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Mortgage rates are down! It may be a good time to refinance, or learn the income you need to buy a median-priced home in the top 50 metro areas!

Mortgage rates are down! It may be a good time to refinance, or learn the income you need to buy a median-priced home in the top 50 metro areas!

Can I refinance an FHA second property through HARP?

Q: I've been trying to refinance an FHA mortgage. My mortgage Servicer is Ocwen. The home is not my primary residence and I currently have it rented out to an elderly couple. Do I have any options at all with HARP or HAMP?

A: Unfortunately, neither HARP or HAMP are available for FHA loans. Although it's not readily clear why you are having trouble, the FHA streamline refinance program is available for investment properties.

You should know, however, that while the FHA sets the guidelines, lenders are free to do their own "overlays" as to which programs and borrower-criteria they will write loans for. In your case, Ocwen won't do a non-owner-occupied (investment) streamline refinance. A little sleuthing unearthed this document (updated August 02, 2016): 

http://ocwenfunding.com/PDF%20Files/Matrix/MX%20-%20CS%20FHA%20Fixed%20Streamlines.pdf

According to this document, the occupancy rules for streamline refinances are "Must be Owner-Occupied. Borrowers must provide evidence that subject is their primary residence."

So a streamline refinance through your servicer isn't an avenue that's open to you.

Other options

Streamline refinances are most often done by the lender who services your loan. However, if you don't need a streamline refinance (and it's not clear that you do), you can certainly talk to other FHA mortgage lenders about a traditional refinance -- an FHA-to-FHA arrangement. Not all lenders will refinance investment properties, so you'll likely have to shop around.

FHA-HAMP

HAMP is a loan modification program for Fannie Mae and Freddie Mac-backed or owned mortgage loans, where borrowers are having trouble making the payments and can document their hardship. Since your loan is backed by the FHA, your mortgage isn't eligible for HAMP. However, the FHA runs its own "FHA-HAMP" program for troubled borrowers.

And finally for the record, HARP is a refinance program for Fannie and Freddie-backed loans, so your FHA loan wouldn't be eligible.

Ask the expert
Keith Gumbinger
Keith Gumbinger
Mortgage Expert
Vice President, HSH.com
About Keith: Mortgage market observer and analyst with 35 years experience... (more)
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