RefiNow, FMERR, and Other HARP Replacement Refi Options: Do You Qualify?

Due to the Covid-19 pandemic and extremely low interest rates, many homeowners are looking to refinance their loans. In fact, 17% of U.S. homeowners with a mortgage on their primary residence refinanced in 2020, according to a NerdWallet survey. However, this can be a challenge if you currently owe more than your home is worth, possibly because home values started trending downwards in your area. When this occurs, it’s sometimes called an “underwater” or “upside-down” mortgage.

Prior to 2018, homeowners that owed more than 97% of the value of their home could turn to HARP, the Home Affordable Refinance Program. This program was developed to help homeowners after the 2008 financial crisis, which caused many borrowers to find themselves with an underwater mortgage. While it has since been discontinued, there are several programs that have risen in its place. Read on to find out which programs you may qualify for to refinance your home loan.

What Are the HARP Replacement Refinancing Options?

Fannie Mae and Freddie Mac are government-sponsored mortgage companies established by the United States Congress. Both entities offer alternatives to the HARP program that may be viable for low-income borrowers interested in refinancing their mortgage. The main programs are:

  • Freddie Mac Enhanced Relief Refinance (also known as FMERR, the ERR program, the FMERR program, and the FMERR relief program)
  • Fannie Mae High Loan-to-Value Refinance Option.
  • Fannie Mae’s new RefiNow program, which is expected to be followed by a similar option from Freddie Mac later this year. As of June 9th, they have not released any details.

These refinancing alternatives can shorten the period or lower the interest rate on your current loan while also lowering your monthly principal and interest payments. These loans have several benefits over traditional loans. They offer an easy application system and less stringent financial requirements. If you need to refinance or just want to take advantage of the current interest rate but don’t qualify for the typical options, these alternatives could be the solution.

Which Refinancing Option is Right for You?

It can be confusing to understand which refinancing option you qualify for and which is right for you. Below is a summary of requirements and benefits of each option. You’ll first need to know who backs your loan (Freddie Mac or Frannie Mae). If your mortgage is backed by Freddie Mac, you are not eligible for the new RefiNow path to refinancing your home. However, it is expected that Freddie Mac will offer a similar option later this year.


  • Have a Freddie Mac-backed mortgage You can find out if it is using Freddie’s loan lookup tool
  • Loan-to-value is at least 97.01% for a one-unit, owner-occupied residence
  • Loan originated on or after November 1, 2018
  • At least 15 months must have passed on the loan
  • No 30-day late payments in the past 6 months, and no more than one in the past 12 months

Lenders must offer the borrower at least one of the following benefits: Reduced monthly principal and interest payment, lower interest rate, a shorter amortization term, or more stable mortgage products, such as moving from an adjustable-rate mortgage to a fixed-rate mortgage.


  • Have a Fannie Mae-backed mortgage. If you’re not sure who backs your loan, you can use this lookup tool.
  • The loan must have originated on or after Oct. 1, 2018
  • At least 15 months must have passed on the loan
  • No payments more than 30 days late in the last 6 months of the loan.
  • One or less payment that was more than 30 days late during the previous 12 months of the loan.
  • No delinquencies greater than 30 days.
  • You haven’t previously taken advantage of the HARP relief program on this loan.

Lenders must offer the borrower at least one of the following benefits: Reduced monthly principal and interest payment, lower interest rate, a shorter amortization term, or more stable mortgage products, such as moving from an adjustable-rate mortgage to a fixed-rate mortgage.


RefiNow is a new initiative launched this summer to help homeowners take advantage of near historically low interest rates. The requirements are…

  • Have a Fannie Mae-backed mortgage
  • Income at or below 80% of median income in their area
  • No missed payments in the previous six months and no more than one in the previous 12 months
  • Mortgage loan-to-value ratio below 97%
  • FICO credit score of at least 620

If approved, lenders will be required to reduce your monthly mortgage payment by at least $50 and reduce your interest rate by at least .5%.

As you can see, each option has its own requirements, but they are fairly similar. Each lender also requires that the borrower receives net benefits from refinancing, which is an effort to prevent buyers from making a refinancing decision that will not improve their situation.

When to Consider Refinancing Your Loan

Is it even the right time for you to refinance? After reviewing the qualifying requirements above, think about your financial goals and how long you plan to stay in your current home. If you want to pay off your loan faster with shorter terms, refinancing could be an excellent idea. Conventional wisdom tells us that if mortgage rates are lower by 1% or more than your current rate, it may be a smart idea to refinance. You can use a mortgage refinance calculator to calculate your potential savings.

Don’t forget that there are costs associated with refinancing, including an appraisal, a credit check, origination fees and closing costs. These expenses can really add up, so it’s important to do the math and ensure that you will benefit long-term.

How to Refinance Your Loan

If you want to refinance but are struggling to find a lender because you owe more than your home is worth, explore these options from Fannie Mae and Freddie Mac. Your current lender should also be able to help you understand whether or not you are eligible and any other options you can consider.

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