In other words, even if the first mortgage was below the maximum loan limit, an associated second mortgage could push it beyond the limit and disqualify the loan from FHA financing.
For example, in Los Angeles county the maximum loan amount for a FHA loan is $729,750, meaning a loan of that size wouldn’t qualify for FHA financing if it had a second mortgage behind it.
Going forward, only the FHA-insured first lien is subject to this maximum loan limit.
However, FHA still requires that the combined loan amount of the FHA-insured first mortgage and any subordinate lien(s) not exceed the applicable FHA loan-to-value (LTV) ratio, which is generally 96.5 percent.
- Mortgage Definition: Primary Residence (zillow.com)
- New FHA Program Helps Homeowners in a Negative Equity Position To Refinance (saratogavoice.com)
- FHA 2010 Mortgage Guidelines (brighthub.com)
- Getting A Government-backed FHA Loan: The Steps (azmortgageguru.com)
- FHA Loans In Arizona: What Fees Come With an FHA Loan? (azmortgageguru.com)
- It’s official – FHA has formally announced the mortgage insurance changes for FHA loans (annarborundressed.com)
- Legal, Permanent, Non-Permanent..: Residency & Mortgage Lending (zillow.com)