Wednesday, June 20, 2012

Modify Rental Property Mortgages - HAMP Tier 2

Under the Making Home Affordable Program, Rental Property is a property that is used by the borrower for rental purposes only and not occupied by the borrower, whether as a principal residence, second home, vacation home or otherwise.

For rental property to qualify for HAMP, the following conditions must be met as well as many of the prior HAMP conditions:

  • >=2 mortgage payments must be due & unpaid;
  • Borrower owns <= 5 single family properties; 
  • Rental property at issue is currently occupied by tenant as a principal residence or is vacant; & 
  • Borrower certifies intent to rent property to tenant(s) for >=5 years following effective date of the permanent modification.
Interestingly, where a property is occupied as a principal residence by a legal dependent, parent or grandparent of the borrower but the borrower does not charge or collect rent, the property is nonetheless considered a "rental property". 

Also, there are no longer any occupancy / principal residency requirements under the HAFA Short Sale Program. 

These are fabulous additions to the Making Home Affordable Program.

Landlords, be sure to ask your rental home's lender about a possible modification if you are behind on your mortgage. Help is out there.