Refinancing Investment Property Under Government Programs is usually not possible, but real estate lenders may have other options available.

Q: I may have misunderstood some information from your radio show from last Sunday but wanted to clarify it anyway.

Did you say that owners of investment property may be eligible for certain refinancing, interest rate reduction or principal reduction programs under the Home Affordable Refinance Program (HARP)?

I have looked on the government websites and called my lender to verify that information but did not find anything that I might qualify for.

A: Most loan modification programs are aimed at assisting homeowners with their primary residences. Even second homes and other homes are generally ignored by the loan programs.

There are some lenders that are taking a harder look at some “investment” real estate properties like timeshare properties and other vacation home properties.

In some cases, certain lenders will work with their borrowers in the short sale of those properties and may even forgive any deficiency due to the sale. (A deficiency is created when the property is sold for less than what is owed on the property.) In some states, lenders can go after borrowers for that deficiency even on primary residences. In most states, lenders can go after borrowers for deficiencies on investment properties and even on second homes.

Depending on where your property is located and the lender involved, you may be able to get that lender to agree to refinance the investment property under certain circumstances or allow you to short sell the property. But you should know that few residential investment lenders will actually work with you to refinance the property, some may work with you to short sell the home, but won’t forgive the deficiency and others will simply continue to receive your payments and sue you if you fail to pay up.

In other words, the federal government has encouraged lenders to work with investment property owners, but few of them are doing so – and like all loan modification programs, it is entirely at the discretion of the lender.

For more details, please go to MakingHomeAffordable.gov.