HUD has amended the FHA Secure Initiative with additional underwriting guidelines. FHA Mortgagee letter 2008-09 was issued and it basically states:
A second appraisal will be required on FHA loans when:
1. The loan amount exceeds $417,000, AND
2. The LTV equals or exceeds 95%, AND
3. The property is determined as being in a declining market.
The second appraisal must be performed by a FHA approved appraiser and can be done as an exterior-only appraisal using Fannie Mae/Freddie Mac 2055 form. This applies to SFR's only. Condo's and manufactured will require a complete second appraisal. You can use the same case # for both appraisals.
Also, cash-out LTV changes-
If the loan amount is greater than $417,000, the LTV may not exceed 85% of the appraised value.
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