FHA has defined combined loan-to-value (CLTV) restrictions for subordinate financing based on the entity providing the subordinate financing.
Combined Loan-to-Value and Maximum Mortgage Amount with Secondary Financing | |||
Entity Type | CLTV | Maximum Loan Amount | |
Governmental Entity and HOPE Grantee | No max. CLTV for secondary financing loans. | The insured first mortgage may not exceed the FHA Nationwide Mortgage Limit for the area in which the Property is located. | |
HUD-Approved Nonprofit | No max. CLTV for secondary financing loans. | ||
Family Members | Base Loan Amount and secondary financing amount must not exceed 100 percent of the Adjusted Value. | ||
Private Individuals and Other Organizations | Base Loan Amount and secondary financing amount must not exceed the applicable FHA Loan-to-Value (LTV) limit. | The Base Loan Amount and secondary financing amount must not exceed the Nationwide Mortgage Limit for the area in which the Property is located. |
For additional information on secondary financing see:
- Handbook 4000.1 II.A.4.d.iii(J) and II.A.5.c.iii(J) available at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh
- Nationwide Mortgage Limits can be accessed at: https://entp.hud.gov/idapp/html/hicostlook.cfm