Subordinate financing must comply with:
- the terms for the Community Seconds option, which allow, among other provisions, a maximum combined loan-to-value of 105% (see B5-5.1-01, Community Seconds Mortgages through B5-5.1-03, Community Seconds Delivery Considerations); or
- subordinate financing permitted in accordance with B2-1.2-04, Subordinate Financing.
Subordinate financing from a seller-held mortgage is not permitted with HomeReady mortgages.
For additional information, see B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility.