HARP Extended through 2018 as Changes Made to High-LTV Refi Program

The Federal Housing Finance Agency today extended the Home Affordable Refinance Program through Dec. 31, 2018. The program was scheduled to phase out in September upon the launch of Fannie Mae and Freddie Mac’s new streamlined refinance program for borrowers with high loan-to-value ratios.

However, the agency today announced that the new high LTV refi program would only be available for borrowers who originate their loans on or after Oct. 1, 2017; as a result, FHFA determined that HARP remained necessary to serve eligible existing borrowers. More than 143,000 homeowners may still be able to benefit from HARP, the agency added. Since its inception in 2009, more than 3.47 million refinances have been done through HARP.

The eligibility date for the new high LTV refi program was necessary to support the GSEs’ credit risk transfer programs, which since March have seen $54.2 billion worth of risk transferred. Fannie and Freddie will modify future credit risk transfers to accommodate the new streamlined refi program.

Meanwhile, FHFA today announced that nearly 357,000 refinances of Fannie or Freddie loans were completed in the second quarter, with 9,700 of them coming through HARP. HARP refinances dropped by one third since the prior quarter. Fourteen percent of second-quarter loans refinanced through HARP had a loan-to-value ratio greater than 105 percent. In Nevada and Florida, HARP refinances this year accounted for at least 6 or more percent of total refinances, double the national average of 3 percent.