Subordination Overview

To request the subordination, please review the conditions below. There are a few special circumstances regarding multifamily properties.  Then provide the required documentation and the non-refundable subordination fee of $375.00.

For Subordination Re-Checks you may need to resubmit some of the required documentation.  The Subordination Re-Checks Fee i $105.00 per occurrence.

Required Documentation

Forward a request via email to the National City Housing Authority that will include the following:

*Label documents by number using an abbreviation of document names listed below. Do not use your own naming conventions. 

1. A written request from the lender for a rate and term refinance with the borrower’s authorization to release information form.
2. A letter signed by the borrower explaining the purpose of the refinance.
3. Copy of all pages of the loan application (1003) signed by the borrower.
4. Copy of the Preliminary Title Report.
5. Certified copy of the escrow instructions referencing the new lender, showing vesting, and the new loan amount. If no escrow is involved in the transaction, a statement from the new lender is required listing the new loan amount, exact vesting for borrower, and name of the lender exactly as it will appear on the loan documents.
6. Copy of the Estimated HUD-1 Settlement Statement
7. Pay-off statement from the existing first trust deed lien holder.
8. Copy of the lender’s Underwriting Transmittal Summary (1008), clearly showing the loan has been approved, the loan amount, interest rate, term of the loan, and the principal and interest payments. The new first trust deed loan must be a fixed rate loan, fully amortized over the life of the loan.

Submittal of Documentation  

Email the requested documents to Angelita Palma, Housing Programs Manager at  apalma@nationalcityca.gov and copy  Housing@nationalcityca.gov.

Subordination Fees 

 A non-refundable subordination fee will be charged for every subordination agreement processed. The fee may be subject to change from time to time. Payment of the fee must be submitted before the subordination is processed.

Subordination Fee — $375.00
Subordination Re-Check Fee - $105.00 (per occurrence)
-  Include check with the Subordination Cover Letter Template (WORD)

Payment can be made in person at City Hall or by mail. When making the payment include the Name of borrower(s) name and address.

City of National City
Attn: Housing Authority
1243 National City Blvd.
National City, CA 91950

Processing Timeline

• Please note that City offices are closed on Fridays, Federal holidays, and the two weeks of he calendar year.
• Be advised that we do not offer expedited services and ask that the lender or escrow submit requests at least 15 days prior to closing.
• The process takes 4-8 business days to complete.

Upon receipt of a complete package staff will review the documentation and pull the file from the offsite location. Staff will draft the Subordination and present the request for subordination to Director of Housing Authority for consideration. If approved, the lender will be notified of any contingencies.

Lender/Escrow

Please be advised that incomplete files will be returned unprocessed and are subject to additional fees upon resubmittal. Missing information and/or missing documents constitute an incomplete file and will be returned unprocessed. Please be sure to submit a “complete” package to avoid delays in the process

Fee Schedule and Updates

City of National City Master Fee Schedule - Adopted 10/3/23 and Effective 12/4/2023 (highlights reflect changes). 

Conditions of Subordination:

A. Subordination of the City of National City’s loan in favor of a new loan in the amount of the current balance of the original senior loan plus reasonable costs of refinancing is acceptable as long as the purpose of the refinance is to lessen the borrower’s monthly financial obligations (debt service) for housing costs, to reduce both the term and interest rate of a loan when the new total payment (principal, interest, taxes, insurance, and homeowner’s association fees) does not exceed 35% of the borrowers total gross monthly income, or when a senior lien becomes due and payable.

B. No subordination will be approved which provides cash or equity being taken from the property (unless the cash is being used to pay reasonable closing costs or to remediate code violations at the property).

C. The City of National City’s loan must be recorded in the same position as when it was originally recorded.

D. City staff will review the new loan application and underwriter’s summary, estimated buyer’s settlement charges and title report to verify compliance with these criteria prior to execution of a subordination document by City.

E. City staff will submit their review and recommendation to the National City Housing Authority Director for final approval or denial of the subordination request.

F. Staff will prepare an annual report to the City Council, City Manager, and Director of Finance that provides information on the new mortgage principal balance, rate, and term that the City assistance loan subordinated to.

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