Refinance question - I have an SBA Katrina loan against my house.

Contact SBA and ask them if they will consider a subordination. It means that the SBA will agree to move to a less secure position behind your new refinanced first mortgage as opposed to assuming 1st position when the current first is paid off. I have had multiple people try this and at first SBA would not do it, but I have heard they are agreeing to subordinate now. Either your Atty or the company you refi with will prepare the agreement,SBA will need to review it. This will add a month to your closing so you will need a 60 day lock at minimum. If you are currently dealing with a company who didn't suggest this, then you need a new company.