Can You Refinance Through the HARP Program With a Freddie Mac Loan?

HARP

The Home Affordable Refinance Program, better known as HARP, allows homeowners to refinance their mortgage loans even if they have negative equity in their homes. Most mortgage lenders will only refinance your home loan if you have at least 20 percent equity. But under HARP, you can refinance even if you owe as much as 125 percent of your home's value on your existing mortgage loan. As an example, if you owned a house valued at $200,000, you could refinance even if you owed as much as $250,000 on your mortgage loan.

Under the guidelines of HARP, only loans that are owned or guaranteed by either Fannie Mae or Freddie Mac are eligible for the federal program. If you aren't sure if your loan is owned or guaranteed by Freddie Mac, you can log onto the government's HARP website and click on the Freddie Mac loan look-up tool. This tool will tell you if Freddie Mac is involved with your home loan.

Paying off a home loan owned or guaranteed by either Fannie Mae or Freddie Mac isn't the only qualification to participate in HARP. You'll also have to be current on your mortgage payments. If you have paid your mortgage loan more than 30 days late in the past 12 months, you won't be allowed to participate in the program. You also must be able to prove to your mortgage servicing company that you have the financial ability to make your new mortgage payments should you earn approval for a refinance.

If you are paying off a home loan owned or guaranteed by Freddie Mac and you want to refinance through HARP, call the mortgage company to which you are currently sending your monthly payments. Unlike with traditional refinances, you must work with your existing mortgage company when you are seeking a HARP refinance.