Refinancing of Affordable Units
Department of Housing (DOH) policy does not allow cash-out in subordination transactions. The maximum new mortgage loan amount will be the amount of the pay-off letter(s) plus the closing costs shown on a signed good faith estimate.
The amount of the new mortgage loan must be consistent on the following documents, and must be submitted to DOH by the lender representative to initiate processing of the Subordination Request:
- Copies of the recorded City of Chicago junior mortgage related to your request
- A signed subordination request letter from the new lender, with all transaction details, and the rationale for the refinance
- A copy of the signed homeowner’s authorization to release information
- A copy of the signed loan estimate for the new mortgage
- A copy of the signed and properly completed 1003
- A copy of the signed truth-in-lending disclosure for the new mortgage
- A pay-off letter for a date at least fifteen (15) business days from the date documents are delivered to DOH
- A copy of the mortgage approval or commitment letter signed by an authorized party of the lender with term, P&I and interest rate details for the new mortgage
- A copy of new title commitment for the amount of new mortgage
- A copy of the appraisal used to process the new mortgage
- A copy of documents to show the original loan amount, P&I, and loan type
Upon receipt of all of these documents, DOH staff can begin processing the subordination request. This can take 15 business days, or longer. If approved, the subordination is mailed through the USPS, unless a prepaid overnight carrier envelope is provided. The lender representative should ensure that the amount of the new mortgage loan is consistent, even on the title commitment, and the rate is consistent on all documents.
For more information, contact 312.744.0826.