For those homeowners who own an investment property ( 1 to 4 unit residential properties ) and have mortgages that are higher than the value of the property, there is hope as long as you have a Fannie Mae or Freddie Mac loan.
Underwater Mortgage on your Investment Property
Many homeowners believe that the government’s HARP program only applies to owner occupied residential properties. Good news is that the HARP program also applies to second homes and investment properties that are under 4 units. Many mortgage companies can help you refinance your investment properties even if your mortgage is higher than the value of your investment property. Many lenders do have a limit on how much underwater you are. The majority of Illinois mortgage companies and Florida mortgage companies have a maximum loan to value ratio of 125% cap on the amount they will lend. The good news is that I can help a mortgage loan borrower who has unlimited loan to value ratios. As long as your loan was sold to Fannie Mae or Freddie Mac prior to June 1, 2009, I can help those homeowners who have loan to value ratios of 200% loan to value or more.
Home Affordable Refinance Program on Investment Property
Lets take an example. Say you purchased an investment property back in 2005 for $400,000 and your first mortgage is $300,000 and you have a second mortgage of $50,000. Your investment property is now worth $200,000. Lets say that you still owe $300,000 and your second mortgage is $50,000. Your loan to value is the first mortgage of $300,000 plus your second mortgage of $50,000 divided by $200,000, which yields $175% loan to value. Can you refinance because you have a second mortgage? As long as your investment property has been sold to Fannie Mae or Freddie Mac prior to June of 2009, you can definitely get it refinanced via the HARP program. You need to consult a mortgage company that specializes in unlimited loan to value HARP mortgage loans. The way this type of underwater mortgage refinancing works is by subordinating the second mortgage and refinancing the first. The second mortgage will still be in effect and the first mortgage is the only mortgage that can be refinanced.
HARP for Investment Property
For those whose investment mortgage loan has not been sold to Fannie Mae or Freddie Mac or who do not have Fannie Mae or Freddie Mac loans, good news is that the HARP 3.0 program will be launched this year where every mortgage loan holder qualifies.