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FHA Mortgagee Letter 19-11 Maximum Loan-To-Value and Combined Loan-To-Value Percentages for Cash-Out Refinance Mortgages

​The Federal Housing Administration (FHA) published Mortgagee Letter (ML) 2019-11, “Maximum Loan-to-Value and Combined Loan-to-Value Percentages for Cash-out Refinance Mortgages,” which announces the reduction of its current maximum loan-to-value (LTV) and combined loan-to-value (CLTV) percentages for cash-out refinance mortgages from 85 percent to 80 percent. The cash-out refinance ML guidance is effective for mortgages with case numbers assigned on or after September 1, 2019.

The new guidance puts FHA in alignment with Government Sponsored Enterprises’ policy regarding maximum LTV/CLTV percentages on cash-out refinances.

This policy guidance coincides with other policy changes issued by Ginnie Mae. Read Press Release​ from the Department of Housing and Urban Development (HUD) that addresses the changes at both FHA and Ginnie Mae.