Need to Subordinate Your Loan?

The North Carolina Housing Finance Agency offers subordinations for many of our loan products. Below are some general guidelines:

  • A processing fee of $250 is required and will not be refunded if the subordination is not approved.
  • Loans may only be subordinated once and subsequent refinances require the loan to be paid in full.
  • NCHFA will begin review and approval of the subordination once the $250 and completed package are received.
  • NCHFA will not subordinate to a cash-out refinance or HELOC unless the Agency loan terms are forgiven. See certain exceptions below.
  • Property must be occupied as the borrower’s primary principal residence.

Specific Loan Type Guidelines

NC Home Advantage MortgageTM

  • The 3%, 5%, $8,000 and $15,000 down payment assistance loans cannot be subordinated until seven (7) years from the date of closing. 

FirstHome Mortgage

  • The Statewide Down Payment Assistance (SWDAP) loan is available for subordination.

Community Partners Loan Pool (CPLP) and other balloon loans

Subordinations are only allowed in the case of a refinance of the first mortgage. CPLP and other balloon loans will not subordinate to other liens including home equity liens. Subordinations may be considered in two circumstances:

  1. If the refinance of the first mortgage reduces the total monthly payment and has a lower interest rate than the initial first mortgage, subordination is allowed. Terms must not exceed the maximum CPLP term and the refinanced loan must be a fixed-rate amortizing loan. The overall financial impact of the proposed refinance must be financially beneficial to the borrower (i.e., not forcing the borrower to refinance a forgiving loan to qualify).
  2. A subordination is not allowed for “cash-out” refinances for other expenses (i.e., refinancing other debts, updating the kitchen, etc.) unless the borrower(s) can document that all the additional debt refinanced into the proposed first mortgage will be immediately used to address housing-related threats. To be considered, the health, safety, or structural threats need to be severe enough that the household would no longer be able to safely occupy the property if not addressed.

Subordination Process and Requirements

Please review the list above to determine whether your loan is eligible for a subordination. The completed subordination request packet must be submitted by the refinancing lender.

Thank you for your request for a subordination. Please provide the NCHFA with the following information:

  1. A completed “Request for Subordination” form signed by all borrowers on the Agency loan.
  2. Borrower’s Loan Application - Form 1003.
  3. Completed W-9 for each borrower on the Agency loan.
  4. FedEx or UPS Mailing Label for return documents.
  5. Verification of Non-Occupancy form if active military (copy of military orders).
  6. If the borrower is refinancing as a result of a divorce or death of spouse. The Agency will need a
    divorce decree or a death certificate.
  7. Please include a check for the $250 processing fee (no personal checks).

To avoid delays in processing your subordination request, please verify that the new loan amount on the Agency’s “Request for Subordination” form equals the loan amount on Form 1003 prior to submitting your subordination package.

Prior to submitting your completed subordination package, please ensure all sections are completed in their entirety. The majority of delays are caused by incomplete forms, missing documents and missing $250 processing fee. 


A complete subordination package can be submitted to the Agency via one of the following options:

  • E-mail to @email.
  • Mail to North Carolina Housing Finance Agency, Attention: Subordinations, 3508 Bush Street, Raleigh NC 27609.

Response Time

The review process to determine approval or denial of your request can take up to 10 business days. Keep in mind that incomplete or missing documentation will extend the review and approval timeframe. If your subordination is approved, the Agency will mail an unrecorded version of the Subordination Agreement to the person and/or organization on the shipping label. This process can take up to 10 business days. Additional questions about your subordination request can be emailed to @email.