HARP substitute packages for 2021: FMERR and HIRO

HARP replacement programs for underwater homeowners

Federal housing finance
The agency (FHFA) ended its Home Affordable Refinance Program (HARP) on
December 31, 2018.

HARP was founded in 2009 as
Way for homeowners who were up to date on their existing mortgage loans, but had them
little or no equity to benefit from low mortgage rates.

After HARP expired, many homeowners still had too little equity to refi. That's why Fannie Mae and Freddie Mac created new programs to help borrowers underwater.

These HARP replacement programs will help borrowers with high LTVs continue to refinance at low interest rates today.

Check your eligibility for HARP replacement programs (April 1, 2021).

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HARP replacement programs from Fannie Mae and Freddie Mac

Replaced two new loan programs
HARP when it's expired. You are the Fannie Mae “High LTV
Refinancing Option ”(HIRO) and the“ Freddie Mac Enhanced Relief Refinance ”(FMERR).

With this HARP
Replacement programs is possible for many homeowners with little or no equity
to refinance at a lower interest rate.

That also means if the value of your home
has fallen and you're upside down (in negative equity), you could take
Take advantage of today's low rates.

Homeowners don't need at least 3%
Equity to qualify for conventional refinancing. HIRO and FMERR were designed to
help homeowners who have less than 3% equity.

In other words, if your mortgage lending value
If the rate (LTV) is 97.01% or higher, you can qualify for relief refinancing.

Check your eligibility for HARP replacement programs (April 1, 2021).

Benefits of the Relief Funding Program

These programs are designed to help
Homeowners who currently pay above market mortgage rates but cannot
Refinancing because you have too little home equity.

The biggest advantage is qualifying
Borrowers can refinance into a lower interest rate and lower monthly payment, which helps
You pay housing costs and avoid foreclosures.

But there are other advantages
also with HIRO or FMERR. For example:

No maximum LTV ratio – If the home loan being refinanced is a fixed rate mortgage, there is no maximum LTV on the new loan. That said, if your mortgage is $ 150,000 and your home is only worth $ 130,000, you can refinance even though your mortgage lending value is 115% Private Mortgage Insurance (PMI) not required – If you have PMI on your existing loan, it will need to be carried over to the new loan. If you don't currently have a PMI, don't pay it on the new mortgageOptimized application process – Simplified documentation requirements mean you may not need to provide any information about income, assets or liabilities. There is also no minimum credit score or maximum debt ratioNo need to use your current lender – Both electronic and manual subscription options are available to the same or a new servicer (meaning you can get the best interest rate on your high LTV mortgage).

These loans eliminate many of the eligibility requirements for a conventional refi. They are often a faster, cheaper way for borrowers to get a lower interest rate and lower housing benefit payment.

FMERR (Freddie Macs HARP

To qualify for FMERR – the Freddie Mac Enhanced Relief Refinance Program – your current mortgage must be owned by Freddie Mac. (You can check your status using Freddie's loan search tool.)

This loan is aimed at homeowners with a high credit-value ratio. That means you must be above Freddie's minimum LTV threshold, which is 97.01% for a one-unit primary residence. A full list of FMERR LTV requirements by property type can be found here.

In addition, the FMERR rules state:

Your current loan must have been taken out on or after November 1st.
2018 At least 15 months must have passed since your current loan was
You must have
NO late payments in the last 6 months and no more than one in the last year

The FMERR program is open to
Homeowners with second homes and investment properties as well
Condominiums. And you can use it to refinance a one, two, home.
three or four units.

There is no maximum LTV for a fixed rate
Mortgages. However, if your current loan is an ARM, the maximum LTV for FMERR is

Check your eligibility for the FMERR program (April 1, 2021).

HIRO Eligibility (HARP replacement for Fannie Mae)

To be eligible for the Fannie Mae High LTV Refinance Option (HIRO), your mortgage must be owned by Fannie Mae. (Use Fannie Mae's loan search tool to see if the agency owns your loan.)

Besides that, fannies
The requirements for HIRO are very similar to Freddie's requirements for FMERR.

Your current loan must have been taken out on or after October 1st.
2017 At least 15 months must have passed since your current loan was
You must have
NO late payments in the last 6 months and no more than one in the last year

Fannie Mae also requires a minimum LTV rate of 97.01% for a owner-occupied family home.

The high LTV refinancing option is however
slightly milder than FMERR when it comes to properties with 2 to 4 units. You can
You must have a minimum LTV of only 75.01% to qualify.

