On this page
- Is the HIRO program still available?
- What a high LTV means, and when you’re underwater
- Refinance LTV limits by loan type
- High LTV refinance options by loan type
- Net tangible benefit rules for streamline refinances
- Worked example: a high LTV refinance on a conventional loan
- Underwater mortgage refinance when Fannie Mae or Freddie Mac doesn’t own your loan
- Refinancing a second mortgage when underwater
- If no underwater mortgage refinance fits
- Risks of a high LTV refinance
- Frequently asked questions
- Your next step
Fannie Mae’s High LTV Refinance Option (HIRO) and Freddie Mac’s Enhanced Relief Refinance (FMERR) are not open to new loans, and HARP ended in 2018. However, you can still get a high LTV refinance with little or no equity. The route depends on your loan type. An FHA streamline, a VA IRRRL or a USDA streamlined-assist refinance does not use your home’s value the usual way, and a conventional loan can go up to a 97% loan-to-value ratio in some cases.
Below are the LTV limits for each refinance type, the benefit tests streamline loans use, and what to do if no refinance fits.
Is the HIRO program still available?
No. HIRO was a Fannie Mae refinance for borrowers who paid their Fannie Mae loan on time but owed too much to qualify for a standard refinance. It had no maximum LTV.
Fannie Mae paused HIRO in 2021 “due to the low volume and the impact of the Revised QM Rule,” according to its High LTV Refinance Option page. HIRO loans needed application dates on or before June 30, 2021. As of October 29, 2026, its Eligibility Matrix still says acquisition of high LTV refinance loans is suspended.
FMERR is closed too. Freddie Mac’s Guide says FMERR loans with applications received on or after July 1, 2021 are not eligible “until further notice” (see our FMERR status page). HARP, the earlier relief program, ended on December 31, 2018.
Program status can change; these statuses were checked on October 29, 2026. If you already know your loan type, compare current refinance offers from several lenders.
What a high LTV means, and when you’re underwater
Your loan-to-value ratio (LTV) is your loan balance divided by your home’s value. Say you owe $300,000 on a home worth $320,000. Your LTV is about 93.8%. If you owe more than the home is worth, your LTV is above 100%, and your mortgage is underwater.
ATTOM reported that 3.2% of mortgaged homes were seriously underwater in the second quarter of 2026, up from 2.7% a year earlier. ATTOM defines seriously underwater as owing at least 25% more than the home’s estimated value.
With a second mortgage or HELOC, lenders look at your combined LTV. Our guide to HTLTV and HCLTV shows that calculation.
Refinance LTV limits by loan type
The maximum LTV depends on the program and, for conventional loans, on who owns your loan. A lender can set a lower limit as an overlay.
| Refinance type | Maximum LTV | Appraisal | Who can use it |
|---|---|---|---|
| FHA streamline (non-credit-qualifying) | No LTV limit. The new loan is capped by your current balance. | Not required | Borrowers with an FHA loan now |
| FHA rate-and-term | 97.75% | Required | Owner-occupants for the past 12 months, credit score of 580 or higher |
| FHA cash-out | 80% | Required | FHA-eligible borrowers |
| VA IRRRL | No VA LTV limit. The new loan is based on your current VA balance plus allowed costs. | Not required by VA | Borrowers with a VA loan now |
| VA cash-out | 100% of the VA appraised value. Lenders may set a lower maximum. | Required | Eligible veterans and service members |
| USDA streamlined-assist | No LTV test. The new loan can include your balance and closing costs. | Not required | Borrowers with a USDA guaranteed loan now |
| Fannie Mae limited cash-out, one-unit home | 97% if Fannie Mae owns or securitized your loan (fixed rate only). Otherwise 95%. | Usually required | Conventional borrowers |
| Freddie Mac no cash-out, one-unit home | 95%. Up to 97% with HomeOne if Freddie Mac owns or securitized your loan. | Usually required | Conventional borrowers |
| Conventional cash-out | 80% | Usually required | Conventional borrowers |
| RefiNow (Fannie Mae) and Refi Possible (Freddie Mac) | 97% | Usually required | Income at or below 100% of area median income |
Sources: HUD Handbook 4000.1, the VA Lender’s Handbook, chapter 6, USDA HB-1-3555, and the Fannie Mae and Freddie Mac guides, checked October 29, 2026.
