FANNIE MAE
Re Plus™/Home Affordable Renance Program (HARP)
Helps responsible borrowers with little or no home equity renance into
more affordable mortgages
BACKGROUND AND PURPOSE
The Re Plus™/Home Affordable Renance Program
(HARP) helps borrowers with little or no equity in their
homes renance into more affordable mortgages.
HARP targets borrowers with high loan-to-value (LTV)
ratios and who have limited delinquencies over the 12
months before renancing. Changes possible through
HARP include lower interest rates, shorter loan terms,
or changing from an adjustable-rate to a xed-rate
mortgage. HARP guidelines have been simplied and
relaxed over the life of the program, meaning that even
people who were previously turned down may now be
eligible for HARP renancing. For example, in 2011,
the LTV ceiling was removed for xed-rate mortgages,
property appraisal requirements were waived in certain
circumstances, certain risk fees for borrowers selecting
shorter amortization terms were eliminated, and certain
representations and warranties were waived. In 2013,
the eligibility date was changed from the date the loan
was acquired by Fannie Mae to the date on the note,
increasing the pool of eligible borrowers.
HARP was introduced in March 2009 to address the
decline in home values that occurred over the pre-
vious few years. HARP must be renewed annually
by Congress.
BORROWER CRITERIA
Original loan requirements: The original loan owned
or guaranteed by Fannie Mae (e.g., no Freddie Mac,
VA, FHA, or USDA loans).
Age of loan: The original loan must have been origi-
nated on or before May 31, 2009.
PROGRAM NAME
Re Plus™/Home Affordable Renance Program (HARP)
AGENCY
Fannie Mae
EXPIRATION DATE
December 31, 2018. HARP must be renewed annually by Congress.
APPLICATIONS
No program-specic application is required. For information on becoming a Fannie Mae seller,
see https://www.fanniemae.com/singlefamily/become-seller-servicer
WEB LINK
http://www.harp.gov
CONTACT
INFORMATION
[email protected] (ask for a call-back in your email)
APPLICATION PERIOD
Continuous
GEOGRAPHIC SCOPE
National. HARP tracks the number of eligible loans by state and MSA. Information is
available quarterly at http://www.harp.gov/Default.aspx?Page=363
127 | FDIC | Affordable Mortgage Lending Guide
-
-
-
-
-
Loan-to-value limits: The original loan must be above 80 percent LTV,
with no upper limit on LTV for xed-rate mortgages.
Delinquency: The borrower must not have made any late mortgage pay-
ments in the last six months and no more than one 30-day late payment
in the last 12 months.
Income limits: The program has no income limits.
Credit: There is no minimum credit score; Fannie Mae waives its normal
620 minimum credit score.
Occupancy and ownership of other properties: HARP renances may be
performed on primary residences, investment properties, and one-unit
second homes. Because the renance represents Fannie Mae’s existing
risk, there is no requirement that occupancy stay the same.
Special populations: No benet is conferred by being a member of a
special population.
Property type: Single-family homes of one- to four-units and condomini-
ums are eligible.
LOAN CRITERIA
Loan limits: FHFA publishes Fannie Mae’s conforming loan limits annu-
ally. See Resources for a link to the current loan limits.
Adjustable-rate mortgages: Only xed-rate mortgages are allowed.
Loan-level price adjustments: For primary residences with LTV ratios
greater than 80 percent, Fannie Mae charges zero percent in fees on
loans with terms less than 20 years, and 0.75 percent on loans with
terms of more than 20 years.
Mortgage insurance: Where the original LTV of the existing loan was
greater than 80 percent and mortgage insurance is still in force on the
existing loan, then the lender must obtain mortgage insurance (MI) on
the new mortgage. Lenders may obtain either the level of coverage
in force on the existing mortgage or the current standard coverage.
Lenders are encouraged to provide the lowest cost option for borrow-
ers. If the mortgage being renanced was less than 80 percent LTV or
the original mortgage insurance policy was terminated, then no mort-
gage insurance coverage is required.
Underwriting: Re-underwriting is necessary if payments are increas-
ing more than 20 percent. Fannie Mae recommends using Desktop
Underwriter® (DU) where possible; manual underwriting is an option if
circumstances warrant. Borrowers may use a new lender if DU is used.
Fees: For xed-rate loans on primary residences with LTV ratios greater
than 80 percent, Fannie Mae’s fee is capped at zero percent on loans
with terms less than 20 years and 0.75 percent on loans with terms of
more than 20 years.
POTENTIAL BENEFITS
Lenders do not need to perform
new underwriting or review new
appraisals in most cases.
Fannie Mae has reduced the fees
it charges lenders that help bor
rowers refinance into less risky,
shorter-term loans.
POTENTIAL CHALLENGES
This program has several bar
riers to being a source of new
business. Eligible properties
are concentrated in a few mar
kets. Also, if borrowers are
going through a new lender, the
lender will need to perform a
new appraisal and underwriting,
eliminating the processing effi
ciencies offered by the program.
If payments are going up by more
than 20 percent, requalification is
necessary, meaning more work
for lenders assisting borrow
ers who are making substantial
changes to their mortgages.
FDIC | Affordable Mortgage Lending Guide | 128
Appraisal: There are a number of exceptions to the
usual reps and warrants when using HARP. A “property
eldwork waiver” may be offered by DU for a fee of
$75 that would allow the lender or borrower to esti-
mate the home’s value rather than doing an appraisal.
DU uses the property address to standardize estimates
of home values. The lender, however, is responsible for
compliance with all federal, state, and local laws, rules,
and regulations, which may require appraisals.
Potential Benets
• Lenders do not need to perform new underwriting
or review new appraisals in most cases.
• Fannie Mae has reduced the fees it charges lend-
ers that help borrowers renance into less risky,
shorter-term loans.
• Lenders now need less paperwork for income
verication, and have the option of qualifying a
borrower by documenting that the borrower has at
least 12 months of mortgage payments in reserve.
• If a lender underwrites a HARP loan that it did not
initially underwrite, the reps and warrants on the
loan will sunset in 12 months rather than 36 months
for other GSE products.
Potential Challenges
• This program has several barriers to being a source
of new business. Eligible properties are concen-
trated in a few markets. Also, if borrowers are going
through a new lender, the lender will need to per-
form a new appraisal and underwriting, eliminating
the processing efciencies offered by the program.
• If payments are going up by more than 20 percent,
requalication is necessary, meaning more work
for lenders assisting borrowers who are making
substantial changes to their mortgages.
• The program must be extended annually by
Congress.
• A relatively limited pool of borrowers remains eligi-
ble for this program, as most borrowers who would
benet from a renance have already done so.
SIMILAR PROGRAMS
• Freddie Mac Relief Renance
SM
• FHA Streamline Renance
129 | FDIC | Affordable Mortgage Lending Guide
RESOURCES
Direct access to the following web links can be found at https://www.fdic.gov/mortgagelending.
Fannie Mae’s loan-level price adjustment table
https://www.fanniemae.com/content/pricing/llpa-matrix-re-plus.pdf
FHFA Conforming loan limits
http://www.fhfa.gov/DataTools/Downloads/Pages/Conforming-Loan-Limits.aspx
Frequently asked questions
https://www.fanniemae.com/content/faq/harp-du-re-plus-faqs.pdf
To nd whether the loan in question is eligible for HARP
https://www.knowyouroptions.com/loanlookup
FDIC | Affordable Mortgage Lending Guide | 130
