Editor’s Note: The HARP program expired December 31, 2018, and a popular replacement option, the Freddie Mac Enhanced Relief Refinance (FMERR) loan expired September 30, 2019.

However, Fannie Mae’s High LTV Refinance Option (HLRO) currently has no expiration date. Similar to HARP and FMERR, it’s a great loan option for underwater homeowners who don’t have enough equity earned in their home to qualify for a refinance.

A HARP refinance is just one option. There are other ways to get help with your mortgage payments, but you might need to think outside the box.

Q: My wife and I are seriously upside down due to the economy. We paid $530,000 for our current home about 6 years ago right before the crash. Our home is now valued in the mid to upper 300,000’s. We are so upside down and I don’t see any relief anywhere.

We need to lower our mortgage payment badly. It is at $3,000 per month and our loan is not Fannie Mae or Freddie Mac so we DO NOT qualify for a HARP which is sooo disappointing in our situation. I will be retiring in less then 6 years and I have to have a better situation or we will have no choice but to walk away. I don’t see any other way at this point unless we can refinance at a lower rate that is more in line with today’s rates.

We have never missed a payment on our mortgage but we are seriously strapped and barely hang on all the time.

What are our options? There has to be something that can be done here and it doesn’t seem fair that we can’t be involved in a refinance with HARP just because of the type of loan. What do you suggest my friend?

–Bill

There are so many people in your situation right now. I think that’s why so many are calling for sweeping changes in HARP – often referred to as HARP 3.0. There is a bill in Congress now, but I would call it more like HARP 2.1 instead of HARP 3.0. This is because it reduces costs on HARP and would allow people to qualify without proving employment – but the program is still only available for loans owned by Fannie/Freddie (the GSEs). Also, it doesn’t look like this bill will pass.

Here are my suggestions at this point:

1. Contact your elected Representative and tell them that a sweeping bill needs to pass in Congress, allowing non-GSE loans to be eligible for HARP.

2. Explore MakingHomeAffordable.gov for programs you may qualify for. HARP is just one of the government programs available now. Here are a few examples:

• HAMP – This is a modification program that allows some to reduce their mortgage payments. Apply by contacting your servicer.
• UP – This program may allow you to suspends or reduces your monthly payment until you can find your next job.
• Hardest Hit Fund – This is special allocation to 18 states and the District of Columbia to assist homeowners who live in the areas hardest hit by the housing crisis. Your state may have special programs available. One example is a HARP 3.0-like program for Multnomah County, Oregon residents.

3. Call your existing servicer. Even if they don’t participate in any of these government programs, they may have modification programs of their own. Many servicers would rather reduce your principle or interest rate than deal with the foreclosure.

4. Rental markets are getting stronger. In the next 6 years before you retire, rent out the home at or close to your current mortgage payment. Once your payment is covered by the renter(s), you’re free to downsize your own housing payment.

5. If it’s a big home and you have extra space, think about remodeling part of the home into a mother in law unit. Then, rent out this portion of your home. If you don’t have money for the remodel, invite a (trusted and pre-screened) boarder to live in a spare room, family style.

6. Wait for values to come back, and sell or refinance at that time. Believe it or not, the housing market is on a rebound and many states are seeing double digit appreciation.

I know none of these are the quick-fix that HARP could offer. But, they are some ideas you can experiment with. With a little creativity and some luck, you may be able to get help with your mortgage payments even without HARP.