FAQ: How is the Max Loan Amount per LTV Limit Calculated?

Modified on Sat, 26 Apr at 12:39 PM

Q: How does Charlie calculate the maximum loan amount per LTV Limits?

A: Charlie calculates the maximum loan amount primarily using two key factors:

Loan-to-Value (LTV) Limit: The highest LTV ratio allowed based on loan type, property type, and occupancy.
Appraised Value or Purchase Price: The lower of these two values is used for the calculation.

Formula:

For refinances, Charlie uses Appraised Value only. For purchases, it uses the lower of Appraised Value or Purchase Price.

The LTV limit is then determined based on the following parameters:

Loan Type (e.g., Conventional, FHA, VA, USDA)
Property Type (e.g., Single Family, Condo, 2-4 Units)
Occupancy Type (e.g., Primary Residence, Second Home, Investment Property)

Charlie references pre-set eligibility grids for each loan program. These grids define LTV caps based on property and occupancy combinations and align with agency guidelines:

FNMA: https://singlefamily.fanniemae.com/media/20786/display

FHLMC: https://sf.freddiemac.com/general/maximum-ltv-tltv-htltv-ratio-requirements-for-conforming-and-super-conforming-mortgages

Gov't Loan Table in Charlie:

LTV Limits by Rule Group

Rule Group	Conditions	LTV Limit
1. FHA Rate and Term	[Mortgage Type] = FHA AND [Refinance Type] = Full Documentation AND [Refinance Cash Out Determination Type] = Limited Cash Out
	- Occupancy = Primary AND Ownership Time < 12 months AND Occupied Since Purchase	97.75%
	- Occupancy = Primary AND Ownership Time < 12 months AND NOT Occupied Since Purchase	85%
	- Occupancy = Primary AND Ownership Time > 12 months AND Occupied Since Purchase OR Primary ≥ 12 months	97.75%
	- Occupancy = Primary AND Ownership Time > 12 months AND NOT Occupied Since Purchase OR Primary ≥ 12 months	85%
	- Occupancy = Second Home	85%
	- Occupancy = Investment OR Never Occupied	0%
	Note: If Never Occupied, LTV is always 0%, regardless of occupancy or ownership time.
2. FHA Simple	[Mortgage Type] = FHA AND [Refinance Type] = Simple
	- Occupancy = Primary	97.75%
	- Occupancy = Second Home	85%
	- Occupancy = Investment	0%
3. VA Loans	[Mortgage Type] = VA
	- Existing Amortization = Fixed, New Amortization = Adjustable, and Discount Points > 1%	90%
	- All Other VA Loans	100%
4. FHA Cash Out	[Mortgage Type] = FHA AND [Refinance Type] = Full Documentation AND [Refinance Cash Out Determination Type] = Cash Out	80%

Can I Override the LTV Limit in Charlie?

No, LTV limits are system-controlled based on loan program guidelines and cannot be manually overridden. However, loan officers can adjust:

Loan Amount
Loan Program

Charlie will recalculate the LTV and confirm if the new setup remains within the acceptable limit.