Second Mortgage? You Can Still Refinance With HARP


With mortgage rates remaining near historic lows, you may be able to save money on your monthly payments by refinancing — even if you a have second loan on your home.

Under the government’s Home Affordable Refinance Program (HARP), millions of homeowners, even those who owe more than their homes are worth, have been able to save money on their monthly mortgage payments. Find out if you can, too.

How can HARP help?

HARP gives eligible homeowners who may not qualify for traditional refinancing because of a decline in home value a way to refinance to a lower interest rate and/or more stable mortgage payment. It’s the only widely available refinance program that allows homeowners with little or no equity in their homes to take advantage of today’s lower interest rates. Even if you have a second loan on your home and think you won’t be eligible to refinance because you owe as much or more than your home is worth, HARP might be an option.

If you’ve made your mortgage payments on time, your first loan is owned by Fannie Mae or Freddie Mac, and you owe as much or more than your home is worth, you may be eligible for HARP refinancing.

If you are eligible to refinance through HARP, you’ll take out a new mortgage and use those funds to pay off your existing first mortgage and usually the closing costs for the new loan. It’s important to understand that your “first” and “second” mortgages are separate obligations, and only first mortgages are eligible for HARP refinancing. But, because lower monthly payments on your first mortgage may improve your likelihood to repay your second mortgage, your second mortgage lender may be willing to cooperate.

Next steps

When you’re ready to find out if HARP can help you save money every month:

  • First, find out whether Fannie Mae or Freddie Mac owns your loan by using the loan lookup tools on their sites.
  • Next, contact your first mortgage company and say that you’re interested in HARP. Be sure to mention that you have a second mortgage. Your mortgage company will need to take steps to either “re-subordinate” your second mortgage or help you refinance your second mortgage at the same time you are refinancing under HARP. Re-subordination just means that your new first mortgage obligation takes priority over the existing second.
  • Finally, if your mortgage company is unable to help you with a HARP refinance, ask another lender to help you. Any lender participating in HARP may be able to help refinance your loan. A list of participating HARP lenders is available at

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Robert Koller is a director in Fannie Mae’s Credit Risk Management division and is responsible for managing Fannie Mae’s Refi Plus™ Initiative, which includes the Home Affordable Refinance Program (HARP). Fannie Mae has helped almost 1.7 million homeowners take advantage of HARP since the program’s inception.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.