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Max Loan Amt

There are multiple rules that determine loan maximum caps and it is probably easier to have a mortgage professional help you, the borrower.  [To contact a mortgage professional for this help click here or call 888-299-4484].

 

Otherwise here’s a simplified explanation of how this is calculated:

First a 203K loan must stay within the correct Loan-to-Value (LTV) amount which could limit the dollar loan amount.  HUD allows up to 110% LTV but lenders tend to cap it at 103% LTV and sometimes 95% LTV.

Here’s one example at 103% LTV:  If a home’s future value appraisal (see definitions section for explanation) is $200,000 then the maximum loan amount could go to as much as $206,000 (or $200K x 103%).

Second, the maximum allowed loan amounts range from about $271K up to $727K and vary in each state & county.  These maximum loan amounts are the same as under the FHA 203(B) program.  To see the maximum your state & county allow go to:

MAX LOAN AMOUNTS:  https://entp.hud.gov/idapp/html/hicostlook.cfm

Fourth, there are more rules & exceptions that a lender or mortgage professional can help you through in part by using the HUD-92700 form (Maximum Mortgage Worksheet).  For example:

Solar energy equipment: a mortgage is eligible for an increase up to 20 percent if such an increase is necessary for the installation of.

Lastly, CLICK HERE for differences between a Refinance and a Purchase.

MAX FOR REFINANCES:

Based on the Lesser of:

  1. The existing debt on the property before rehabilitation, plus the estimated cost of rehabilitation and allowable closing costs or
  2. The lesser of the As-Is value plus rehabilitation costs or 110 percent of the after-Improved value multiplied by the appropriate LTV factor.

NOTE:  If the property was owned less than one year, the acquisition cost plus the documented rehabilitations costs must be used.

MAX FOR PURCHASES:

 

The maximum mortgage amount is based on the lesser of 1) or 2) of the below multiplied by the appropriate LTV factor.

  1. The As-is value or the purchase price of the property before rehabilitation, whichever is less, plus the estimated cost of rehabilitation or
  2. 110 percent of the After-Improved value of the property.

[For an Approved 203(K) Lender click here or call 888-299-4484]