As a San Diego Mortgage Broker specializing in the HARP 2.0 Program, I have helped many owners of rental properties refinance and take advantage of the current historic low interest rates.
That’s right, the San Diego HARP 2.0 Refinance program, which allows homeowners to refinance when they owe more on their mortgage than their house is worth, is also available on investment properties.
As long as the current loan is a Fannie Mae or Freddie Mac loan that was originated before June 1st, 2009 you can use the San Diego HARP 2.0 Program to refinance investment properties. It does not matter if the home was an investment property at the time of the current loan or was a primary residence that has since been changed to an investment property. The property can also be a single family residence or a condominium.
The basics of the program are the same when you are refinancing an investment property with the San Diego HARP 2.0 program, with a few differences.
Fannie Mae
On Fannie Mae owned loans we are seeing approvals on rental properties at loan-to-values (LTVs) in the 125%-150% range and allowing debt to income ratios up to 60%. The LTVs are technically unlimited, but it is harder to receive an approval at LTVs above 150%. There is no cap on the CLTV, which comes into play if there is a second mortgage on the property.
Freddie Mac
Freddie Mac, on their Harp 2.0 program, is not approving many rental properties over 105% LTV and they are capping debt to income ratios at around 45% with some exceptions up to 50%.
Freddie Mac is also denying approvals when a client has credit card balances over 50% of their limit. You will also find that the interest rates on the Freddie Mac program are higher than the Fannie Mae due to fewer investors being willing to purchase the Freddie program.
I was recently able to get a Freddie Mac HARP refinance approved on a rental property with a 142% LTV, but this client had strong credit scores, assets, and income.
There are also many lenders who have implemented their own LTV caps on the San Diego HARP 2.0 Program when dealing with investment properties. Some have decided to make that cap 105%, others 125%. Many lenders have stated that they will only offer the San Diego HARP 2.0 Program on investment properties they currently are servicing. This is very common on the Freddie Mac HARP program.
Due to the fact that I am a San Diego Mortgage Broker, I have access to lenders that will offer unlimited LTVs on the San Diego HARP 2.0 on investment properties. This is contingent on receiving an approval through Fannie Mae’s and Freddie Mac’s automated underwriting programs. In addition, since we are approved with so many different lenders, we have a greater chance of being able to send the loan back to the current servicer if needed.
Examples of Recent HARP 2.0 Refinances on Rental Properties.
A home owner recently contacted me after trying to refinance his Freddie Mac rental property with 2 other lenders. He was denied each time. It took one of the lenders over 90 days just to let him know his loan was denied. His loan was a 98% LTV 30 year fixed on a rental property and he was self-employed. I was able to secure a rate of 4.125% and his loan closed in 60 days without needing an appraisal. He now is saving $448 per month!
Using the same Freddie Mac HARP 2.o program, I was able to help another client refinance his rental condo with a 105% LTV. I secured a rate of 4.125% on a 30 year fixed loan.
If you have any questions concerning the San Diego Harp 2.o Refinance on Investment properties or would like to receive a free quote, please feel free to contact me or complete the Rate Quote form HERE. Let’s start 2013 by helping you save thousands of dollars a year!