Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Mar 20, 2012

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Under the Home Affordable Refinance Program Phase II, better known as HARP 2, home mortgage loan borrowers who own duplexes or triplexes are able to qualify for a refinance so long as their loans meet the other HARP 2 requirements as well.

HARP 2 is the government’s response to the original HARP that failed miserably. The original HARP was unable to succeed because of its strict requirements that proved to bar most of those it was designed to help from qualifying. This new program has been modified in the areas its predecessor fell short in, namely in allowing more underwater homeowners to qualify for one of its government-backed home loan refinances.

Under HARP 2, anybody who owns a one- to four-unit property can potentially qualify. A one-unit home is a typical single-family residence. A two-unit home is what most refers to as a duplex. A three-unit home is a triplex. And a four-unit home is a piece of real estate that can house four families in four different units.

However one- to four-unit property owners must still meet the other HARP 2 requirements in order to qualify for a refinance. Owner’s mortgage loans must:

  • Be owned or guaranteed by Freddie Mac or Fannie Mae
  • Have been sold to Freddie Mac or Fannie Mae on or before May 31, 2009
  • Not have been previously refinanced under HARP (unless it was backed by Fannie Mae and refinanced between March and May 2009)
  • Have a loan-to-value (LTV) ratio less than 80 percent

The LTV ratio represents the relation between the balance remaining on a borrower’s home loan and the appraised amount of his or her property. If a property is less than the borrower’s home loan balance, the LTV ratio will be above 100 percent, and thus in the range to meet that fourth requirement. If the property is worth more than a borrower’s home loan balance, and to such an amount that the borrower has an LTV of 80 percent or less, then the borrower would not qualify for HARP 2.

The reason for this LTV floor is because those in possession of a property with adequate equity do not need government assistance to refinance their mortgage loan.

But it’s important to note that there is no LTV ceiling for fixed-rate mortgages any more, allowing even the deepest of underwater homeowners to apply for HARP 2 if eligible.