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Refinancing your home is like pushing the reset button on your mortgage. It can get you 

better terms on your loan, such as a lower interest rate or lower monthly payments.

But not everyone qualifies for conventional refinancing, especially people who don’t have a lot of equity in their homes. 

That’s where special housing programs come in. Initially, there was the Home Affordable Refinance Program (HARP), which was created in 2009 to provide financial relief to struggling homeowners during the U.S. housing market crash. The program was discontinued in 2018, but two other programs were introduced to replace it, with some notable differences: Fannie Mae’s high loan-to-value (LTV) refinance option and Freddie Mac’s Enhanced Relief Refinance. 

We asked three experts to walk us through HARP and the two refinancing programs that replaced it — and how to determine if one of them is a good fit for your financial situation. Because with interest rates so low, now’s the time for Americans to consider refinancing their homes to save money. 

Prior to 2009, it was nearly impossible to refinance your home with little equity, as lenders wanted more security in their investments. But HARP changed that. Created by the Federal Housing Finance Agency (FHFA), HARP was introduced to help people keep their homes — specifically, homeowners whose mortgages were underwater. 

What does it mean to be underwater? “It means they owed more than what their houses were worth,” says Jacqueline Cooper, president and executive director of Financial Education Associates in Boston, Massachusetts. 

“HARP allowed them to refinance at a lower interest rate and lower equity down — sometimes negative equity down — in order to keep their home,” says Michael Foguth, president and founder of Foguth Financial Group in Brighton, Michigan.

According to FHFA, nearly 3.5 million borrowers used HARP between April 2009 and December 2018, when the program ended. To this day, some homeowners still have active loans through HARP, despite it no longer accepting applications. 

When HARP was discontinued in 2018, two programs replaced it: Fannie Mae’s high loan-to-value refinance option and Freddie Mac’s enhanced relief refinance.

Fannie Mae and Freddie Mac are government-sponsored enterprises (GSEs) that buy mortgages and resell them at more affordable rates to homebuyers. These two particular programs benefit homeowners who already have mortgages through Fannie Mae and Freddie Mac, and they’re intended for people with high loan-to-value, or LTV, ratios. What this means is that, of the home’s appraised value, the homeowner owns only a small portion of it. Lenders use LTV to determine how much of a risk it would be to lend to someone.

Pro Tip

Determine your loan-to-value ratio with this calculation: LTV = (Amount owed on the loan / Appraised home value) × 100. This will help determine if you qualify for one of the two HARP replacement programs through Fannie Mae and Freddie Mac.

“[These programs are] able to help more people to refinance, whereas before with HARP, it was just for people underwater,” Foguth says. “It’s really a lot better for the housing market.”

The two programs are designed to help people whose LTV ratios would be too high for a traditional refinance with a private lender. This means that people who are employed and have good credit are able to take advantage of low interest rates, even if their home values have declined. 

The Fannie Mae and Freddie Mac programs have virtually identical eligibility requirements and features, with slight differences in minimum LTV ratios for multi-unit homes. The main thing to know is that the GSE you got a loan from is the one you’ll need to refinance with, so you can’t use the Fannie Mae high loan-to-value refinance option with a Freddie Mac-backed loan, for example.

By refinancing through these means, you won’t have to pay for new mortgage insurance, which could bring down your monthly payment, Foguth says. You also won’t have to jump through as many as hoops as you would with a conventional refinance, as these programs have streamlined standards for documentation and verifying income, employment, and assets.

You may not get an appreciably lower interest rate through these Fannie Mae or Freddie Mac programs than what you’d get with a traditional refinance, says Seth Feinman, vice president and licensed mortgage loan originator at Silver Fin Capital in the New York metro area. With these programs, he says, you may have an easier time qualifying and benefit from the simplified documentation, but the rate may not be more competitive than other lenders.

