The Rules of Getting a HARP Refinance


The government’s Home Affordable Refinance Program (HARP) has helped millions of homeowners save money on their monthly mortgage payments, and it might help you, too — even if you owe more on your loan than your home is worth. But what if you have a “piggyback” loan — a second mortgage that you took out at the same time you bought your home?

Good news! Even with a piggyback loan, you may still save money by refinancing through HARP.

What is a piggyback mortgage?

Piggyback mortgages, also called second mortgages, are sometimes used by home buyers who don’t have the funds to make a large down payment and may want to avoid paying for private mortgage insurance (PMI). If you closed on a second mortgage at the same time you closed on your first mortgage and are currently paying on two mortgages for one home, you probably have a piggyback mortgage.

Your “first” mortgage is the primary mortgage on your home and likely is larger than your second mortgage.

It’s important to understand that your first and second mortgages are separate obligations, and only first mortgages are eligible for HARP.

Tale of 2 mortgages

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.

Your piggyback (or second) mortgage cannot be refinanced under HARP, and you cannot pay off your piggyback mortgage with funds from your HARP refinance. However, you can work with your current mortgage company, or another mortgage company, to refinance your piggyback mortgage at the same time that you complete a HARP refinance. Whether you decide to refinance your existing second mortgage or keep it as is when you refinance your first mortgage through HARP, your mortgage company will need to take steps to “subordinate” that second mortgage. That just means that your first mortgage obligation takes precedence over the second.

Is HARP right for you?

By taking advantage of today’s low interest rates, you may still save money on your monthly payments by refinancing your first mortgage through HARP. Your mortgage company can estimate what your new monthly payment would be with a HARP refinance.

To find out your HARP eligibility, contact your mortgage company. Be sure to mention that you have a piggyback (second) mortgage, so the lender can take any necessary steps to either “re-subordinate” your second mortgage or help you refinance your second mortgage at the same time you are refinancing under HARP.

Finally, if your mortgage company is unable to help you with a HARP refinance, ask another lender to assist you. Any lender participating in HARP may be able to help refinance a loan. A list of participating HARP lenders is available through

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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. 

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.