What Was the HARP Program? A Look at Its Goals and Legacy

The Home Affordable Refinance Program (HARP) was a federal initiative active from 2009 to 2018 designed to help homeowners with little to no equity refinance their mortgages. While HARP is now closed, its legacy offers important lessons for today's borrowers. The program's primary goal was to provide financial relief by allowing eligible homeowners to secure lower interest rates or switch from risky adjustable-rate loans to stable fixed-rate mortgages, even if they were underwater (owing more on the mortgage than the home's current market value).

What Were the Main Goals of the HARP Program?

HARP was created in response to the 2008 housing crisis, which left millions of homeowners with negative equity. Its core objectives were to increase mortgage affordability and stability. The most common outcome for participants was a reduction in their monthly payment through a lower interest rate. Others used the program to eliminate mortgage insurance (an insurance policy that protects the lender if the borrower defaults on the loan) or to change their loan type. A key feature was that HARP eligibility was not based on the home's current value, making it a unique tool for underwater borrowers.

How Did Homeowners Use HARP for Financial Stability?

Beyond just lowering payments, homeowners leveraged HARP to achieve greater long-term financial security. A significant use case was converting an Adjustable-Rate Mortgage (ARM) into a fixed-rate mortgage. An ARM has an interest rate that can change over time, while a fixed-rate mortgage maintains the same rate for the entire loan term. By refinancing into a fixed-rate loan, borrowers gained predictable monthly payments, shielding them from future interest rate hikes. Alternatively, some chose to refinance into a shorter-term loan (e.g., moving from a 30-year to a 15-year term), which allowed them to build home equity (the portion of the home you truly own, calculated as the home's value minus the mortgage balance) much faster.

What Are the Alternatives to HARP Now?

Since HARP expired on December 31, 2018, homeowners seeking similar relief must look to conventional refinancing options. To qualify for a standard refinance today, you typically need sufficient equity in your home—often at least 5% to 20%. Homeowners who have built equity may find competitive rates for fixed-rate loans. For those who may not qualify for conventional loans, options like an FHA Streamline Refinance (for existing FHA loans) or evaluating loan modification programs with their current servicer are potential paths. Based on our experience assessment, consulting with a qualified mortgage lender is the most effective way to understand current program eligibility.

To summarize, while HARP is no longer available, its purpose highlights key financial strategies:

• Refinancing to a lower interest rate can free up monthly cash flow.
• Switching from an ARM to a fixed-rate mortgage provides payment predictability.
• Choosing a shorter loan term accelerates equity building. The most critical step for any homeowner today is to review your current mortgage terms and consult with a licensed professional to explore viable refinancing options based on your equity and financial goals.