Jul 17, 2009

Update on Underwriting Guidelines (Recently listed FHA/VA Properties)

Properties currently listed for sale are not eligible for FHA or VA refinances, whether fully qualifying rate/term, streamline, or cash out. Properties previously listed and then canceled, are eligible for refinance with the following loan-to-value guidance:

  • Refinances, including fully qualifying rate/term and streamline: Maximum loan-to-value allowed.
  • Cash out transactions: Maximum 70% loan-to-value if the listing was canceled within six months preceding the application date.

The following evidence must be provided to verify cancellation of the listing:

  • The property’s listing history must be shown in the subject section of the appraisal;
  • Documentation of canceled listing agreement;
  • Evidence a search was made of the Multiple Listing Service (MLS); and
  • The borrower’s confirmation of their intent to continue to occupy the subject property as their primary residence and a reasonable explanation for removing the house from the market.

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