Could the HARP Extension Mean the Eventual Release of HARP 3.0?

By Stevie Duffin Updated on 4/11/2013

By Daniel Duffield

On Thursday, the Federal Housing Finance Agency (FHFA) released news that the Home Affordable Refinance Program (HARP) would be receiving an extension, with the previous deadline of December 31, 2013 being moved back two years to December 31, 2015.

With the extension of this greatly beneficial refinance program, many have speculated that official news of a HARP 3 release could be coming in the relatively near future. Although many were pessimistic that the program would ever see an official release, Thursday's news has renewed the hopes of many homeowners with high loan-to-value (LTV) ratios.

What is HARP 3.0?

While the details of the program have yet to be officially disclosed, many experts anticipate that HARP 3.0 would remove the current HARP requirements that borrowers must have mortgages owned by either Fannie Mae or Freddie Mac to qualify. As such, millions of underwater borrowers with non-GSE owned mortgages would be given an opportunity to refinance to lower mortgage rates and thereby reduce their monthly mortgage payments.

Though the news provides no guarantee that HARP 3.0 will ever be released, many see the extension of the HARP program as a sign that the program will continue to evolve, allowing more homeowners to refinance their mortgages after being negatively impacted by the burst of the U.S. housing bubble.