High LTV Refinance Option Program
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High LTV Refinance Option Program

Harry Jensen, Trusted Mortgage Expert with 45+ Years of Experience
, Trusted Mortgage Expert with 45+ Years of Experience
Edited by Michael Jensen

The High LTV Refinance Option is suspended as of May 2021. We recommend that you review our summary of Refinance Assistance Programs for other mortgage refinance options.

The High LTV Refinance Option Program enables you to refinance your mortgage even if your loan amount is greater than the value of your home. The program is called the “High LTV” option because it does not apply a maximum loan-to-value (LTV) ratio, which is the ratio of your loan amount to the fair market value of your property. This enables applicants with very high LTV ratios to refinance their mortgage when they otherwise could not.

The program is an alternative to the HARP 2.0 Program, which expired as of December 31, 2018, and is intended to assist people who are underwater on their mortgage refinance into more sustainable loans with more affordable payments. The program removes many of the qualification requirements that apply to regular refinance refinance programs, enabling more struggling homeowners to refinance their mortgage and stay in their homes.

Similar to the HARP 2.0 that came before it, the High LTV Refinance Option enables you to refinance your mortgage even if you are significantly underwater on your home. For example, if you owe $150,000 on your mortgage and your home is only worth $100,000 if can be impossible to refinance with a standard mortgage program. Borrowers in this scenario could use the High LTV Refinance Program to refinance their mortgage as long as they can afford the new payment and the refinance benefits the borrowers financially.

The program also enables you to qualify for a refinance without a minimum credit score, maximum debt-to-income ratio or appraisal report in many cases. Additionally, the program’s other flexible qualification requirements include relaxed income verification guidelines and not requiring borrowers to hold financial reserves at closing under most circumstances. In sum, the High LTV Refinance Program’s applicant-friendly eligibility guidelines make it an attractive financing option for people who cannot refinance with traditional mortgage programs.

How the High LTV Refinance Option Works

The first step with the program is to determine if your mortgage is eligible and if you qualify for the program. Unlike a regular mortgage refinance which focuses on your LTV ratio, credit score and debt-to-income ratio, the High LTV Refinance Option focuses more on your payment history and your ability to afford your new payment.

You apply for the High LTV Refinance Program through traditional lenders such as banks, mortgage banks, mortgage brokers and credit unions. As a starting point you can check with your current lender to determine if they offer the program but regardless of if they do you should contact multiple lenders to find lowest mortgage rate and closing costs.

The table below shows mortgage terms for leading refinance lenders. We recommend that you shop multiple lenders to determine if they offer the High LTV Refinance Option or similar programs. Comparing lenders and refinance proposals enables you to find the program and mortgage that are right for you.

Current Refinance Mortgage Rates in Ashburn, Virginia as of May 25, 2024
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Rate data provided by RateUpdate.com. Displayed by ICB, a division of Mortgage Research Center, NMLS #1907, Equal Housing Opportunity. Payments do not include taxes, insurance premiums or private mortgage insurance if applicable. Actual payments will be greater with taxes and insurance included. Read through our lender table disclaimer for more information on rates and product details.
High LTV Refinance Option Considerations
  • No maximum LTV ratio enables you to refinance an underwater loan
  • No minimum credit score or maximum debt-to-income ratio in most cases
  • Appraisal report may not be required
  • Simplified income and employment verification
  • Higher mortgage limits in certain counties
  • All property types are eligible
  • Fannie Mae must own your loan
  • Mortgage must be current
  • Relatively strict mortgage eligibility guidelines
High LTV Refinance Option Eligibility Requirements

We review the key program eligibility guidelines below. The most important step is to determine if your loan is eligible for the program.

Fannie Mae Must Own Your Loan

To be eligible for the High LTV Refinance Option, your mortgage must be owned Fannie Mae, which is one of the two largest government-sponsored enterprises (GSEs) that provide capital to and buy mortgages from lenders. When HARP 2.0 expired at the end of 2019, Fannie Mae and Freddie Mac, the other large GSE in the mortgage industry, both introduced their own distressed refinance programs (Freddie Mac offers the Enhanced Relief Refinance Program).

