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?

A: Unfortunately, HARP was never 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 program's guidelines, lenders are free to do their own "overlays" as to which programs and borrower-criteria they will write loans for. In this case, a streamline refinance through your servicer may not be 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

FHA-HAMP is a loan modification program for borrowers who are having trouble making the payments and can document their hardship. Since your loan is backed by the FHA, your mortgage should be eligible for the "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.

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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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