TIP OF THE DAY- FHA RATE AND TERM REFINANCE

TIP OF THE DAY- FHA RATE AND TERM REFINANCE

No Cash-Out Refinances

(A) Rate and Term

(1) Borrower Eligibility

(a) Occupancy Requirements

(i) Standard Rate and Term refinance transactions are only permitted on owner-occupied Principal Residences and HUD-approved Secondary Residences.

(ii) Required Documentation The Mortgagee must review the Borrower’s employment documentation or obtain utility bills to evidence the Borrower currently occupies the Property and determine the length of time the Borrower has occupied the subject Property as their Principal Residence.

(b) Payment History Requirements (Manually Underwritten)

(i) Standard For all mortgages on all properties with less than six months of Mortgage Payment history, the Borrower must have made all payments within the month due. For all mortgages on all properties with greater than six months history, the Borrower must have made all Mortgage Payments within the month due for the six months prior to case number assignment and have no more than one 30-Day late payment for the previous six months for all mortgages. The Borrower must have made the payments for all Mortgages secured by the subject Property for the month prior to mortgage Disbursement.

(ii) Required Documentation If the Mortgage on the subject Property is not reported in the Borrower’s credit report, the Mortgagee must obtain a verification of Mortgage to evidence payment history for the previous 12 months.

(2) Maximum Mortgage Amount

(a) Maximum Loan-to-Value Ratio The maximum LTV for a Rate and Term refinance is:

·         97.75 percent for Principal Residences that have been owner-occupied for previous 12 months, or owner-occupied since acquisition if acquired within 12 months, at case number assignment;

·         85 percent for a Borrower who has occupied the subject Property as their Principal Residence for fewer than 12 months prior to the case number assignment date; or if owned less than 12 months, has not occupied the Property for that entire period of ownership; or

·         85 percent for all HUD-approved Secondary Residences

justin brown