Escrow accounts are required and cannot be waived on FHA (Federal Housing Administration), GRH (Guaranteed Rural Housing) or VA (Veteran Affairs) loans.
Escrow accounts on other types of loans, such as Fannie Mae or Freddie Mac loans, may be waived if certain conditions are met. Some basic conditions to determine eligibility for escrow waivers are:
- The loan-to-value ratio of your loan must be 80 percent or less.
- There have not been any payments over 30 days late in the last 12 months.
- Loan is not in a Special Flood Hazard Area (SFHA).
- The loan cannot be in foreclosure, bankruptcy, or loss mitigation.
Note: If all conditions are met on a loan with required flood insurance, all escrows may be waived except for the flood insurance. Other conditions and requirements may apply; however, if the above conditions are met, please reach out to the new servicer regarding removal options.