FHA Changes Requirements For Cash-Out Refinancing

    Since 2013, the number of cash-out refinances on FHA-backed loans has skyrocketed an incredible 250%—and, in hopes of reversing the trend, the Federal Housing Association is changing the requirements for refinancing.

    According to a recent article in HousingWire, effective September 1, 2019, the FHA will be changing the loan-to-value requirements from 85 percent to 80 percent. This will reduce the number of mortgage holders who qualify for a cash-out—and, according to the FHA, “strengthen the equity position of cash-out refinances and reduce loss severities in the event of default, stay ahead of any potential future shift in the housing market and better support FHA’s mission of providing access to sustainable homeownership that builds equity.”

    The Takeaway:

    What does that mean for you? If you’ve been considering refinancing, the changing regulations may have an impact on your ability to cash-out, or how much you are able to cash-out—so before you move forward with the process, make sure your loan-to-value ratio is at 80 percent or below.

    Trackback from your site.

    Peter Sweeney

    Hello Colorado, thank you for taking the time to visit our website! We are a Colorado rooted brokerage whose founder's grew up in the Denver Metro Area. We are passionate about creating a culture of happy agents which then relays to the amazing service they provide to clients. If we can help you in any way, with any Real Estate needs, please do not hesitate in contacting us. Thank you again for taking the time!

    Leave a Reply