Harp 2.0 Refinance

HARP 2.0 is a mortgage refinance program that is designed to help homeowners who have become what is known as “underwater.” The term “underwater” means that you owe more on your property than what it is worth. There are cases where you purchase a home and the value drops below the amount that you owe on your home. This can also happen with other types of assets as well such as vehicles. HARP 2.0 was created on December 11. 2011 and revises the Home Affordable Refinance program (aka HARP 1.0). The first HARP program failed due to only allowing certain individuals being eligible for the program. The next logical step was to create a second version to this that would open the opportunity up to many more homeowners. HARP 2.0 addressed many of the flaws that the original program suffered from.

HARP 2.0 is a program that is designed to help those who are able to make there mortgage payments, but are not able to take advantage of the low interest rates that are currently available. A homeowner may find themselves locked out of refinancing because they owe much more than their home is worth. Even if your home is far “underwater” there is no amount too much that would deem you un-eligible.

HARP 2.0 Eligibility Requirements


  • A current home loan must be active with no late payments in the last 6 months and no more than one late payment in in the last twelve months.
  • Mortgages must be for 80% minimum of the home’s value
  • The home cannot be refinanced under the original HARP program
  • The mortgage must have been obtained by Freddie Mac or Fannie Mae before May 31, 2009
  • Mortgage must be owned by Freddie Mac or Fannie Mae

Benefits of HARP 2.0

In order for this to be properly enacted into law, the loan has to provide the borrower with a real benefit. A lower interest rate is a likely way a lender will meet the requirement. A few more ways to meet this requirement are listed below.

  • You can shorten the length of your mortgage. This will likely give a lower interest rate over the lifespan of the loan. The borrower can receive a lower monthly payment but shave off months/years from their loan amount.
  • Transitioning (for example) from an adjustable rate to a fixed rate. This could be considered a more stable product.
  • Smaller monthly payment




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Sierra Pacific Mortgage NMLS# 1788. Michael Shotnik NMLS: 218281, CO License: 100017466. Not licensed in Alaska or New York.  To check license status of mortgage loan originator, visit D.O.R.A. and NMLS consumer access.