Is the current appraised value or the prior purchase price used for a refinance transaction?

For refinance transactions and manual and DU underwriting methods the property value used in the calculation of the LTV ratio¹ is the current appraised value.

1. As defined in the Glossary E-3-15, Glossary of Fannie Mae Terms: O, the original loan amount is the amount of the loan as indicated by the note.

Note: The LTV ratio calculation shown above may differ for certain mortgage loans. For details on these differences, see B2-1.3-05, Payoff of Installment Land Contract Requirements; B5-2-03, Manufactured Housing Underwriting Requirements; B5-3.1-02, Conversion of Construction-to-Permanent Financing: Single-Closing Transactions; B5-3.3-01, HomeStyle Energy for Improvements on Existing Properties; B5-3.2-03, HomeStyle Renovation Mortgages: Collateral Considerations; B5-5.1-02, Community Seconds Loan Eligibility; B5-5.1-04, Community Land Trusts; B5-5.2-03, Loans with Resale Restrictions: Underwriting and Collateral Considerations; and B7-1-01, Provision of Mortgage Insurance.

For complete details, see B2-1.2-01, Loan-to-Value (LTV) Ratios.