High LTV refinance options by loan type
Each streamline refinance works only if your current loan is that same type.
FHA streamline refinance
A non-credit-qualifying FHA streamline needs no appraisal, so your home’s value does not limit it. Instead, HUD caps the new loan based on your current balance.
When the lender gets the FHA case number, you must have made at least six payments. Also, six full months must have passed since the first payment due date, and 210 days since closing. You also need on-time payments for the past six months, with no more than one 30-day late payment. See our FHA streamline refinance guide for rates and steps.
VA IRRRL
A VA Interest Rate Reduction Refinance Loan (IRRRL) replaces a VA loan with a new VA loan. VA generally requires no appraisal, credit information or underwriting, though a lender can require them.
You must have made six consecutive monthly payments, and 210 days must have passed since the first payment due date. The IRRRL funding fee is 0.5%. Our VA IRRRL guide covers the process.
USDA streamlined-assist refinance
USDA’s streamlined-assist option needs no new appraisal for a guaranteed loan. The existing loan must have closed at least 180 days earlier, with no delinquency over 30 days in the past 180 days.
The new loan must be a 30-year fixed rate no higher than your current rate, and your household income must be within USDA limits. See our USDA streamline refinance guide.
Conventional high LTV refinance: the 97% rule
No conventional streamline refinance exists, as our conventional streamline refinance guide explains. So a conventional refinance needs a new value, usually from an appraisal.
Fannie Mae allows a limited cash-out refinance up to 97% LTV when it owns or securitized your current loan. The new loan must be a fixed-rate loan on a one-unit principal residence, and high-balance loans are not eligible. Freddie Mac’s HomeOne loan allows 97% on a no cash-out refinance when Freddie Mac owns or securitized your current loan. Otherwise, the usual limit is 95%.
To find out who owns your loan, use the Fannie Mae Loan Lookup or the Freddie Mac Loan Look-Up Tool. See our conventional refinance guide.
If your income is at or below 100% of your area’s median income, RefiNow (Fannie Mae) or Refi Possible (Freddie Mac) may fit. Both allow up to 97% LTV, require the agency to own your current loan, and were still offered as of October 2026. See our guide to RefiNow and Refi Possible.
Net tangible benefit rules for streamline refinances
A net tangible benefit is a measurable gain for the borrower, such as a lower rate or payment. Because streamline programs skip much of the usual underwriting, they set a benefit test instead.
- FHA streamline: For a fixed-to-fixed refinance with no term cut, your combined rate (interest rate plus annual MIP rate) must drop by at least 0.5 percentage points. Other tests apply to ARMs and shorter terms.
- VA IRRRL: A fixed-to-fixed IRRRL must lower your rate by at least 0.5 percentage points (2 points for fixed to ARM). The lender must also certify that you recoup the closing costs through lower payments within 36 months.
- USDA streamlined-assist: Your principal, interest and annual fee payment must drop by at least $50 a month.
- RefiNow and Refi Possible: Your rate must drop by at least 0.5 percentage points, and your principal, interest and mortgage insurance payment must go down.
HIRO had its own benefit test, but it ended with the program. If you don’t pass the FHA test, our guide to the FHA net tangible benefit rule covers next steps.
Worked example: a high LTV refinance on a conventional loan
Say a buyer took out a $332,500 conventional loan three years ago at 7.75% (an example rate) on a 30-year fixed. The payment is $2,382.07 a month, and the balance is now about $323,000 ($323,023.10). The home is now worth $330,000 (an example value), so the LTV is about 97.9%.
That is above both limits, so the borrower brings cash:
| Who owns the loan | Maximum new loan | Cash to bring to closing, before closing costs |
|---|---|---|
| Fannie Mae (97% limit) | $320,100 | about $2,900 ($2,923.10) |
| Another investor (95% limit) | $313,500 | about $9,500 ($9,523.10) |
In the Fannie Mae case, a new 30-year loan of $320,100 at 7.24%, the Freddie Mac average rate on October 29, 2026, has a payment of $2,181.48 a month. That is about $200 less ($200.59).
