We are having a lot of luck getting homeowners who are under water on their mortgages approved to refinance under the HARP 2 refinance program. Since the program opened on March 19, 2012, my team has 82 pre-approved homeowners, just waiting on a final approval from our underwriters.
Primary residences and second homes are nearly unlimited Loan to Value (we have a cap of 150% LTV, which covers all but two so far that I have reviewed).
Investment properties with loans owned by Fannie Mae and Freddie Mac are a bit different. We are loaning up to 105% of the value; which is 30% more than the conventional cap of 75% LTV for investment properties.
But wait! HARP 2 is no supposed to require an appraisal, right?
Well, right. Often times.
We are getting appraisal waivers about 60% of the time, meaning that Fannie Mae and Freddie Mac tell us that they have enough information in their system to not require an appraisal.
However, Freddie does come up with a value based on that information, which is similar to loan to value that zillow.com or other such sites will issue. Not always accurate as an appraisal, but still a number to calculate an LTV.
Fannie Mae has no value – currently – they are just issuing appraisal waivers. However, on April 28 they will be changing that and now issuing a value along with the appraisal waiver.
So, that means that on investment property – appraisal waiver or not – you will have a value either issued or appraised and you will be limited to 105%.
Often, with 30 year fixed rates on this program in the low-to-mid 4′s, even if the 105% cap means you have to bring some cash to pay down the principle balance, a ‘cash in’ refinance, your cash flow will work much better and therefore your ROI on that investment property will increase.
So, if you would like a Free Quote on a HARP 2 Refinance, click here. Or, call me at 1-800-MY-LOANS.