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The Home Affordable Refinance Program was created to help borrowers and home lending institutions deal with market fluctuations represented by the housing market crash. Their help comes in the form of assuming some of the risk that lending institutions take when offering refinance loans to folks who have suffered as a result of the housing market’s crash. The Federal Housing Finance Agency continues to shape new programs to deal with society-wide housing issues, like their new refinance program introduced in 2016.

An Evolving Program to Help Homeowners Refinance Beyond Normal Loan Requirements

In the interest of helping homeowners who bought and borrowed at the top of the market before the housing crash, the The Federal Housing Finance Agency (FHFA) announced that Fannie Mae and Freddie Mac (the Enterprises), at FHFA’s direction, will implement a new refinance offering aimed at borrowers with high loan-to-value (LTV) ratios.  The new refinance offering will provide much-needed liquidity for borrowers who are current on their mortgage but are unable to refinance through traditional programs because their LTV ratio exceeds the Enterprises’ maximum limits.  The FHFA Director Melvin L. Watt said,  “This new offering will give borrowers the opportunity to refinance when rates are low, making their mortgages more affordable and thus reducing credit risk exposure for Fannie Mae and Freddie Mac.”

HARP Will Probably be Extended Through September 30 2017

HARP continues to be one of the most successful crisis-era programs with more than 3.4 million homeowners already having refinanced their mortgage.  More than 300,000 U.S. homeowners could still refinance through HARP between now and October 1, 2017. To ensure that high LTV borrowers who are eligible for HARP will not be without a refinance option while the new refinance offering is being implemented, FHFA is creating a what they refer to as a bridge program by also directing the Enterprises to extend HARP through September 30, 2017.