High LTV refinance option

Written by Bill MacDonaldSeptember 14th, 20222 minute read

High LTV refinance option

The Home Affordable Refinance Program® (HARP®) ended on December 31, 2018. The HARP loan program was set up by the Federal Housing Finance Agency in March 2009 to assist homeowners refinance their mortgage even though the appraised value was less than the mortgage balance; also called underwater mortgages.

The High LTV Refinance Program available through the Federal National Mortgage Association (Fannie Mae) is offered to homeowners who are making their mortgage payments on time but whose loan to value (LTV) for a new mortgage exceeds the maximum allowed for the standard limited cash-out refinance.

The Federal National Mortgage Association is a privately held corporation that purchases mortgages from banks and other lenders. Fannie Mae is protected by the Federal Government from default.

According to Fannie Mae, borrowers must benefit from the refinance in at least one of the following ways:

  • Interest rates are lower.
  • Monthly principle and interest payments are reduced.
  • A shorter amortization period is available.
  • Moving from an adjustable-rate to a fixed-rate mortgage is an example of a more stable mortgage product.

    SOURCE: High LTV Refinance Option


Borrowers must be current with their payments and have:

  • No 30-day delinquencies in the most recent six months, and no more than one 30-day delinquency in the past 12 months and no delinquency greater than 30 days.
  • Only an existing Fannie Mae mortgage may be refinanced to a new Fannie Mae mortgage. Fannie Mae Loan Lookup
  • The date of the mortgage note being refinanced must be on or after Oct. 1, 2017.
  • A minimum of 15 months have passed between the mortgage note being refinanced and the Note Date of the high LTV refinance mortgage.

Eligible properties

The High LTV Refinance Program is available for one to four-unit principal residences, one-unit second homes, and one to four-unit investment properties.

Credit score requirement

There is no minimum credit score with the High LTV Refinance Program and simplified documentation requirements for income, employment, and assets.

Debt to income ratio requirement

The High LTV Refinance Program has no maximum debt-to-income or loan-to-value (LTV) ratio requirements, and an assessment may not be needed.

The debt-to-income ratio is a metric used by lenders to compare total monthly income to total monthly debt payments. A normal refinancing application may be sunk by large monthly debt payments, however the High LTV Refinance Program removes the debt to income ratio.

The Federal Home Loan Mortgage Corporation, also known as Freddie Mac offers a similar refinance program to the Fannie Mae High LTV Refinance Program. Freddie Mac's program is called the Freddie Mac Enhanced Relief Refinance℠ program. The guidelines are almost identical to the Fannie Mae program. The applicant must be refinancing an existing Freddie Mac mortgage. Freddie Mac offers a loan lookup tool for prospective applicants.

How to apply for a High LTV Refinance or Enhanced Relief Refinance program

Applications are made through any lender who participates with either Fannie Mae or Freddie Mac. Most banks and mortgage brokers will offer one or the other loan programs.