Lender Guidelines: 2.4 New Mortgage Requirement/No Refinancing
Lender Guidelines: 2.4 New Mortgage Requirement/No Refinancing
The proceeds of the new mortgage loan (whether in conjunction with Non-Bond DPA, Bond DPA or MCCs) cannot be used to acquire or replace an existing mortgage, i.e., each mortgage loan must be made to a person who did not have a mortgage (whether or not paid off) on the residence securing such mortgage loan at any time prior to the execution of the mortgage loan, except for certain temporary initial financing for a mortgage securing a construction period loan, a construction bridge loan, or similar temporary initial construction financing initially incurred for the sole purpose of acquiring the Residence and initially incurred within twenty four (24) months of the loan closing date, having an original term of twenty four (24) months or less, and not providing for scheduled payments of principal during such term.
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