You do not obtain your mortgage directly from Fannie Mae but in many cases your mortgage is sold to them and you continue to make your payment to your original lender. So even if you make your monthly payment to Quicken Loans or Citibank there is a good chance that your mortgage may actually be owned or secured by Fannie Mae. In fact, no one actually makes their mortgage payment to Fannie Mae so do not think that prevents you from using the High LTV Refinance Option. You can use Fannie Mae's loan look-up tool to determine if they own your mortgage.

Borrower Benefit

A High LTV Refinance Option mortgage must offer the borrower at least one of the following benefits:

Original Mortgage Closing Date

Your original mortgage must have closed on or after October 1, 2017. So as long as your mortgage closed after October 1, 2017 you are eligible for the High LTV Refinance Program.

Loan Cannot Be a HARP Loan

You cannot use the High LTV Refinance Option to refinance a HARP mortgage. If you modified your existing mortgage with another loan modification or refinance assistance program you may be eligible for the program.

Mortgage Seasoning

Mortgage Seasoning basically means how old your loan is and your loan must be seasoned for at least 15 months to be eligible for the program. In short your mortgage or refinance must have closed at least 15 months before you apply for an High LTV Refinance Option.

Mortgage Status

To qualify for the program borrowers must be current on their loan and not delinquent.

Payment History

Borrowers cannot have any missed mortgage payments within the past six months and no more than one 30 day late payment in the past twelve months.

Repeat Program Usage

Applicants can use the High LTV Refinance Option multiple times as long as they meet program requirements.

High LTV Refinance Option Borrower Qualification Guidelines

We outline borrower qualification requirements for the High LTV Refinance Program below. Review this information to determine if you qualify.

Loan-to-Value (LTV) Ratio

The High LTV Refinance Program does not apply a maximum loan-to-value (LTV) ratio which makes it especially applicable for home owners who are underwater on their mortgage. The no LTV ratio guideline only applies if you refinance with a fixed rate mortgage. The maximum LTV ratio if you refinance into an adjustable rate mortgage (ARM) is 105%.

While the High LTV Refinance Option does not apply a maximum LTV ratio for most applicants, it does use a minimum LTV ratio. The program is designed for underwater or struggling applicants rather than borrowers with significant homeowners equity. As outlined in the table below the minimum LTV ratio varies by property type and the number of units in the property.

Residence Type
Number of Units
Minimum LTV Ratio
Primary Residence
  • One unit
  • 97.01%
  • Two units
  • 85.01%
  • Three and four units
  • 75.01%
Second Home
  • One unit
  • 90.01%
Investment Property
  • One to four units
  • 75.01%

Appraisal Report Requirement

Because the High LTV Refinance Option Program does not use a maximum LTV ratio, lenders may not require an appraisal report, which saves you money on closing costs and may also accelerate the refinance process.

Please note that Fannie Mae’s underwriting system may require lenders to order an appraisal report in certain cases and some lenders may be required to order an appraisal to meet internal or regulatory guidelines. We recommend that you to check with your lender to do determine if you need an appraisal report before you apply for the program.

Applicant Credit Score

The High LTV Refinance Option does not require a minimum credit score for most applicants but the lender is required to pull your credit report to check for late payments and to determine your mortgage terms.

Applicant Debt-to-Income Ratio

The program does not apply a maximum borrower debt-to-income ratio for most borrowers which makes it ideal if your monthly income decreased or debt expense increased since you obtained your original loan. Your debt-to-income ratio represents the maximum amount of your monthly gross income that you can spend on your mortgage payment, property tax, hazard insurance and other debt expenses including credit cards and car, student and personal loans. Not applying a maximum debt-to-income ratio makes it easier to qualify for the High LTV Refinance Option Program.

