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Agency Loan Subordination Frequently Asked Questions

How do I start the subordination process?

Your refinancing lender would need to provide the completed subordination documents to subordinations@nchfa.com. Refer your lender to our subordination requirements to ask them to complete your subordination request. It is the responsibility of the lender to confirm your eligibility for a subordination and if a fee is required.

Why is there a lien on my property?

You received a loan from North Carolina Housing Finance Agency that was secured by a lien on the property by the recording of a deed of trust.You are responsible for paying any balance that is outstanding when your property is sold or refinanced.However, you may request a subordination of your loan if you plan to refinance and you meet the Agency’s subordination requirements.

What is a subordination/when should I request a subordination?

Subordination refers to the order of priorities in claims for ownership or interest in various assets. If you refinance your first mortgage and have other liens on your home, you may need a subordination agreement to adjust the lien positions. Completing a subordination allows the new first mortgage lender to retain the first lien position.

When can I refinance/subordinate my loan with the Agency?

When you are able to subordinate your loan depends on the loan type:

  • Down Payment Assistance can be considered for subordination seven years or more from the date of the loan closing.
  • NC Foreclosure Prevention Fund (Hardest Hit Fund) Loans  can be considered for a subordination after the date of the loan. No subordination fee are required for Hardest Hit Fund Loans
  • All other loan types not specified above can be considered for a subordination after the date of the loan.

What is the expected turnaround time?

You can expect the process to take 17 business days following the receipt of a completed subordination packet as outlined on our website

Can I refinance to get cash out?

A cashout is not allowed, including for debt consolidation. However, consolidation of the first and subordinate loans plus closing costs and prepays are not considered a cashout. (A new loan received after closing the Agency loan is considered as cash out.)

  • Repairs to upgrade or renovate are considered a cashout.

Refinancing due to separation/divorce or death of co-owner?

Provide supporting documentation, such as a court-ordered separation/divorce agreement or death certificate.