Requirements on loan amounts for mortgages that are insured by the Federal Housing Administration have been eased.
The change was outlined in Mortgagee Letter 10-36 issued Friday by the U.S. Department of Housing and Urban Development.
According to the housing agency, its prior policy was to limit the sum of all liens against a property to the maximum geographical limit.
But the latest mortgagee letter eliminates that requirement for both purchase and refinance transactions.
“Only the FHA-insured first lien is subject to FHA’s maximum mortgage limits,” HUD stated.
However, the maximum combined loan-to-value on the first and second lien is still limited to maximum FHA LTV ratios.
Mortgagee Letter 10-36 supersedes Mortgagee Letter 2010-24.
Case numbers assigned on or after Sept. 7 are impacted by the revision.
