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Alternatives to HARP for Citibank Mortgage Customers: Navigating Refinance Options Now That HARP Has Ended

Introduction
The Home Affordable Refinance Program (HARP) was a lifeline for many homeowners underwater on their mortgages, allowing refinancing up to high loan‐to‐value (LTV) ratios at competitive rates. Since HARP’s expiration in 2018, borrowers seeking to refinance with high LTVs have needed new options. This article explores practical alternatives for Citibank mortgage customers, including Freddie Mac and Fannie Mae conventional programs, FHA-insured refinances, VA’s IRRRL, and Citibank’s proprietary solutions. By understanding eligibility criteria, benefits, and limitations, you can determine the best path to lower your rate, reduce monthly payments, or access home equity—even without HARP.

1. Why HARP Is No Longer Available—and What That Means

  • HARP Overview: Launched in 2009, HARP allowed borrowers with Fannie Mae- or Freddie Mac-owned mortgages to refinance up to 125% LTV, despite home values falling below loan balances.
  • Program Sunset: HARP closed on December 31, 2018, as most loans had performed well, and other refinance options emerged. Citibank no longer processes HARP applications.
  • Impact on Homeowners: Underwater borrowers (with LTV > 80%) can no longer use HARP’s streamlined process. They must pivot to alternative refinance or modification programs that allow high LTV refinancing.

2. Conventional High-LTV Refinance Options (Freddie Mac & Fannie Mae)

A. Fannie Mae High LTV Refinance Option (HIRO)

  • Purpose: Replaces HARP for borrowers with Fannie Mae mortgages who have LTV up to 97%.
  • Eligibility:
    1. Original mortgage must be owned/guaranteed by Fannie Mae.
    2. Borrower’s current unpaid principal balance must be ≤ 97% of the home’s current “as-completed” or “as-is” appraised value.
    3. Must be current on payments—not more than one 30-day delinquency in the past 12 months and no 60+ days delinquent in 24 months.
    4. No cash-out is allowed; proceeds limited to payoff of existing first mortgage and financing up to $5,000 in closing costs.
  • Benefits:
    • No lender-paid mortgage insurance (borrower-paid MI required when LTV > 80%).
    • Standard closing costs apply, but no appraisal required if property is already in Fannie Mae’s automated collateral valuation system (ACV).
    • Rate/term refinances only—no cash-out.

B. Freddie Mac Enhanced Relief Refinance Mortgage (ERRM)

  • Purpose: Serves Freddie Mac borrowers with LTV up to 97% who cannot use traditional refinances.
  • Eligibility:
    1. Existing loan must be owned or securitized by Freddie Mac.
    2. Must be current—no 60+-day delinquency in the past 12 months (some flexibility if seasoned).
    3. Maximum refinance amount (including closing costs and prepaids) is 97% of the lesser of current appraised value or HPI-adjusted original purchase price.
    4. No cash-out permitted; the loan proceeds go toward payoff of existing first mortgage and required closing costs/reserves.
  • Benefits:
    • No lender documentation of income or assets is required beyond standard application data, if using Freddie Mac’s automated underwriting system (AU).
    • No appraisal required if the automated collateral valuation (ACV) provides an adequate value.
    • Limited closing costs; no property improvement or cash withdrawal beyond permissible exceptions (e.g., minor repairs).

3. FHA-Insured Streamline Refinance (FHA-SF)

A. Overview

  • Purpose: Allows homeowners with existing FHA-insured mortgages to refinance at lower rates with minimal documentation.
  • Eligibility:
    1. Must have an FHA-insured first mortgage for at least 210 days and at least six on-time payments.
    2. The refinance must lower the borrower’s monthly principal and interest payment by ≥ 5% (or meet net tangible benefit criteria).
    3. No cash-out is allowed; only finance existing principal balance, interest, mortgage insurance premium (MIP), and allowable closing costs.
    4. No credit score requirement or income verification is necessary if using the Streamline program.
  • Benefits:
    • No appraisal required if the Home Value Certificate (HVC) is acceptable—saves time and cost.
    • No debt-to-income ratio check or verification of income/assets.
    • MIP rate for new FHA loans is typically lower than existing rate if closing after June 1, 2024 (0.45% vs. 0.55% on standard loans).
    • Unlimited LTV (up to 97.75%)—very helpful if your LTV is well above 80%.

4. VA Interest Rate Reduction Refinance Loan (IRRRL)

A. Overview

  • Purpose: Enables eligible veterans, active-duty service members, and surviving spouses with a VA-guaranteed loan to refinance to a lower interest rate or convert from adjustable-rate to fixed-rate mortgage.
  • Eligibility:
    1. Must have an existing VA-guaranteed mortgage; the new IRRRL must be used to refinance that VA-loan only.
    2. Must be current on existing mortgage—either not more than one 30-day late payment in the past 12 months or in compliance with a loan workout plan for the last three months.
    3. No cash-out provision (exceptions for up to $6,000 in energy improvements).
    4. Must certify a benefit (net tangible benefit requirement) like lowering interest rate or switching loan term.
  • Benefits:
    • No appraisal required in most cases—expedites closing.
    • No income or asset documentation required if refinancing the same property and following VA guidelines.
    • Up to 100% financing of closing costs rolled into the new loan—or paid with funds outside the loan.
    • VA funding fee is reduced (0.50%) if refinancing a prior VA loan into a new VA loan.