Check your eligibility for the HIRO program (April 1, 2021)

You need a "material net benefit"

Both HARP replacement programs
need a "material net benefit" to qualify. That means you are only eligible if
Refinancing will clearly improve your financial situation.

The new mortgage has to be offered at
at least one of these advantages:

Lower mortgage rateLower monthly principal and interest paymentShorter loan termReplace a variable rate mortgage with a fixed rate mortgage

When today's mortgage rates are up
There is a good chance that you will meet
the net benefit in kind requirement.

Refinancing with a high LTV Assessments

If your loan application can be
electronically drawn (as in most cases), you may be eligible for one
Assessment waiver. This means that you don't have to pay for a home valuation
Your refinancing. Assessments typically cost $ 400 or more.

Per Fannie Mae: “For certain loans
For case files, DU * offers an assessment waiver – an option to deliver the loan
to Fannie Mae with no rating. Otherwise an evaluation with an interior
and external inspection is required. If a review is received, it has to be
is used for the assessment, even if DU offers a waiver. "

That is, if you can get one
Assessment during your refinance, 1) you have to pay for it and 2) the
The lender must use the estimated value as part of your application. In order to
Don't let anyone order a review unless you are sure you have Not
receive a waiver.

* DU refers to Desktop Underwriter, Fannie Mae's automated underwriting software.

What about mortgage insurance?

Both Freddie Mac and Fannie
Mae's HARP replacement programs state if you already have a personal mortgage
Insurance must be transferred to the new loan at the same coverage rate. But if you
Don't pay a PMI right now, you don't need it for your PMI
new mortgage.

When you have a mortgage paid by the lender
Insurance (LPMI), your insurance coverage can also be transferred.

Guidelines for a National
The mortgage insurer (Genworth) says it will continue to insure mortgages.
including high LTV refinancing that meets Fannie Mae guidelines. It seems so
that mortgage insurers do not stand in the way of your refinancing

Check your eligibility for HARP replacement programs (April 1, 2021).

Frequently asked questions about the HARP replacement program

Who Qualifies for a HARP Replacement Program?

HARP replacement programs are available for homeowners with conventional mortgages who do not have enough home equity to refinance. To qualify, you typically need a credit-to-worth ratio of over 97% (meaning you have less than 3% equity in the home). You also need a timely payment history for the past year. It must have been at least 15 months since you bought or refinanced your home.

What is the current HARP replacement program?

FMERR is the HARP replacement for borrowers with Freddie Mac Loans. This stands for "Freddie Mac Enhanced Relief Refinance". HIRO, which stands for High LTV Refinance Option, is the HARP replacement program for borrowers with Fannie Mae loans. Homeowners with FHA, VA, and USDA loans should look into Streamline refinance options, including the VA IRRRL for VA mortgages.

Is the HARP replacement program legitimate?

Yes, the HARP replacement programs FMERR and HIRO are run by legitimate mortgage agencies regulated by the Federal Housing Finance Agency. These programs are available from mortgage lenders nationwide.

When did the HARP program end?

HARP, the Home Affordable Refinance Program, ended on December 31, 2018.

Can I refinance my HARP loan?

If you have used the HARP refinance program in the past, then as per Fannie and Freddie's guidelines you are not eligible to use the HIRO or FMERR program.

Has Congress Passed a Homeowner Aid Program?

Congress passed various aid programs for homeowners during the COVID pandemic. However, these measures only offer temporary payment relief. The HARP replacement programs FMERR and HIRO offer underwater homeowners permanent payment relief.

What is the minimum score for HARP replacement programs?

Neither Fannie Mae nor Freddie Mac's programs have an official minimum score. However, mortgage lenders are allowed to set their own credit limits. If creditworthiness is a concern of yours, ask lenders about their FMERR or HIRO requirements before applying.

What is the middle class mortgage incentive?

There is no specific “middle class” mortgage relief program. However, Fannie Mae and Freddie Mac's HARP replacement programs could provide relief to middle-class homeowners who have not benefited from rising home values ​​and need to cut their mortgage payments.

Check your HARP replacement eligibility

HARP replacement programs can provide relief to homeowners struggling with difficulty
Affordability. Mortgage rates today are still at historic lows
Refinancing can help borrowers secure a lower interest rate and lower monthly payment for that
long term.

Your eligibility for Fannie Mae and Freddie Mac's relief refinancing programs

Check your new tariff (April 1st, 2021)

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