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Using HARP on Second Homes or Investment Properties

Using HARP on Second Homes or Investment Properties

Did you know that today, one in six HARP refinances are for a second home or investment property?

According to information from the Federal Housing Finance Agency, the popular Home Affordable Refinancing Program, which is geared toward borrowers with negative equity, has helped roughly 2.9 million homeowners refinance their properties since its inception in 2009. However, HARP refinancing used to be fairly restrictive, only allowing for the refinance of an owner’s primary residence. This has since changed, and HARP is now available for properties that serve as rental homes, vacation homes or other types of residential investments.

This can be especially valuable for homeowners in unique situations. For instance, if you’ve had to turn your home into an unexpected rental due to an unplanned move and low market values, HARP refinancing may be able to help ease the burden. Regardless of the reason for your owning investment property, you should consider looking into the HARP program if you’re having trouble with refinancing through traditional methods.

When it doesn’t make sense to sell and you don’t have enough equity to refinance, HARP can be a terrific solution. It allows homeowners who owe more on their homes than they are worth to secure a lower interest rate through refinancing. However, there are still certain restrictions that apply.

Despite the fact that HARP has gone through several changes and has opened up for more and more people, the following basic qualifications must still be met in order to be approved for HARP refinancing:

  • Your mortgage must be backed by Fannie Mae or Freddie Mac and acquired before June 1, 2009.
  • You must be current on your payments (no payments made later than 30 days) in the past six months. You may have no more than one late payment in the past 12 months.
  • Your loan-to-value ratio must be greater than 80 percent.

The specific requirements for getting HARP for a second/investment home are as follows:

  • For a second home, it must be a single unit or condo.
  • For an investment property, it must be a 1- to 4-unit home.

For more information on HARP refinancing, please contact a mortgage professional at eLEND or visit the official HARP program page

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