This ticket comes from MASH-968. We need to modify the way we are determining loan type associated with 203k loans when the loan limits are close to conforming loan limits.
The maximum mortgage amount that FHA will insure on a 203(k) purchase is the lesser of:
the appropriate Loan-to-Value (LTV) ratio from the Purchase Loan-to-Value Limits, multiplied by the lesser of:
the Adjusted As-Is Value, plus:
Financeable Repair and Improvement Costs, for Standard 203(k) or Limited 203(k);
Financeable Mortgage Fees, for Standard 203(k) or Limited 203(k);
Financeable Contingency Reserves, for Standard 203(k) or Limited 203(k); and
Financeable Mortgage Payment Reserves, for Standard 203(k) only; or
110 percent of the After Improved Value (100 percent for condominiums); or
the Nationwide Mortgage Limits. (In this case, Essex county in Massachusetts allows a loan limit of $517,500)
The loan limit in this scenario would be the lesser of:
The appropriate purchase LTV requirement, in this case being the 96.5%, multiplied by:
The as is value of $365,000 plus the financeable Repair and Improvement Costs, Mortgage Fees, Contingency Reserves, and Mortgage Payment Reserves. The only one we know for sure in this case is the $87,500 for the cost of the repair and improvements, which equals out to $452,500.
OR The after improvement value of the property is $452,500 with 110% of this amount being $497,750.
OR The Nationwide mortgage limit, which is $517,500 for Essex county.
In this case, the limit should be $452,500 (which still may be inaccurate as we do not ask for the other factors required) multiplied by 96.5%, equaling out to $436,662.
We should not be applying the 3.5% down payment rule for the FHA purchase to this scenario. This requirement only applies to the 203B purchase. Because of this issue, the 203k jumbo does not correct this issue.
We can account for the nationwide mortgage limits and the 110 percent after improved value (100 for condominiums). The rest, there is no way for us to accurately support.
The nationwide mortgage limits are already supported within Marksman.
In order to support the percentage, we need to remove (or increase) the hard-coded LTV limit for 203K loans.
Purchase should allow up to 106.15 - that is 96.5% x 110%
Refinance should allow up to 107.525 - that is 97.75% x 110%
We can support the lesser of the two options within Marksman.
Closing this ticket out as there is a ticket regarding FHA hard-coded LTV limits MP-448.