Want to Refinance but Don’t Think You Have Enough Equity in Your Home? Check out the HIRO Program!

Hello Hampton Roads,

With current interest rates attractively priced below 3%, many home owners with higher rates want to save money and refinance, but unfortunately some may not be able to do so because their homes don’t have enough equity or are underwater meaning that the home is worth less than the current mortgage.  In order to refinance, most traditional lenders require a minimum of 20% equity or 80% loan to value (LTV), leaving homeowners with less than 20% equity stuck in their current mortgage. However, there is a program that can help! Fannie Mae’s High LTV Refinance Option (HIRO) allows home owners to refinance even if their mortgage is underwater.

HIRO is designed for Fannie Mae backed conventional mortgages, and you can use the Fannie Mae Look Up tool on their website to check if your mortgage is owned by them. The HIRO program can be used to refinance your primary residence(1-4 unit property), a second home, or investment property (also 1-4 units).  

Here are some of the highlights and requirements:

• Your current mortgage must have originated on or after Oct. 1, 2017 and must be in place for at least 15 months before a refinance can be considered. 

• If you previously refinanced using HARP, another Fannie Mae product, you aren’t eligible for HIRO.

• If you are refinancing your primary residence which is also a single family home, the minimum LTV is 97%.  A 97% LTV means the home has 3% equity.

• The minimum LTV will differ for other property types-see below:
• 85.01% LTV for an owner occupied 2 unit property
• 75.01% LTV for an owner occupied a 3 -4 unit property
• 90.01% for second home
• 75.01% for a 1-4 unit investment property 

• Mortgage payments must be current. No 30 day delinquencies within the last 6 months and no more than one over the last 12 months. Furthermore delinquencies can’t be more than 30 days long.

• You must reap a financial benefit or benefits. Refinancing has to benefit you either through lower rates, lower monthly payments or a shorter payment (amortization) period.

If you think HIRO could be a good option for you and would like more information, feel free to contact me: https://calendly.com/liz-schuyler. 

I’m happy to talk about your real estate plans as well as put you in touch with lenders who can help!

Thanks for Reading,

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