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Can I Refinance My 2nd Home Under HARP?

Fannie Mae and Freddie Mac clarified that borrowers can use the HARP 2.0 to refinance second homes and investment properties. Most people already knew that HARP mortgage lenders were allowed to offer refinances on primary residences but few borrowers were aware that the Home Affordable Refinance could be accessed for rental and vacation homes. Yes, HARP loans can be used to refinance second houses and in some cases of investment homes as well.

Refinance Vacation Homes Even if They Are Underwater

The “HARP 2.0″ changes that took full effect last spring greatly expanded the eligibility guidelines for mortgages that could be refinanced under the program. The most prominent of those was lifting a negative equity restriction so that lenders could offer HARP refinance loans no matter of how far upside-down they were. However, there were a number of other changes as well, and expanding eligibility to vacation homes and investment properties was one of them.

Condos Approved for HARP Refinancing

According to MortgageLoan.com, qualifying with a vacation or 2nd house must be a single unit, although condominium units are eligible as well. Investment homes can be from one to four units and it is not necessary for the applicant to be living in the property. It also doesn’t matter if one of the homes used to be a primary residence, but is now a second home or investment property. You still have to meet the other HARP refinance standards, the main one being that the mortgage must be backed by either Fannie Mae or Freddie Mac. You also have to meet the usual credit and income criteria – including being able to show two months of liquid reserves if refinancing an owner-occupied home and six months of reserves for an investment property. Other than that, it doesn’t matter how much the property may have fallen in value, as long as you’ve remained current on your mortgage payments. Your loan balance can be twice as much as the property is worth and you can still qualify. In fact, appraisals are not even required in most cases under HARP 2.0.

Mortgage Refinancing Approved for More Than One Home

One question that some have is whether they can do a HARP refinance on a second home or vacation property if they have already gone through HARP to refinance their primary residence.  Yes, the only restriction of this type is that the mortgage must have been closed by May 31, 2009, which basically limits you to one HARP refinance per property. You are not limited to refinancing with your current loan service company, but refinancing with any HARP lender is allowed. Some consumers who have mortgage insurance may find it difficult to find a new lender who will accept that insurer, so your HARP lender options may be more limited in that situation. Read the original article in the New Jersey Post.



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