5. Citibank Proprietary Portfolio Options

If you don’t meet government-backed program requirements or already refinanced once under FHA or VA rules, Citibank offers portfolio refinance solutions:

A. Citibank High-LTV Portfolio Refinance

  • Who It Serves: Borrowers with Citibank aggregate LTV over 80% and conventional or non-QM loans not eligible for Freddie/Fannie or FHA/VA.
  • Key Features:
    1. LTV up to 95% or more (depending on credit profile and program seasoning).
    2. Customized underwriting—considering factors such as significant home-equity shortfall, debt-to-income exceptions, or recently extended loans.
    3. Rate/term refinance or limited cash-out up to 10% (subject to investor and regulatory guidelines).
    4. Flexible credit-score overlays—Citibank may accept scores down to the low 600s if compensating factors exist (stable employment, reserves, etc.).
    5. Full income/asset documentation required for standard program; “no income stated” options available for select qualified borrowers (e.g., self-employed with high reserves).
  • Benefits:
    • Closed-end financing to pay off existing obligations (first and second liens, mortgage insurance); remove mortgage insurance for high LTV if enough equity is present.
    • Competitive pricing grid for borrowers with strong payment history despite high LTV.
    • Option to finance up to 3% of loan amount in closing costs, reducing cash-to-close burden.

B. Citibank’s Mortgage Modification & Forbearance Programs

  • Who It Serves: Homeowners facing temporary hardship (job loss, medical issues) and risk of default.
  • Key Features:
    1. COVID-19 Forbearance: Temporary reduction or suspension of payments; deferred principal to loan maturity or a repayment plan.
    2. Streamlined Modification: Lowering interest rate, extending term, or capitalizing arrears to bring payments back to affordable levels—available even if LTV is high.
    3. Long-Term Payment Plan: For borrowers unable to qualify for refinance, Citibank offers a payment plan to catch up past-due amounts over 3–12 months with reduced fees.
  • Benefits:
    • Avoid foreclosure by creating sustainable payment schedules.
    • Modification does not change first-lien status or require new appraisal—limited underwriting.
    • Eligibility based on hardship and ability to resume regular payments; no LTV cap for modification programs.

6. How to Determine the Right Option for You

  1. Assess Your Current Mortgage Type
    • Fannie Mae/Freddie Mac Conventional: Check if you meet HIRO or ERRM criteria.
    • FHA Loan: Explore FHA-SF for streamlined refinance.
    • VA Loan: Use VA’s IRRRL for minimal-paperwork streamlines.
    • Other/Portfolio Loan: Consult Citibank’s portfolio underwriting or modification teams.
  2. Calculate LTV & Equity Position
    • Obtain a current appraisal or property-valuation estimate. Determine your LTV (loan balance ÷ home value).
    • If LTV ≤ 97% and you have a Fannie/Freddie mortgage, HIRO/ERRM may be ideal. If your LTV is higher (but you have FHA), FHA-SF can go to 97.75%. If VA, IRRRL has no LTV limit.
  3. Review Credit Score & Payment History
    • Conventional refinances generally require a 620+ FICO® score; FHA-SF and VA IRRRL have more lenient scoring.
    • Program-specific delinquency allowances apply: FHA-SF requires six on-time payments; VA IRRRL allows one 30-day late.
  4. Compare Interest Rates & Costs
    • Use Citibank’s online rate-quote tool to compare conventional-vs. FHA-vs. VA IRRRL rates.
    • Factor in mortgage insurance costs (PMI vs. FHA MIP vs. VA funding fee).
  5. Understand Timing & Documentation
    • Conventional HIRO/ERRM: May require limited or no appraisal if home value is in automated valuation system.
    • FHA-SF & VA IRRRL: Often require no appraisal and minimal documentation.
    • Citibank Portfolio Refi: Requires full income/asset documentation unless a no-doc program applies; plan for longer processing times (30–45 days).

7. Citibank Application Process for Non-HARP Refinances

A. Pre-Qualification & Program Review

  1. Contact Citibank Mortgage Services via citi.com/mortgages or call 1-800-248-4638 to speak with a home-loan consultant.
  2. Provide basic details: mortgage type, current balance, credit score, approximate home value, and reason for refinance.
  3. Citibank’s consultant will identify which program(s) you qualify for (HIRO, ERRM, FHA-SF, VA IRRRL, or portfolio).

