. If you’re not sure who backs your loan, you can use this lookup tool offered by Fannie Mae.
  • The loan must have originated on or after Oct. 1, 2017
  • At least 15 months must have passed on the loan. For instance, if the loan originated on Oct. 1, 2017, it won’t become eligible until Jan. 1, 2019.
  • You haven’t made any payments more than 30 days late in the last 6 months of the loan.
  • You’ve only made one payment that was more than 30 days late during the previous 12 months of the loan.
  • There are no delinquencies greater than 30 days.
  • You haven’t previously taken advantage of the HARP relief program on this loan.

The Homeowner Must Benefit From The Refinance

To qualify for the HIRO program, homeowners must show that they will significantly benefit from refinancing. You can prove this is one of the following ways:

  • Your monthly principal and interest payments will be reduced
  • You’ll have a lower interest rate overall
  • Shorter amortization term
  • You’ll gain a more stable mortgage product, like trading in an adjustable rate mortgage for a fixed rate mortgage

High LTV Refinance Option FAQs

Here are some of the most commonly asked questions regarding LTV refinancing options:

Will I Need To Go Through The Application Process Again?

No, the high LTV refinance option does not require new income verification, credit check, bank statements, or debt-to-income (DTI) evaluation. The government reasons that it’s better to reward steadily paying homeowners and keep them out of foreclosure.

What Constitutes A Material Change To The Loan?

Two main situations will constitute a material change to the loan. The first is when an original borrower is no longer held responsible for the mortgage. This typically happens in the case of death or divorce.

Or if your monthly payment goes up by more than 20%, it will be considered a material change. In that case, the lender may choose to calculate a new DTI, though it’s not a legal requirement.

Will I Need Another Appraisal?

This varies, but potential applicants don’t need to worry about a low appraisal value because it will only increase your LTV, and there is no maximum LTV.

Will I Need To Purchase Mortgage Insurance?

Your current mortgage insurance will be carried over from the existing mortgage. And if your current mortgage doesn’t require mortgage insurance, none will be needed on the new loan.

What If Freddie Mac Owns My Mortgage?

When you check to see who backs your mortgage, you may find that Freddie Mac holds it. You can find this out by using Freddie Mac’s lookup tool. In this case, you can apply for FMERR. Fortunately, FMERR has the same guidelines and eligibility requirements as the HIRO program.

Summary: HIRO Helps You Lower Your Mortgage Payments

The HIRO program offers numerous benefits for borrowers who are currently underwater on their mortgage. Qualifying could help you reduce your interest rate, which means you’ll pay less money every month. It could also help you lower the principal, so you pay less over the life of the loan.

Not everyone will qualify, so you’ll want to check the program guidelines carefully. Start by verifying which lender backs your mortgage, and then check to see that you meet the other guidelines.

To learn more valuable tips for homeowners, be sure to check out our Learning Center.

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Call our Home Loans Experts at (800) 251-9080 to begin your mortgage application, or apply online to review your loan options.

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See What You Qualify For