If you`re a homeowner who is seeking to refinance your mortgage or take out a home equity loan, you may need to request a subordination agreement from the Department of Housing and Urban Development (HUD). In this article, we will guide you through the process of requesting a subordination agreement from HUD.

What is a subordination agreement?

A subordination agreement is a legal document that allows one creditor to take priority over another creditor in the event of a default or bankruptcy. In the context of real estate, a subordination agreement is often required when a homeowner wants to refinance or take out a second mortgage.

For example, if you have an existing mortgage and you want to take out a home equity loan, the lender providing the home equity loan will want to ensure that their lien on your property has priority over the existing mortgage lender. This is where a subordination agreement comes in – it allows the home equity lender to take priority over the existing mortgage lender in the event of default.

How to request a subordination agreement from HUD?

To request a subordination agreement from HUD, you will need to follow these steps:

Step 1: Contact your lender

Before you can request a subordination agreement from HUD, you will first need to contact your lender to determine if a subordination agreement is required. If your lender determines that a subordination agreement is required, they will provide you with the necessary paperwork to complete the request.

Step 2: Download and complete HUD form 90051

HUD requires you to complete form 90051, also known as the Request for a Subordination Agreement. This form collects information about your property, current mortgages, and the new lender. You will need to provide accurate information regarding the amounts and statuses of your existing mortgages, as well as the terms of the new mortgage or home equity loan.

Step 3: Gather supporting documentation

In addition to the completed form 90051, you will need to provide HUD with other supporting documentation, including:

– A copy of your existing mortgage

– A copy of the proposed mortgage or home equity loan

– Proof of hazard insurance

– A current appraisal of your property

Step 4: Submit your request to HUD

Once you have completed form 90051 and gathered all of the necessary supporting documentation, you can submit your request to HUD. You can submit your request online through the HUD portal or by mail to the HUD regional office that serves your area.

Step 5: Wait for a response

HUD will review your request and supporting documentation and will typically issue a decision within 30 days. If your request is approved, HUD will issue a subordination agreement to your new lender, allowing them to take priority over your existing mortgage lender.

Conclusion

Requesting a subordination agreement from HUD can be a complex process, but it is an essential step for homeowners who want to refinance or take out a home equity loan. By following these steps and providing accurate information and supporting documentation, you can help expedite the process and ensure that your new lender has the necessary lien priority.