FHA Refinances Cashout Require Two Appraisals now in 2009 over 85% LTV
Starting January 1st 2009 , Loans with FHA case numbers assigned on or after will require a Second Appraisal to be done for cash-out refinances greater than 85% LTV.
If you are refinancing two mortgages into one then its considered a Cash-out. The only exception is when the 2nd mortgage was used as a purchase and not as a cash out or HELOC.
Reverse Mortgages are the only exception to this guideline change.
Below are highlights to the changes.
- A 2nd appraisal is required regardless of loan amount or property location.
- The 2nd appraisal must be still be completed by a FHA approved appraiser.
- If 2nd appraisal is lower than 5% of 1st appraisal, the maximum mortgage amount will be based on the lowest appraisal.
- This does not change the current requirement for two appraisals on loans greater than $417,000 and LTV greater than 95%.
Please consult with a mortgage expert regarding these changes.