



HUD guidelines limit borrowers to using 60% of the available money (after closing costs & fees) in the first year. Beginning year two, the remaining funds become accessible. This maximum disbursement limit set by HUD allows for the GREATER of:
- 60% of the Principal Limit (amount of money available to borrower in all years of the loan) in the first twelve months of the loan from your closing date OR…
- The sum of Mandatory Obligations* (existing mortgage payoff, tax liens, closing costs, mortgage insurance premium) plus 10% of the Principal Limit. This total cannot exceed the total the Principal Limit at the time of loan closing.


Tenure: equal monthly payments
Term: equal monthly payments for a fixed period of months as specified by the borrower(s)
Line of Credit: payments made in installments or at various times and in amounts dictated by the borrower(s)
Modified Tenure: monthly payments with a line of credit
Modified Term: monthly payments for a fixed period of months with a line of credit
Due to HUD rules, in the first year the Line of Credit or monthly Tenure Payments or monthly payments cannot exceed 60% of the Principal Limit. After the first year, the available Line of Credit or Tenure/Monthly payments will be increased when applicable.







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