Mortgage Glossary
Subordinate Financing
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Subordinate financing is any loan secured by the property that ranks behind the first mortgage in lien priority.
What Subordinate Financing means
Second mortgages, HELOCs, and down payment assistance liens are subordinate. The lender of the first mortgage must approve subordinate financing on a purchase or refinance.
Florida example
A Florida buyer pairs a first mortgage with a subordinate DPA second from Hometown Heroes. The DPA lien sits behind the first, so the primary lender approves it as part of the structure.
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