FHA Home Loans Refinancing

FHA Loan to Value Guidelines

01.13.11

Recently, HUD revealed updated FHA guidelines with Loan to Value (LTV) restrictions in the FHA Mortgagee Letter 2008-40.  The maximum loan-to-value varies by depending upon which type of FHA loan program the borrower is utilizing.

FHA Home Purchase Loans: Max LTV is 96.50%. Max CLTV is 100%. See FHA Down Payment Assistance for options.

Rate and Term Refinance (Non-Streamline): Max LTV/CLTV is 97.75%.

Cash Out Refinance Loans: Max LTV/CLTV is 85%. Considering a mortgage refinance with cash out or debt consolidation exceeding $1,000. To qualify for cash loans, the borrower must be owner occupied 1-2 unit properties. 3-4 units are not eligible for cash out.

FHA Streamline Refinances: (Fixed FHA Rates Only and Conforming Balance only)

  • FHA Streamlines with Appraisal: Max LTV is 97.75%. Max CLTV is 100%. Refer to the Streamline section for loan amount calculation and other requirements.
  • Streamline (FHA to FHA) without Appraisal: No LTV maximum, however, a maximum insurable home loan amount applies. If second mortgages remain subordinating, the maximum CLTV is 100%. Refer to the Streamline section for loan amount calculation and other requirements.
  • For loans with eligible Down Payment Assistance, the maximum CLTV is 100%, however, refer to the Down Payment Assistance additional guidelines for requirements and restrictions.

FHA 203K Loan:  Max LTV/CLTV is 115%.  See FHA restrictions on HUD.gov.

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