FHA Loan Expert Blog

Is there a max CLTV on an FHA refinance?  Let’s settle this dispute right here and now with Mortgagee Letter 2005-43 dated October 31, 2005 with states:

“Subordinate financing may remain in place, but subordinate to the FHA insured first mortgage, regardless of the total indebtedness or combined loan-to-value ratio, provided the homeowner qualifies for making scheduled payments on all liens.”

Clearly there is no CLTV limit.  I hope this helps some borrowers refinance into the FHA low rate first mortgage.  Now, getting the second mortgage to subordinate will be a subject of a future article.  One mortgage battle at a time around here.

(source=portal.hud.gov/fha/reference/ml2005/05-43ml.doc)

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Buying a HUD home (HUD Repo)

FHA Non-Profit Approval

Seller funded non-profit FHA down payment assistance appears to be here to stay.  The Penobscot Indian Nation and Ameridream, Inc. have won their lawsuit agains the Department of Housing and Urban Development.  Per the March 2008 order: 

The final rule entitled Standards for Mortgagor’sInvestment in Mortgaged Property, 72 Fed. Reg. 56,002 (Oct. 1, 2007) (codified at 24 C.F.R. § 203.19) is vacated and remanded to the United States Department of Housing and UrbanDevelopment. The Clerk of this Court shall remove Civil Action No. 07-1752 from the docketof this Court. This is a final appealable order.

So, FHA zero down payment continues for millions of homeowners.  Contact your FHA lender for details on how to purchase a home with no money down and non-profit assistance based on the March 2008 Court order.