The Home Affordable Refinance Program, or HARP, was created to help many homeowners who were struggling to refinance their mortgage. During the housing crisis, millions of borrowers owed more on their mortgage than their homes were worth. This created what’s known as negative equity. In many cases, these homeowners were making on-time mortgage payments, but they couldn’t qualify for better interest rates because of the drop in their home’s value.
HARP was introduced in 2009 by the Federal Housing Finance Agency (FHFA) as part of the U.S. government’s recovery program. It aimed to help homeowners refinance into more affordable mortgages—even if they owed more than the home’s current value.
Although the HARP program officially ended in 2018, understanding how it worked is still useful today. It set the stage for other refinancing and recovery options that are still available to eligible borrowers.
The goal of the Home Affordable Refinance Program was to make it easier for responsible homeowners to refinance, even if they had little or no equity in their homes. Before HARP, many people were stuck in high-interest loans simply because their home value had dropped.
This program allowed qualifying homeowners to reduce their mortgage payments through refinancing—even when the loan-to-value ratio (LTV) was very high. In fact, there was no cap on the LTV ratio for fixed-rate HARP loans, which made it a unique option compared to traditional refinancing methods.
The HARP loan program had a few important features that helped borrowers during the housing crisis. First, it was only available to homeowners whose loans were owned or backed by Fannie Mae or Freddie Mac. These are the two government-sponsored enterprises that manage a large portion of the U.S. mortgage market.
Second, the original loan had to be originated before May 31, 2009. Borrowers also had to be current on their mortgage, with no more than one late payment in the past year and none in the past six months.
To qualify for a HARP refinance, borrowers had to meet several specific conditions:
HARP didn’t offer principal reduction or forgiveness, but it did allow homeowners to get a lower interest rate, reduce their monthly payments, and switch to a more stable fixed-rate loan. This often led to significant savings over time.
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Government Home Affordable Refinance Program (HARP)
Refinancing When You Owe More Than Your Home's Value
Fannie Mae, short for the Federal National Mortgage Association, was one of the two main mortgage holders eligible for HARP refinancing.
Fannie Mae worked with lenders to allow homeowners to refinance even when their property value had dropped. In most cases, Fannie Mae allowed unlimited LTV ratios, which meant the amount you owed on your mortgage could far exceed your home’s value—and you could still refinance.
To check if your old or existing loan is owned by Fannie Mae, you can use their official loan lookup tool: https://www.knowyouroptions.com/loanlookup
The HARP program offered a lifeline for borrowers who were current on their mortgage payments but stuck in high-interest loans. It provided a way to secure a more affordable mortgage without needing additional cash for closing costs or a new down payment.
Here’s what made HARP unique:
Even though the program is no longer active, it changed how government programs support homeowners during financial trouble. HARP led to the creation of similar efforts like the Fannie Mae High LTV Refinance Option (HIRO), which helps eligible borrowers today.
Freddie Mac (Federal Home Loan Mortgage Corporation) was the other major mortgage holder that supported HARP. Both Fannie Mae and Freddie Mac provided tools to help borrowers determine whether they were eligible for the program.
You can still check your loan with Freddie Mac here: https://www.freddiemac.com/mymortgage
Homeowners with Freddie Mac loans were eligible for many of the same benefits: refinancing at a lower interest rate, switching to a fixed-rate mortgage, and reducing their monthly payments—all without new mortgage insurance or large upfront costs.
The HARP initiative was more than just a loan product—it was a major piece of the federal government’s broader recovery program during the housing crisis. It specifically addressed the needs of borrowers who were most vulnerable: those who were underwater on their loans but still making payments.
Though the program ended in 2018, its core ideas live on in today’s recovery-focused refinance solutions. For example, the High LTV Refinance Option and the Enhanced Relief Refinance by Freddie Mac are among the options now available for homeowners in similar financial positions.
To explore current recovery solutions, visit the Consumer Financial Protection Bureau’s mortgage refinance guide.
Even if the program is over, its legacy remains important. Many current refinancing options are built on what HARP started. The program helped normalize the idea that homeowners should not be punished for economic conditions they can’t control—especially when they’re making every effort to keep up with their mortgage..
Although the HARP loan program ended in 2018, its impact still matters today. Programs that followed—like the High LTV Refinance Option from Fannie Mae and Freddie Mac’s Enhanced Relief Refinance—were inspired by HARP’s success. They help homeowners in similar situations today.
If you’re unsure whether you qualify for a refinance today, speak with a certified housing counselor. At Credit.org, our nonprofit counselors can help you understand your options and guide you through the application process.
