Until now, it’s been difficult for upside down duplex investors to get the government-backed loan modifications available to owned-occupied duplexes and single family homes.
In late January, however, the Obama administration announced an expansion of the HAMP program to allow investors to qualify.
According to a report in Bloomberg News, Timothy Massad, the Treasury’s assistant secretary for financial security said starting in May, landlords can use the Home Affordable Modification Program (HAMP) for up to four loan workouts, as long as they rent out each property or have plans to fill them.
The federally-subsidized program pays banks to cut interest rates, lengthen the terms or forgive some of the mortgage principal.
The theory behind the change in policy is keeping current owners in place prevents tenants from being evicted. Massad said, “Vacant properties are a problem no matter how they became vacant.”
Almost one in every four home purchases in January were investment or vacation properties.
It is estimated that about 700,000 landlords will be eligible to modify their mortgages.