Question by Dave T: Will the new HARP guidelines allow me to refinance?
I am current with my payments on my FHA mortgage, however it’s a rental property. I rent an apartment as my “primary residence”. Under the current guidelines, I’m not able to refinance since HARP excludes FHA loans that are rental properties and not “primary residences”.
With his recent State of the Union address, the President announced upcoming expansions to HARP. Has anyone heard of the details of this expansion? Will it allow someone in my situation – an FHA loan used as a rental property, to refinance?
Best answer:
Answer by Lisa L
I hope not. These programs are intended to be used for people needing help on their primary residences not to up the income for landlords.
Know better? Leave your own answer in the comments!
Oh, Obama is NOT going to expand anything to allow the small business owner to increase their profit.
The HARP programs are to help people keep their homes, not increase the profit we landlords make. Even as a landlord myself I would be opposed to using government resources for the purpose of increasing my net worth. Those resources are needed to help familes remain in their homes.
Current FHA guidelines will already allow you to do a no appraisal FHA Streamline refi on a home that was acquired as a primary residence but later became an investment property. They will finance the current balance only and will not allow you to increase the loan balance to include closing fees or prepaid tax and insurance. Your lender may be able to pay some or all of your fees in exchange for a slightly higher interest rate. A link to the HUD website confirming this is posted below:
http://portal.hud.gov/FHAFAQ/controllerServlet?method=showPopup&faqId=1-6KT-912
HARP will not apply to you. You may are probably eligible for an FHA Streamline Refinance. There are some differences between an owner occupied property and an investment though. The biggest is the limit of the amount you can finance. You will be limited to your current principle balance, while others may have the option of financing extras like HUD’s Mortgage Insurance premium and some accrued interest. The good news is that some lenders may be willing to pay some or all of those costs for you.
You will not need an appraisal for the program either. The only downside is that FHA’s monthly mortgage premiums may have increased since you bought the home. You can read more about that below.