Conforming Jumbo with Subordinate Financing

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liverichly

3936 Posts

Posted - 05/16/2008 : 10:48:31 AM

Does Freddie Mac's conforming jumbo permit subordinate financing?

For example I have a client who has a $550k 1st (seasoned 5 years) and a $200k 2nd (non-purchase money)... value of home is at $1M. We're looking to refinance just the first mortgage and subordinate the 2nd, but underwriter is saying Freddie Mac doesn't permit 2nd mortgages (new or subordinating existing) in conjunction with the conforming jumbo program.

At http://www.freddiemac.com/singlefamily/increased_limits.html it states:

Ineligible Products and Features
Balloon Mortgages
FHA Mortgages
Financed MI
Streamlined refinances
Special purpose cash-out refinances
Second liens
Manufactured homes
Cooperative units
Temporary subsidy buydowns
Home Possible® Mortgages or other lender-branded affordable programs
2- to 4-unit properties

But I think that means that it's not available as a second lien... not that it doesn't permit a 2nd behind the 1st... especially when higher up on that link it says LTV/TLTV is 90%... if it didn't permit 2nds behind the first I think it would only say "LTV 90%*" with * pointing to "no secondary financing permitted".

What do you all think? And do any of you have successful experiences subordinating a 2nd behind a conforming jumbo 1st?

FundStar14

762 Posts

Posted - 05/16/2008 : 11:53:24 AM

I'm not sure of Freddie, but that would work with Fannie Mae per the following guidelines from AmTrust. They actually say you MUST subordinate:

Secondary Financing
-Institutional secondary financing available to LTV/CLTV limits 75/95.

-Rate/Term & Limited Cash-Out Refinance: Existing subordinate liens must be resubordinated. Consolidation of a first lien with subordinate lien(s) is not permitted.

Hope this helps.

daronc

1254 Posts

Posted - 05/16/2008 : 8:26:53 PM

It's fine... You can sub. the 2nd lien on both Fannie and Freddie... If you want me to get it done let me know.. I am wholesale lender... Been doing alot of these jumbo conforming.. Let me know... we are 48 hours to approvals....

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