Trump administration puts new limits on cash-out refinance loans [View all]
The Trump administration is reducing how much home equity mortgage borrowers can withdraw through cash-out refinances.
Starting Sept. 1, the Federal Housing Administration will limit the loan amounts for cash-out refinancings to 80% of the home’s value. Previously, borrowers could take out up to 85% of the property’s equity.
The new loan amount limit is in line with the limits already in place at Fannie Mae and Freddie Mac.
Cash-out refinances have grown in popularity in recent years in tandem with ballooning home values across much of the country. Many people have turned to these loans to pay for home improvements, including renovations intended to aid older homeowners as they age in place rather than downsize to a smaller home or move to a retirement community.
In 2018, the volume of cash-out refinances grew as mortgage rates rose, making up 63% of all FHA refinance activity through September, up from 39% the previous year, the Wall Street Journal reported.
https://www.msn.com/en-us/money/realestate/trump-administration-puts-new-limits-on-cash-out-refinance-loans/ar-AAFekoF?li=BBnbfcN
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