DEPARTMENT OF NEIGHBORHOOD DEVELOPMENT

Rev. 7/1/20

APPLICATION FOR SUBORDINATION OF MORTGAGE

DOCUMENTATION CHECKLIST

In order to begin processing a subordination request, the City of Boston requires that ALL of the

following documentation be received. You can expect a decision within 10 business days following

receipt of ALL these items listed below:

 Completed subordination request form (attached). This form must be completely

filled out for the subordination request to be processed.

 Uniform Residential Loan Application (FNMA Form 1003)

 A commitment letter from the appropriate lending institution detailing the

amount, rate, term.

 Underwriting and Transmittal Summary (FNMA Form 1008).

 A copy of the most recent Loan Estimate and Closing Disclosure worksheets &

Title report

 A copy of the Appraisal instrument used by the lender in making their decision.

 Evidence of the outstanding balances of all liens on the property with the

exception of the City of Boston’s lien, and evidence of the interest rates

associated with those liens (include payoff statements).

(Cash Out Requests Only)

 (Home Improvements) Copy of Contractor Estimate

 (Home Improvements) Notarized ISD Certification Letter

**The city of Boston WILL NOT subordinate for cash-out debt consolidation of revolving debt.**

** Requests WILL NOT be processed if any of the above information is missing from the request**

Please forward completed documentation to:

DEPARTMENT OF NEIGHBORHOOD DEVELOPMENT

Office of Loan Management

26 Court Street, 11

floor

Boston, MA 02108

Fax: (617) 635-0262

Email: Loans.dnd@cityofboston.gov

Please include on Subject Line: Subordination Request

Questions may be directed to 617-635- LOAN (5626)

SUBORDINATION APPLICATION

Rev. 7/1/20

APPLICATION FOR SUBORDINATION

Homeowner(s) Name(s): ____________________________________Date Requested_______________

Property Address: _____________________________________________________________________

Day Phone: ______________________________ Evening Phone: _________________________

City’s Mortgage Amount: ___________________ Date Executed: __________________________

Date Recorded: _____________________ Recorded in Book________________ at Page ____________

If Registered Land, Document #____________________ and Certificate of Title #___________________

Please provide the following information:

Mortgage Amount: ____________ Outstanding Balance: ____________ Interest Rate: ___________

Fees ($ amt. and type) ex. Pre-payment penalties _____________________________________________

New Loan Information

New Loan Amount: ___________ Rate Expiration Date ___/___ /___ Estimated Closing Date: ___/___ /___

Terms: __________________ Interest Rate: ____________

Appraised Value of Property: $________________ Appraisal supplied by: _________________________

If you are applying for a home equity/improvement loan, please provide the following information:

Amount applied for: _______________________ Interest rate, terms, cap.: _______________________

DESCRIPTION OF HOW MONEY WILL BE USED: ______________________________________

_____________________________________________________________________________________

The following mortgage(s) will be superior to the City’s mortgage after subordination:

Exact Name of Lender (Mortgagee): _____________________________________________________

New Lender Contact Name: _____________________________________Phone #: ________________

Closing Attorney and/ or Paralegal for Lender: ______________________Phone #: ________________

Fax #: __________________

Borrower Signature: ________________________ Borrower Printed Name__________________ __/__ /__

Co-Borrower Signature: _____________________ Co-Borrower Printed Name_________________ __/__ /__

Rev. 7/1/20

The Department reviews requests for subordination on an individual basis. There is no guarantee that requests

for subordination will be granted—please check the Terms and Conditions of your loan. (NOTE: Additional

documents may be required.)

DEPARTMENT OF NEIGHBORHOOD DEVELOPMENT

SUBORDINATION POLICIES & PROCEDURES

***IN ORDER TO AVOID EXTENSION FEES AND OTHER CHARGES, OR LOSE YOUR

RATE, IT IS RECOMMENDED THAT NO LOAN CLOSINGS BE SCHEDULED UNTIL YOU

RECEIVE YOUR SUBORDINATION AGREEMENT***

Please be advised that under the terms and conditions of the City of Boston,

Subordinations may be allowed in very limited situations.

SUBORDINATION POLICY

Policy Statement

The City of Boston is not legally required to agree to subordinate its mortgage to any new

financing proposals. However, upon written request, the City may consider the subordination of

its mortgage(s) for refinancing proposals that will not seriously impact the affordability of the

property or security of the public investment. **The city of Boston WILL NOT subordinate for

cash-out debt consolidation of revolving debt.**

Policy

Single Family Properties (1-4 family, owner occupied)

For those City mortgages without subordination clauses, the policy to grant subordinations is

based on the following criteria:

1. Receipt of a completed Application for Subordination.

2. The total mortgage debt, including the City's mortgage, does not exceed 85% of the

appraised value of the property.

3. Lenders must show a reasonable belief that the borrower has the ability to repay the loan

before the lender can make it. The ability to pay back the loan is defined as: the

borrower's scheduled monthly payments, including principal, interest, taxes, insurance

and assessments, combined with the scheduled payments for all other debt, do not exceed

50% of the borrower's monthly gross income.

4. Lenders may not include financing of excessive points and fees.

5. It is the general policy of the City of Boston to not subordinate our loans or liens for the

purposes of Cash Out unless there are extenuating circumstances. For example

emergency home repairs, medical expenses or other unexpected expenses . If your

Application for Subordination includes a Cash Out mortgage the processing time for your

application falls under exception processing and may take up to 21 business days to

complete.

6. Loan must be a Fixed Rate Mortgage (FRM); Adjustable Rate Mortgages (ARM) are not

eligible for Subordination.

Rev. 7/1/20

The City of Boston will review Subordination requests only once in a two year time

period, unless it will substantially lower the borrower's rate.

Investor Owned, Large Residential Real Estate Loan Subordination and Restructure policy

No cash proceeds restructures, primarily rate reductions

For requests that simply reduce the interest rate and does not negatively affect the potential cash

flow to DND the following procedure is in effect.

1. The borrower and all related entities shall be current on their loans, taxes and financial

reporting prior to considering the request.

2. DND may require that the units be inspected to ensure compliance with HQS or physical

standards as may be required in the loan documents, any expenses incurred shall be the

responsibility of the owner.

3. DND may allow reasonable increases to reserves made from increased cash flow

resulting from interest rate reductions.

4. The borrower shall pay all costs of the subordination, including a full review and

modification of existing DND documentation by DND's outside attorney. An estimate of

the cost shall be provided when the request is submitted. A deposit against this estimate

may be required with the balance due at closing.

Restructures that generate cash to the project

For requests that refinance the first mortgage or other debt senior to DND and involve an

increase in the amount of debt that is senior to DND the following procedure is in effect:

1. All proceeds from the transaction must be used to make capital improvements to the

subject asset.

2. The borrower and all related entities shall be current on their loans, taxes and financial

reporting prior to considering the request.

3. DND may require that the units be inspected to ensure compliance with HQS or physical

standards as may be required in the loan documents, any expenses incurred shall be the

responsibility of the owner.

4. The borrower shall pay all costs of the transaction, including a full review and

modification of existing DND documentation by DND's outside attorney. An estimate of

the cost shall be provided when the request is submitted to DND. A deposit against this

estimate may be required with the balance due at closing.

5. A full review of the effect of the proposal will be done in conjunction with the housing

division.

6. An attempt will be made to generate additional years of affordability for the project.

7. DND may require that the repayment terms on its loan be modified or that cash flow

definitions be modified.

8. Loan to value after the refinance (for the first mortgage) should not exceed 85%