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Can I Freddie Mac Open Access HARP Refi from Primary to Investment?

I am trying to find out if I can do this, since Wells Fargo, my servicer has said they cannot.

I have a Freddie backed mortgage that I am looking to refi. I'm currently at 30 year fixed 5.375%, looking to go to a 15 year fixed. I think I'm sitting right around 90% LTV and I have no second loan. I am interested in doing HARP so I could prevent having PMI, since I don't currently have PMI on my loan.

The kicker and the reason I haven't done this yet is that I am and have been shopping for a new home to purchase. I don't want to refinance my existing property as owner occupied and then my understanding is that would disqualify me from getting a new owner occupied loan (on a potential new home) for 12 months. I don't want to do that in case I do find a home I want to purchase in the next 12 months.

I'm trying to find out if I would be able to refinance my current primary residence mortgage under HARP from a primary residence into an investment mortgage. I would still be residing in the home as my primary residence, but just to leave my options open for purchasing a new home.

I had read that refinancing on HARP to an investment mortgage sometimes isn't that much more over an owner occupied mortgage due to HARP LLPA caps.

Any advice?
  • November 09 2011 - Las Vegas
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Answers (4)

Best Answer

For Freddie Mac loan, a good suggestion would be to listen to Freddie Mac.

Freddie Mac Same Servicer does not allow a change from initial occupancy UNLESS that change is from an initial 2nd Home or initial investment property to a NEW Owner Occupied.   Your lender in paragraph one was correct about the rules for Same Servicer.  

Open Access does not have these restrictions, occupied to non occupied is perfectly acceptable in this version.  

Since you are clearly trying to do the right thing here since you have stated your intent, your next move should be to contact an Open Access lender, advise them you want to refinance your current property and that you intend to convert it to a rental within the next 12 months. Put the onus on the underwriter to determine how they see fit to classify the application with all the facts and intent disclosed.

Lastly, make sure to locate an Open Access lender that allows Investment Property refinance.   Many Open Access participants will only finance owner occupied applications.
  • November 09 2011
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I contacted one lender who told me HARP guidelines prevent refi'ing from owner occupied to investment. He said you could go the other way (invest to owner occ), he said essentially it needs to move to a "more stable product". He also told me if I refi'd on a owner occupied loan, if I decided to try and buy within 12 months after the refi, no underwriter would approve a new owner occupied loan within 12 months after the refi.

Another local lender told me "if my intent is occupy the home" rather than rent out my refi, go ahead and refi owner occupied and if I find a new place, he said I wouldn't have a problem getting a new owner occupied loan within 12 months of the refi.

Not sure who to listen to!
  • November 09 2011
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Yes, change from initial qualifying occupancy is permitted in Open Access.   It is NOT permitted in Same Servicer, so Wells cannot do it for you.

Any other lender participating in Open Access can.
  • November 09 2011
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I think it would help you to meet in person with a local lender since you are asking about 3 different questions that require long explanations for you to fully understand all the ramifications and exceptions.

The short answer is 'no, you can't do exactly what you are thinking.' The longer answer is maybe there's a way to get the end result you are after.
  • November 09 2011
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