refinance 2nd mortgage under harp: how subordination and eligibility really work

What HARP meant for second liens

Many homeowners hoped to roll a HELOC or junior lien into a new HARP loan, but HARP only refinanced the first mortgage. The typical path was to keep the second in place and obtain a subordination so the new first lien remained senior after closing.

Key steps to prepare

Because the second lienholder must agree, timing and documentation matter. Lenders review your payment history, verify Fannie Mae or Freddie Mac ownership of the first, and calculate CLTV to confirm the new structure is sustainable.

• Request a subordination package early from the second-lien servicer.
• Confirm agency ownership and prior-sale date on the first mortgage.
• Compare interest savings against fees to find your break‑even.
• Ask about appraisal waivers and rate‑lock timelines.
• Keep on‑time payments; even one late can derail approval.

If you cannot obtain subordination, alternatives may include paying down the junior balance, modifying the second, or exploring successor programs to HARP. A seasoned loan officer can map options and sequence approvals so you close once-smoothly and on budget.