Affordable Seconds
Affordable Seconds are established, documented secondary financing or financial assistance programs administered by an Agency that meet the following criteria:

• The program must include specific procedures to provide Borrower qualification and processing and loan program administration on an ongoing basis.
• The interest rate, if any, should not be higher than 2% above the interest rate of the Affordable Mortgage.
• Interest, if any, should be payable monthly as accrued, without negative amortization.
• No balloon payments should be due prior to the maturity or payment in full of the Affordable Mortgage.
• Affordable Second loans may only consist of a second-lien mortgage. Third liens are not acceptable (i.e., there may be no more than two (2) liens on the property).

 

Agency - The sponsor of a Secondary Financing Program may be:

• A duly authorized authority or agency of the state, local, or municipal government;
• A not-for-profit, 501(c)(3) corporation or a tax exempt religious organization
• The Borrower's employer.

 

Community Second

A Community Second is an established, documented subordinate financing or financial assistance program, commonly referred to as a Community Second mortgage, which is sponsored/administered by an agency (as defined below) and meets the following standard criteria:

Community Seconds are the only eligible subordinate financing. Funds from the Community Second can be applied toward closing costs and prepaid items. Any excess amount after satisfying closing costs, prepaid item requirements, and the minimum down payment required from the borrower is to be applied towards the down payment.

• The program guidelines must include specific procedures to provide applicant qualification, and processing and loan program administration on an ongoing basis.
• The interest rate, if any, shall not be higher than the interest rate of the Affordable first mortgage.
• The interest, if any, shall be due prior to maturity or payment in full of the Affordable first mortgage.
• No balloon payments shall be due prior to the maturity or payment in full of the Affordable first mortgage.
• No prepayment penalty.
• Negative amortization is not allowed.
• May be forgivable over time.

Note:

• There are no restrictions on the lien position of the Affordable Community Second, provided the program guidelines do not require the loan to be in second lien position.

See: 

97-105% Purchace Financing

103% Financing
 

For Commercial Mortgage industry...
see our page on CMBS (Commercial Mortgage Backed Securities)
2nd mortgages not allowed...we show a way around this


see Mezzanine Loans ...for Commercial Mortgage Loan Financing
How to get a Junior Lien (similar to second mortgage)