Home Affordable Refinance Program Explained & 2023 Refinance Programs
What is a home affordable refinance mortgage?
A HARP mortgage, also known as a Home Affordable Refinancing Program, was a flexible home loan type that allows homeowners, who were underwater or near underwater in their loan, to refinance their mortgage to avoid a default if they struggled to make payments.
HARP was created in 2009 by the Federal Housing Finance Agency (FHFA) and was available to homeowners who had mortgages owned or guaranteed by Fannie Mae or Freddie Mac—the program had no minimum credit score or maximum loan-to-value ratio requirements. This made it easier for homeowners who were underwater on their mortgages to refinance to better terms, even if they had poor credit or a high LTV (loan-to-value) ratio.
Unfortunately, the Home Affordable Refinance Program expired on December 31, 2018.
What other refinancing options are available?
While the HARP refinance is not available anymore, there are other government-backed programs that can help homeowners refinance their mortgages, such as the Federal Housing Administration’s (FHA) streamline refinance program, and Veterans Affairs Interest Rate Reduction Refinance Loan (VA IRRRL) program, in addition to standard refinance programs.
Why should I refinance?
There are several reasons to refinance your mortgage! Here are a few possibilities:
- Reduce your monthly payment: You can lower your monthly payment by refinancing to a lower interest rate, removing PMI, or extending the length of your loan.
- Lower your interest rate: If interest rates in Michigan have dropped since you first got your mortgage, refinancing to a lower rate could save you money.
- Change your loan type or program: If you have an adjustable rate mortgage (ARM), you may want to consider refinancing to a fixed-rate mortgage to lock in a steady interest rate.
- Remove PMI (private mortgage insurance): Some home loan programs (like FHA loans) require the borrower to pay mortgage insurance over the lifetime of the loan. Removing PMI could save you a significant amount of money long-term!
- Shorten the length of your loan: Refinancing to a shorter loan term can help you pay off your mortgage faster and save on interest over the life of the loan.
- Pay down other debts: Use your home’s value to pay off credit cards, car loans, and more. This is advantageous when your home loan’s interest rate is lower than the others.
- Use home equity for larger expenses: Use your home’s value to pay for things like college tuition, remodels, additional real estate investments, etc.
Whatever your reason, it’s always a matter of crunching the numbers with your Loan Officer to see what financially makes sense for you. There are no one-size fits all options for home loan modification programs!
Frequently Asked Questions
What can I do to refinance my home today?
To get started with a refinance, you’ll need to contact a refinance lender in Michigan! They’ll be able to walk you through the guidelines and requirement, and help you find a refinance option that works for you.
Before you get started, you’ll want to make sure your credit profile is healthy, while also collecting relevant documents pertaining to your current home loan, income (pay stubs, tax returns, etc.), and personal IDs. Those will be extremely helpful in your first meetings with a Michigan Loan Officer.
Whatever you’d like to do, getting in touch with a Loan Officer is always your first step!
Who is eligible for home affordable refinance program (HARP)?
While HARP refinances are no longer available, there are other refinance programs available for use by many home owners in Michigan.
Eligibility for refinances generally follow the requirements for standard loan programs, like Conventional Loans or FHA loans. For more specific eligibility requirements, talk to a Loan Officer!
What is the HARP mortgage program?
The Home Affordable Refinance Program (HARP) was a program offered by the Federal Housing Finance Agency to homeowners who own homes that are worth less than the outstanding balance on the loan. The program has since ended (you can see current refinance options here), but it was intended to provide relief after the financial crisis of 2008.
Are HARP loans still available in Michigan?
Unfortunately, HARP loans have been discontinued for homeowners in Michigan, but additional refinance programs exist! You can learn more about refinances or contact a loan officer for personalized (and free!) information.