Now add closing costs. With example costs of 3% of the new loan (about $9,600, or $9,603), the break-even is about 48 months. The new 30-year term also starts over, while the old loan had 27 years left.
These figures cover principal and interest only. They leave out property taxes, homeowners insurance and mortgage insurance, which a loan at this LTV would likely need. Your rate and costs will depend on your credit and the lender, so check today’s mortgage rates and compare Loan Estimates.
Underwater mortgage refinance when Fannie Mae or Freddie Mac doesn’t own your loan
If neither lookup tool finds your loan, a bank, credit union or other investor likely holds it, and that holder sets the options. Ask your servicer who owns the loan. A portfolio lender may have its own refinance or modification.
An FHA rate-and-term refinance is another route. HUD allows up to 97.75% LTV if the home has been your principal residence for the past 12 months and your credit score is 580 or higher. In the example above, 97.75% of $330,000 is $322,575. However, FHA adds an upfront MIP of 1.75% and annual MIP of 0.55% for most 30-year loans above 95% LTV.
Refinancing a second mortgage when underwater
A second mortgage or HELOC must be paid off or subordinated, which means the second lender agrees to stay behind the new first mortgage. Your lender then counts both loans in your combined LTV.
Fannie Mae’s limited cash-out refinance can pay off only a second lien that was used to buy the home. RefiNow and Refi Possible can’t pay off a second lien at all. For FHA, the maximum combined LTV on a rate-and-term refinance is 97.75%. Our HTLTV guide shows how lenders run the numbers.
If no underwater mortgage refinance fits
You still have choices if the LTV is too high:
- Cash-in refinance: Bring cash to closing to lower the LTV to the program limit. See our cash-in refinance guide.
- Servicer help for a hardship: If you’re struggling to pay, ask your servicer about a repayment plan or a loan modification, such as the Fannie Mae Flex Modification for a Fannie Mae loan. See our mortgage relief guide.
- Pay down the balance: Extra principal payments lower your LTV over time.
- Wait: If local values recover, your LTV falls on its own.
Risks of a high LTV refinance
A high LTV refinance can lower your payment, but it carries extra costs:
- Mortgage insurance: A conventional loan above 80% LTV needs private mortgage insurance, and FHA loans carry MIP. See how to remove PMI.
- A new term: A new 30-year loan resets the clock, so you may pay more interest overall.
- Closing costs: Weigh them against the monthly saving. Our guide to refinance costs lists typical fees.
- Cash into a falling asset: Money you bring to closing goes into a home that has lost value.
Our guide on whether refinancing is worth it can help you decide.
Frequently asked questions
Is the HIRO program still available?
No. Fannie Mae paused HIRO in 2021 for loans with applications dated after June 30, 2021. As of October 29, 2026, Fannie Mae still lists it as suspended.
Can you refinance an underwater mortgage?
Often, yes. An FHA streamline, VA IRRRL or USDA streamlined-assist refinance doesn’t depend on your home’s value. A conventional loan can go to 97% LTV if Fannie Mae or Freddie Mac owns it.
What is the maximum LTV for a refinance?
FHA rate-and-term allows 97.75%, conventional rate-and-term allows 95% to 97%, and most cash-out refinances stop at 80%. VA cash-out can reach 100%, though lenders may set a lower limit.
Can I refinance if my home value has dropped?
Yes, if your loan type allows it. FHA, VA and USDA streamline refinances don’t need a new appraisal. For a conventional loan, a lower value raises your LTV, so you may need cash at closing.
How do I refinance an underwater mortgage not owned by Fannie Mae or Freddie Mac?
Ask your servicer who owns the loan and what options that investor offers. You may also qualify for an FHA rate-and-term refinance up to 97.75% LTV.
Can I refinance with a second mortgage if I’m underwater?
Yes, but the second lien must be paid off or subordinated to the new loan. The lender counts both loans in your combined LTV.
Your next step
First, find out your loan type and who owns it. That decides whether you have a streamline option, a 97% conventional option or fewer choices. Then ask a few lenders to run the numbers. If the break-even point comes before you expect to move, a high LTV refinance may be worth it.
