For conventional loans (Fannie Mae and Freddie Mac), HARP 2.0 extended guidelines to the existing DU Refi Plus program. We can now refinance an owner-occupied property regardless of the current value of the home! Investment properties and 2nd homes can be refinanced to 105% of their value. Mortgage insurance is NOT added to the loans. We still need to verify income and credit scores, but this gives many people the opportunity to refinance their loans that until now have not been able to due to declining values. You can check if your loan is a Fannie Mae loan by going here: http://www.fanniemae.com/loanlookup/
FHA loans have also been updated by HUD. One big road block we’ve faced when doing FHA streamline refinances is the increase in mortgage insurance premiums and having to pay the up-front mortgage insurance. Before the change, borrowers that had monthly MIP of .55% would see that fee increase to 1.15% and borrowers had to pay 1% up-front. The new guidelines state that loans that have .55% monthly MIP rates can stay at .55% and the up-front charge has been effectively eliminated. As with all streamlines, we do not need an appraisal to complete the refi.
Both of these programs can be used to help borrowers refinance loans on homes that have lost equity. In order to participate in either of these programs, the exisiting loan must have originated prior to June 1st, 2009.