16.10 ACCEPTABLE LIEN POSITION (01/27/17)

The guaranteed loan must have first lien position at closing; however, the lender may permit liens junior to the guaranteed loan as long as:

The lien will not interfere with repayment of the loan and has been considered in the underwriting process;
The total value of all liens on the property is less than or equal to the property’s market value, except when a “soft-second” for down payment or closing costs assistance creates the overage; and
The junior lien is for an authorized loan purpose.