Currently in ConformX the property value used in the calculation of the LTV (which is then used to determine UFMIP and Annual MIP rates and duration) is determined in the following manner for FHA 203(k) loans:
1) Use “Stated Property Value for LTV and MIP/PMI” (Field 49924) in the LTV calculation if it has a value.
2) If “Stated Property Value for LTV and MIP/PMI” is empty and the Loan Purpose is a Refinance, use “Value After Improvements” (Field 49077) if it has a value, otherwise use “Appraised Value” (Field 150).
3) If “Stated Property Value for LTV and MIP/PMI” is empty, and the Loan Purpose is a Purchase, use the lesser of the following:
- “Value After Improvements” (or “Appraised Value” if “Value After Improvements” does not have a value).
- “Sales Price” (Field 1790) plus total 203(k) rehabilitation costs. 203(k) rehabilitation costs is either “Rehabilitation Loan – Total Cost (Line B-14)” (Field 42384) or “203k Total Rehabilitation Cost” (Field 49118).
The establishment of a new 203(k) loan-to-value (LTV) ratio calculation for Mortgage Insurance Premiums is outlined in new FHA Single Family Handbook 4000.1 Pt. II.A.8.a.xiii as follows:
“Mortgage Insurance Premium
The Mortgagee must comply with the MIP requirements found in the MIP Chart.
For the purpose of calculating the LTV for application of the MIP, the Mortgagee must divide the Base Loan Amount by the After Improved Value.”
A temporary set of field mappings will be applied to FHA 203(k) loans with “FHA Case Number Assignment Date” (Field 42450) on or after September 14, 2015, to set the “Stated Property Value for LTV and MIP/PMI” (Field 49924). If “Stated Property Value for LTV and MIP/PMI” is empty, it will be set to:
1) “Value After Improvements” (Field 49077) if “Value After Improvements” has a value.
2) “Appraised Value” (Field 150) if “Value After Improvements” is empty.
The field mappings on “Stated Property Value for LTV and MIP/PMI” for FHA 203(k) loans with “FHA Case Number Assignment Date” on or after September 14, 2015, will be applied in ConformX the evening of September 13, 2015. Please note the new logic will be applied if the “FHA Case Number Assignment Date” is not set. A future software release will incorporate the FHA 203(k) property value changes directly into ConformX. If you have any questions or concerns about these changes, please contact Client Support at 1.800.497.3584.
September 9, 2015
TW 122970