Borrower Income Verification

Program guidelines require lenders to obtain a verbal verification of your employment to confirm your income although they do not need to demonstrate that your income is expected to continue in the future, which simplifies the program’s documentation requirements.

Employment History Requirement

Borrowers are not required to have a two year employment history to be eligible for the program.

Borrower Income Limit

Unlike some other refinance assistance or loan modification programs, the High LTV Refinance Option does not apply borrower income limits.

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Other Program Requirements

Mortgage Program

Fixed rate mortgages and adjustable rate mortgages (ARMs) with at least an initial five year fixed rate period (such as a 5/1 ARM) are eligible for the High LTV Refinance Program (assuming your original mortgage was an ARM). Interest only mortgages are not permitting according to program guidelines.

Mortgage Limits

The High LTV Refinance Program applies conforming loan limits, which vary by county and the number of units in a property. The conforming loan limit in the contiguous United States for a single unit property ranges from $726,200 to $1,089,300 in higher cost counties. For a four unit property, the conforming mortgage limit ranges from $1,396,800 to $2,095,200. In Alaska, Hawaii, Guam and the U.S. Virgin Islands the loan limit is $1,089,300 for a single unit property.

Type of Refinance

The High LTV Refinance Option only permits rate and term refinances which means that the only terms of your mortgage that can change are your program, interest rate and loan length. In most cases program participants lower their interest rate but keep their loan length the same with their new mortgage. You can also finance up to $5,000 in closing fees in your mortgage amount and take out a maximum of $250 in loan proceeds. Cash-out refinances are not permitted according to program guidelines.

Property Eligibility

One-to-four unit owner occupied and investment properties are eligible for the program. Single unit second or vacation homes are also eligible. The occupancy classification for your new mortgage does not need to be the same as your old mortgage. For example you can refinance an investment property loan into an owner-occupied mortgage.

Prepayment Penalty

Your original mortgage may have a prepayment penalty if you refinance with the program but your new mortgage cannot have a prepayment penalty.

No Waiting Periods Following Derogatory Credit Events

The High LTV Refinance Option does not require waiting periods after derogatory credit events such a bankruptcy, foreclosure or default before you can use the program.

Use the FREEandCLEAR Lender Directory to search for mortgage refinance assistance programs offered by leading lenders in your area.


Program Costs and Fees

Mortgage Rate

In general, the interest rate for a High LTV Refinance mortgage is higher than the rate for a standard refinance. Mortgage rates vary by lender, applicant and other factors so you should shop multiple lenders to find the loan with the lowest rate and costs.

Closing Costs

You are required to pay standard lender fees and closing costs. Total closing costs for the High LTV Refinance Program are similar to a regular refinance and may be lower if you are not required to obtain an appraisal report. Additionally, applicants should not be required to pay any extra costs to apply for the program. If a lender attempts to charge you additional fees to use or apply for the program you should work with a different lender.

Lender Assistance

Lenders are allowed to provide applicants $500 to help pay for closing costs or other transaction expenses and up to $2,000 to reduce the borrower’s mortgage balance.

Private Mortgage Insurance (PMI)

According to High LTV Refinance Program guidelines, if your existing mortgage has private mortgage insurance (PMI), you are required to have the same level of PMI coverage on your new new loan. If your existing mortgage does not have PMI, then you are not required to pay PMI on your new loan, even if your new LTV ratio exceeds 80%. Please note that the program does not allow you to change from lender-paid PMI to borrower-paid PMI when you refinance.

Program End Date

The High LTV Refinance Program currently has no expiration date.

Related FREEandCLEAR Resources


"High LTV Refinance Option."  Mortgage Products.  Fannie Mae, 2020.  Web.

About the author
Harry Jensen, Mortgage Expert

Harry is the co-founder of FREEandCLEAR. He is a mortgage expert with over 45 years of industry experience. Over his career, Harry has closed thousands of loans for satisfied borrowers and now offers his advice and insights on FREEandCLEAR.  Harry is a licensed mortgage professional (NMLS #236752). More about Harry

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