The government’s Home Affordable Refinance Program was all set to end next month, September 30, to be exact, but that’s not the case anymore.
The Federal Housing Finance Agency announced Thursday that it is extending HARP through Dec. 31, 2018, adding an additional 15 months onto the program’s already extended lifespan.
In June 2014, then-Department of the Treasury Secretary Jacob Lew announced a series of initiatives designed to spur the flailing housing market, including the extension of the Home Affordable Modification Program until Dec. 31, 2016.
Later, in May 2015, the FHFA announced that the deadline that it was extending the deadline for HARP to the end of 2016 as well, matching the deadline of the HAMP.
But just about one year ago, the FHFA again announced that that it was delaying the end of HARP, this time until Sept. 30, 2017.
At the time, the FHFA said that it was extending the crisis-era refinance program until Sept. 30, 2017 in order to “create a bridge” to a new refinance product it was planning to launch in October 2017.
The program will see Fannie Mae and Freddie Mac implement a new streamlined refinance offering aimed at borrowers with high loan-to-value ratios.
The FHFA said Thursday that the new high-LTV refinance program is still set to launch in October, but the program is being modified slightly, which necessitates extending the HARP deadline through all of 2018.
Specifically, the FHFA said Thursday that it is establishing an eligibility date that makes the new refinance program available for loans originated on or after Oct. 1, 2017.
The FHFA said that the choosing that eligibility date was “necessary to preserve the objectives of the Enterprises' credit risk transfer program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017.”
Under the new changes, the GSEs will “modify the structure of future risk-sharing transactions to accommodate the High LTV Streamlined Refinance program by allowing the newly refinanced loans to return to the reference pools in place of loans that prepaid,” the FHFA said.
According to the FHFA, this change “will help preserve credit loss protection on the loans without unwinding the protection paid for through CRT transactions.”
The FHFA added that the changes to the High LTV Streamlined Refinance program “appropriately balance continuing to offer assistance to underwater borrowers with protecting taxpayers.”
According to the FHFA, those changes make it necessary for HARP to continue.
“To ensure that high LTV borrowers who are eligible for HARP continue to have a refinance option, FHFA is also directing the Enterprises to extend HARP through Dec. 31, 2018,” the FHFA said.