Subordination Agreements

 

Subordination Agreements

Please email requests for Subordination Agreements to the Los Angeles County Development Authority's (LACDA) Housing Bonds & Asset Management Unit:

Lorena R. Ojeda
lorena.ojeda@lacda.org

PLEASE NOTE: The LACDA will not subordinate to refinancing a new first trust deed unless it is solely to lower the interest rate and reduce monthly payments, or to obtain financing for maintenance or repair of the property pre-approved by the LACDA.  Under no circumstances will the LACDA subordinate to a third position or subordinate to a new refinance first trust deed to pay off a third trust deed or debt consolidation.  

Upon receipt of the emailed request, the LACDA will email back a list of conditions to the requestor including, but not limited to:

- Copy of the new signed application/1003 (all pages must be submitted) and 1008 Underwriting Summary
- Payoff Demand Statement for 1st Mortgage
- Signed letter from buyer stating reason for refinance
- Preliminary Title Report and any Supplemental, as needed, as well as showing property taxes are current
- Copy of complete appraisal
- Certified estimated escrow settlement statement or certified estimated HUD-1
- Certified copy of new note outlining new terms and conditions
- Copy of Evidence of Insurance showing the LACDA as 2nd mortgagee
-Loss Payee Clause: Los Angeles County Development Authority, 700 W. Main Street, Alhambra, CA 91801
- Subordination Fee for $200.00 (non-refundable), check payable to the Los Angeles County Development Authority
- Attending a homeowner counseling session
- Copy of current 1st mortgage billing statement
- Borrower's authorization

Any requested documentation must be returned by mail.

Do not fax above items.  Overnight or regular mail the requested documents to:

Los Angeles County Development Authority
Housing Investment and Finance
700 W. Main Street, Alhambra, CA 91802.

The LACDA needs 10 to 15 working days, from the receipt of ALL the above items to review and approve your request for subordination.  Any items not listed above may be requested.

If the borrower currently holds an MCC Certificate, upon closing their refinance, the Certificate will be void.

The LACDA will evaluate requests for subordination on a case-by-case basis consistent with the interest of the LACDA and the needs of the homeowner.

Eligible home improvements are acceptable if reviewed and pre-approved by the LACDA and must be signed and submitted by the homeowners along with two licensed contractor's itemized agreement/contract. LACDA eligible home improvements are code enforcement items (e.g. for plumbing, electrical, heating, roofing) and/or improvements requiring permits from the appropriate municipality building and safety department.

The Combined Loan-to-Value (CLTV) for home ownership loans may not exceed 80%.  The CLTV is calculated based on all existing liens.  Additional parties may not be added to title. Quitclaims may be acceptable if one of the original parties will remain in the property and a certified executed copy of the quitclaim deed is provided.  There are NO EXCEPTIONS.

The LACDA will allow maximum 3% for loan origination, financing of fees and costs.

Example: Total payoff loan is $195,000 + 3% = $200,850 (maximum new loan). In this case $5,850 would be allowed for loan origination, financing of fees, and costs.