Tag Archives: LTV

Guideline Change – FHA Refinances Cashout Require Two Appraisals now in 2009 over 85% LTV

FHA Cash-Out Refinances

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.

Reminder: FHA Changes Effective Jan 1st 2009 Highlights

FHA Changes Highlights 2009

Reminder: FHA Changes Effective Jan 1st 2009 Highlights

Changes

  • Maximum LTV Financing: The required cash down payment will be 3.5% of the appraised value or the sales price (whichever is less). Closing costs may not be used to meet the minimum 3.5% cash down payment requirement.
  • Maximum base mortgage amount: For purchase loans, the maximum base mortgage loan amount will be 96.5% of the appraised value or the sales price (whichever is less). (Upfront Mortgage Insurance Premiums (UFMIP) may still be financed in the loan)
  • Maximum refinance LTV amount*: the maximum refinance LTV will be 97.75% of the appraised value. This LTV will replace the High-Cost/Low-Cost Factors in the maximum loan calculations. 

Note: although a Mortgagee Letter has not been published as of the deadline for this article, the FHA previously indicated that 97.75% LTV will be published and effective on Jan 1, 2009. Any other changes announced in the Mortgagee Letter will be analyzed and communicated as soon as possible.

Note:At this time, the revised LTV does not impact: 203(h) for disaster victims & HUD 184 for Native American loans