Fannie Mae High Loan-to-Value Refinance Option

The Fannie Mae high loan-to-value refinance option is a program that’s designed to help homeowners refinance when they have little to no equity in their home. It benefits people who are up-to-date on their Fannie Mae mortgage payments — but whose LTV ratio is higher than what’s allowed in a traditional refinance. Refinancing through this option can earn you a lower interest rate on your mortgage, lower payments, and/or shorter repayment terms.

With this option, the minimum LTV ratio on a one-unit home is 97.01%, with requirements that vary depending on how many units are in the home and whether or it’s a primary or secondary home, or an investment property. For example, on a home valued at $200,000, you would be eligible for this loan if you had $5,980 or less in equity.

If you have any mortgage insurance, it would be transferred to this new loan, and you wouldn’t be required to get new mortgage insurance if you don’t already have any. The documentation standards around verifying income, employment, and assets are also less stringent than a conventional refinance. 

You can refinance your mortgage through this option as many times as you’d like, so long as you’re able to meet the eligibility requirements. This is a plus, because you could refinance only once through HARP. The downside is that if you’ve refinanced this mortgage through HARP, you’re ineligible for the Fannie Mae high loan-to-value refinance option.

Eligibility Requirements

  • You must have an existing Fannie Mae mortgage note on or after October 1, 2017. (You can look up if you have a Fannie Mae loan using this tool.)
  • You must have at least a 15-month gap between the mortgage note and the high-LTV refinance note.
  • You must be current on your payments, with no 30-day delinquencies within the past six months and no more than one 30-day delinquency (no greater than 30 days) within the past 12 months.
  • Your mortgage must not have been previously refinanced through Fannie Mae’s DU Refi Plus, Refi Plus mortgage, or HARP.

Freddie Mac Enhanced Relief Refinance

Similar to the Fannie Mae high loan-to-value refinance option, the Freddie Mac Enhanced Relief Refinance program benefits homeowners who have little equity in their home but want to refinance to more competitive rates. This program is geared toward homeowners who currently have a mortgage through Freddie Mac, are current on their payments, and aren’t eligible for a traditional refinance because their LTV ratios are too high. 

With Freddie Mac Enhanced Relief Refinance, your minimum LTV ratio on a one-unit home would have to be 97.01%. Minimum LTV ratios will differ depending on how many units are in the home and whether it’s a primary or secondary home, or an investment property. 

With this program, you aren’t required to pay for new mortgage insurance, and any existing mortgage insurance would transfer. You also don’t need to provide as much documentation around income, employment, and assets as you would if you were moving forward with a conventional refinance.

You can use this Freddie Mac program to refinance your mortgage as many times as you want, whereas with HARP, you were limited to only one time. Unfortunately, though, if you were a beneficiary of HARP, you aren’t able to refinance again through the Freddie Mac Enhanced Relief Refinance.

Eligibility Requirements

  • You must have an existing Freddie Mac mortgage note on or after November 1, 2018. (You can look up if you have a Freddie Mac loan using this tool.)
  • You must have at least a 15-month gap between the mortgage note and the high-LTV refinance note.
  • You must be current on your payments, with no 30-day delinquencies within the past six months and no more than one 30-day delinquency within the past 12 months.
  • Your mortgage must not have been previously refinanced through HARP.

How to Apply for Either Option

  1. Determine if your mortgage is a Fannie Mae loan or a Freddie Mac loan. You can use either the Fannie Mae or Freddie Mac lookup tools or by calling 800-2FANNIE or 800-FREDDIE.
  2. Find out how much your home is worth. Use a home value estimator to estimate what your home would be valued at. You can receive free estimates from Zillow, Redfin, Realtor, and other similar sites.
  3. Calculate your LTV. Both programs require a minimum LTV ratio to qualify for refinancing. You can determine your LTV ratio using this simple calculation and from there, it should be easier to see if you’re a right fit for either program.
  4. Compare rates. Shop around and compare these programs to other refinancing methods from direct lenders, loan aggregators, and mortgage brokers. Don’t pick the first decent option you find — figure out what works for you and your financial needs.



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