The Home Affordable Refinance Program, often abbreviated as HARP, provides mortgage refinancing assistance for homeowners who can't refinance traditionally because of a high loan-to-value ratio on their properties. When a homeowner owes more than a property is worth, he or she can take advantage of HARP to refinance. The program's requirements were lowered in 2011 in an attempt to help struggling homeowners lower their bills and switch from unstable mortgages to stable mortgages.

Homeowners need to fulfill a number of requirements in order to seek mortgage refinancing under HARP. The program only applies to primary residences, so it can't be used on vacation homes or any other properties where the homeowner doesn't reside. HARP also only applies to Fannie Mae and Freddie Mac loans. As most home loans in the United States are handled by one of these two institutions, most homeowners won't be disqualified for HARP by this requirement alone.

HARP is also intended for homeowners who are struggling, but who haven't missed any mortgage payments in the previous year. A single late payment could prevent a homeowner from refinancing through HARP for six months to a year. The loan-to-value of the mortgage must also be greater than 80 percent. Alternately, the loan might be unstable. Adjustable rate mortgages are considered unstable and a move from an adjustable rate mortgage to a fixed rate mortgage might be supported under HARP. Homeowners also have to submit answers to a questionnaire provided through the program. Answers are evaluated to determine eligibility and proof of income will be required. The requirements for income and loan-to-value are significantly looser than the requirements for HARP mortgage refinancing prior to 2011.

If approved, mortgages refinanced under HARP are treated the same as any other type of mortgage. Homeowners are expected to stay current with payments, which are typically lower due to lower loan mortgage rates. The homeowner's HARP eligibility can technically have a negative effect on his or her credit score, although this is rare.

Typically, there are no real negatives other than the requirements of the program and the application process itself. HARP offers a convenient opportunity to refinance outside of the underwriting guidelines that lenders use to evaluate eligibility for standard refinanced mortgages. HARP can help homeowners with underwater properties take advantage of low loan mortgage rates, potentially leading to significant savings.