The High LTV Refinance Option (HIRO) Mortgage Program is by mortgage and loan company Fannie Mae. Many consider it to be the last resort for borrowers with limited options and low equity because you have the opportunity to refinance with low mortgage rates. HIRO is ideal for individuals who have limited or no home equity.
LTV, understood as loan-to-value ratio, represents the amount borrowed for your mortgage versus your home’s actual worth at fair market value. While LTV decreases as home equity increases, it takes a significant amount of time to build the latter. Several homeowners, however, have witnessed their home values and home equities decline concurrently.
Origins of the HIRO program date back to when prices for homes were escalating nationwide, with some places simultaneously seeing a decline in home values. The program seeks to assist homeowners in these places whose home values have decreased but need to refinance their loans according to new, attainable requirements.
To qualify for the HIRO program, your loan needs to be under Fannie Mae — and it must have been opened from October 1, 2017, onwards. You will also have to wait at least 15 months from opening it before applying and qualifying for the HIRO program.
Other requirements include the following:
- No delinquencies over 30 days
- One or no 30-day late payments in the span of the past 12 months
- No 30-day late payments in the span of the past 6 months
- LTV of at least 97.01% for single-family homes
- LTV of 75.01% for investment properties of 1-4 units
- LTV of 90.01% for refinancing a second home
The HIRO program can help ease the burden of your monthly mortgage payments and monthly principal or interest. You can take advantage of lower rates as well and possibly shorten the term of your amortization. You may even be able to stabilize your mortgage product to one with a fixed rate.
For more information on benefits for senior homeowners, be sure to check out Senior Strong! Contact us today for more.
William Rivers is an editor with a master’s degree in Human Services Counseling at Maine State University. He has more than 20 years of experience working in the senior healthcare industry.