When reviewing a subordination request, we assess the new loan terms according to their benefit to the borrower. For a request to be approved, it must clear these thresholds:
1. Net Tangible Savings Test
Savings must recapture the closing costs for the refinance within 24 months
These savings do not include:
Pre-payment and/or deferral of monthly payments
Reimbursement of funds in an existing impound account
Lender credits
2. Loan to Value
CLTV must be greater than or equal to 75%
In addition to these thresholds, NeighborWorks® Sacramento will not consider requests for subordination for these reasons:
To receive cash from equity in the property (cash out refinance)
To pay-off loans junior to a NeighborWorks® Sacramento loan or other debt secured by the property
For a NeighborWorks® Sacramento amortized loan
To pay property taxes, utilities, or assessments
To pay-off revolving, automotive, or other consumer debt