Unlike the Home Affordable Modification Program (HAMP), which assists homeowners who are in danger of foreclosure, this program benefits homeowners whose mortgage payments are current, but who cannot refinance due to dropping home prices in the wake of the U.S. housing market correction.
In December 2011, the rule was changed yet again, creating what is referred to as "HARP 2.0"; there would no longer be any limit on negative equity for mortgages up to 30 years – so even those owing more than 125% of their home value could refinance without PMI.
PMI hedged the risk brought by the high loan-to-value ratio by offering insurance against foreclosure for whoever owned the "whole loan".
HARP 2.0 refinancing is allowed on all occupancy types: primary residence (owner-occupied), second home, or investment (rental) property.
Another feature of HARP is that applicants can forgo a home appraisal if a reliable automated valuation model is available in the area.
[7] As part of the 2012 State of the Union Address, President Barack Obama referenced a plan to give "every responsible homeowner the chance to save about $3,000 a year on their mortgage".
[8] Although the HARP program was originally scheduled to end on December 31, 2016, the Federal Housing Agency announced in August 2016 that it would be extended though September 2017.