B. Submit the Refinance Application

  1. Complete a Digital Application in Citibank’s secure portal.
  2. Upload Required Documents:
    • W-2s and pay stubs (last 30 days), 2 years’ tax returns if self-employed.
    • Bank and investment account statements (last 2–3 months).
    • Mortgage statement for existing loan.
    • Homebuyer education certificate (for HomeReady®) or hardship letter for modifications.
  3. Appraisal or Valuation (if needed): Citibank orders an appraisal or uses an automated valuation for conventional programs.
  4. Lock Your Rate: Choose a lock period (30–60 days) based on market outlook; Citibank confirms the locked interest rate in writing.

C. Underwriting & Conditional Approval

  1. Citibank’s underwriting team reviews your loan file—credit, income, assets, appraisal.
  2. You receive a conditional approval letter listing any outstanding items (e.g., explanation of large deposits, gift-letter form).
  3. Provide additional documentation promptly to clear conditions and finalize underwriting.

D. Closing & Funding

  1. Closing Disclosure (CD): At least 3 business days before closing, Citibank delivers a CD outlining final loan terms, closing costs, and cash-to-close amount.
  2. Final Walk-Through (If Purchase): Not applicable for refinance.
  3. Closing Appointment: Sign documents—either electronically or at a title agent/attorney’s office.
  4. Funding Date: Citibank sends payoff funds to your existing servicer; your new loan begins on the next business day.

8. Frequently Asked Questions (FAQs)

Q1: Can I refinance if I’ve already refinanced my mortgage once?

  • Yes. HARP was limited to two refinances, but conventional, FHA, and VA refinance guidelines allow multiple refinances over time—subject to seasoning (e.g., your current mortgage must be at least 210 days old).

Q2: Will refinancing reset my interest-rate lock clock?

  • No. When you lock a rate for your new program, it applies until closing or until the lock expires. If you switch from HARP to HIRO/ERRM, you’ll lock a new rate for your chosen program after application.

Q3: What if my home value has declined significantly?

  • For conventional HIRO/ERRM refinances, your current LTV must be ≤ 97%. If LTV > 97% but you have an FHA-insured mortgage, FHA-SF allows up to a 97.75% LTV. If neither applies, Citibank’s portfolio program or modification may be your path forward.

Q4: How does mortgage insurance compare across programs?

  • HIRO/ERRM: Requires borrower-paid PMI at standard rates, canceled at 20% equity.
  • FHA-SF: Carries FHA’s upfront and annual MIP—cannot be canceled if original LTV > 90%; otherwise, possible after 11 years.
  • VA IRRRL: Funding fee is 0.50%, no monthly MIP—most cost-effective for eligible veterans.
  • Portfolio: PMI requirements vary by program but often require higher coverage at high LTVs until equity reaches 20%.

9. Tips for a Successful Post-HARP Refinance

  1. Monitor Market Conditions
    • Interest rates fluctuate daily. Use Citibank’s rate-lock tool to secure a competitive rate once pre-qualified.
  2. Boost Credit Score Early
    • Improve your FICO® score by paying down revolving debt and avoiding new credit inquiries for 3–6 months prior to application.
  3. Document Everything
    • Collect pay stubs, tax returns, bank statements, and any gift-letter evidence (if applicable) before applying to avoid last-minute delays.
  4. Gather Multiple Program Quotes
    • Ask Citibank to provide rate comparisons for conventional (HIRO/ERRM), FHA-SF, and portfolio options to identify the most cost-effective path.
  5. Consider Timing
    • If your existing mortgage has a prepayment penalty, model whether the interest savings outweigh the penalty.
  6. Explore Seller-Paid Closing Costs
    • In a purchase scenario (not a refinance), negotiate for the seller to pay up to 3% of the purchase price toward closing costs under conventional programs like HomeReady®—decluttering your cash-to-close needs.

10. Conclusion

Although HARP’s sunset removed a popular high-LTV refinance avenue, Citibank customers still have robust alternatives:

  • Fannie Mae’s HIRO for borrowers with conforming, high-LTV conventional loans (≤ 97% LTV).
  • Freddie Mac’s ERRM for similar Freddie Mac portfolios (≤ 97% LTV).
  • FHA Streamline (FHA-SF) for FHA borrowers (≤ 97.75% LTV) with minimal documentation.
  • VA IRRRL for eligible veterans and service members seeking quick, low-cost refinancing.
  • Citibank Portfolio & Modification Programs for borrowers outside government program criteria or needing tailored underwriting.

By evaluating your current loan type, LTV, credit profile, and long-term goals, you can choose the best alternative to HARP. Whether your priority is the lowest possible rate, minimal documentation, or the ability to refinance a loan not owned by Fannie Mae/Freddie Mac, Citibank’s comprehensive suite of refinance and modification options ensures there’s a path forward—no HARP required.

Ready to explore your post-HARP refinance options? Visit citi.com/mortgages or call 1-800-248-4638 to connect with a dedicated Citibank mortgage specialist who can guide you to the right solution for your circumstances.

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