- the lesser of:
- the outstanding principal balance of the existing mortgage as of the month prior to mortgage disbursement; plus
- interest due on the existing mortgage;
- late charges;
- escrow shortages; and
- Mortgage Insurance Premium (MIP) due on existing mortgage; or
- the original principal balance of the existing mortgage (including financed Upfront Mortgage Insurance Premium [UFMIP]):
- the outstanding principal balance of the existing mortgage as of the month prior to mortgage disbursement; plus
- less any refund of UFMIP.
For investment properties, the maximum base loan amount for streamline refinances is:
- the lesser of:
- the outstanding principal balance of the existing mortgage as of the month prior to mortgage Disbursement; or
- the original principal balance of the existing mortgage (including financed UFMIP);
- less any refund of UFMIP.
Use of Estimates in Calculating Maximum Mortgage Amount
The Mortgagee may utilize estimates in calculating the maximum mortgage amount to the extent that the total mortgage amount does not result in the Borrower receiving greater than $500 cash back at mortgage disbursement.
Cash to the Borrower resulting from the refund of Borrowers’ unused escrow balance from the previous mortgage must not be considered in the $500 cash back limit whether received at time of, or after, mortgage disbursement.
When the estimates utilized in calculating the maximum mortgage amount resulted in greater than $500 cash back to the Borrower at mortgage disbursement, Mortgagees may reduce the borrower’s outstanding principal balance to satisfy the $500 cash back requirement.
The Mortgagee must obtain the payoff statement on the existing mortgage.
For additional information see:
- Handbook 4000.1 II.A.8.d.vi(C)(4)(j) at: https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh