MAX CLTV FHA

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)