Selling Guide

Published November 03, 2021

For best results, pose your search like a question.

Guide Resources

For a comprehensive list of resources such as forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

Customers Recommend Ask Poli

AskPoli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Launch Ask Poli  

Download PDF Guide

You can also download the printable 1,200+ page PDF, which include links.

Download Now

What are the MI requirements in New York state?

LTV Ratio Determination in New York State

Under a New York statute, a mortgage insurer must issue mortgage insurance based on a determination of the “fair market value” of the property. The term “fair market value” is not defined in the statute, but has been defined by the New York insurance regulator as being the “appraised value.” Per the statute, for co-op properties, the issuance of mortgage insurance must be based on the “purchase price of the ownership interest and the proprietary lease.” 

As a result, the determination of value for properties in New York is different from Fannie Mae’s standard definition of value that is used to calculate the loan-to-value (LTV) ratio. The following table identifies the value calculation that is to be used for mortgage loans secured by properties in New York for policies that are based on the LTV ratio.

LTV Ratio Calculation Policy
LTV ratio based on the appraised value for non-co-op properties
  • Lenders must base their determination of when mortgage insurance is required solely on the appraised value of the property. If the appraised value of the property exceeds the sales price, this determination may result in mortgage insurance not being placed on a mortgage loan as would otherwise be required using Fannie Mae’s standard definition.

  • If this calculation results in mortgage insurance not being placed on the loan where mortgage insurance would otherwise have been required using Fannie Mae’s standard definition, the lender must deliver the loan to Fannie Mae using the MI Absence Reason Type of “No MI Based On Original LTV” (Sort ID 429).

LTV ratio based on the sales price for co-op properties
  • For purchase transactions, lenders must base their determination of when mortgage insurance is required solely on the sales price for the co-op property. If the sales price of the property is more than the appraised value, this determination may result in mortgage insurance not being placed on a mortgage loan as would otherwise be required using Fannie Mae’s standard definition.

    Note: For purchase transactions when the co-op property is subject to resale restrictions that terminate automatically upon foreclosure and the appraised value exceeds the sales price, lenders may use the appraised value of the property without resale restrictions, rather than the sales price when determining when mortgage insurance is required. For additional information on calculating LTV ratios on loans with resale restrictions, see B5-5.2-03, Loans with Resale Restrictions: Underwriting and Collateral Considerations.

  • If this calculation results in mortgage insurance not being placed on the loan where mortgage insurance would otherwise have been required using Fannie Mae’s standard definition, the lender must deliver the loan to Fannie Mae using the MI Absence Reason Type of “No MI Based On Original LTV” (Sort ID 429).

LTV ratio based on the appraised value for refinances of co-op share loans
  • Lenders must base their determination of when mortgage insurance is required for a refinance transaction for co-op share loans solely on the appraised value.

LTV ratio based on the lower of the sales price or appraised value (standard LTV ratio calculation) for all property types
  • Irrespective of the use of appraised value or sales price for determining whether mortgage insurance is required, this standard LTV ratio calculation must be used to determine the level of mortgage insurance coverage that is required on the mortgage loan. See B1-1-01, Contents of the Application Package, and B7-1-02, Mortgage Insurance Coverage Requirements, for additional information.

  • The standard LTV ratio calculation must also be used

    • to determine whether the loan satisfies any of Fannie Mae’s other eligibility criteria that are based on the LTV ratio of the loan;

    • to determine any loan-level price adjustments derived from Fannie Mae’s pricing matrix that includes LTV ratios or CLTV ratios as a risk attribute in its lookup table; and

    • when the loan is delivered to Fannie Mae (Sort ID 254). (The standard LTV ratio must be delivered even if the appraised value or sales price is used to determine that mortgage insurance coverage is not required.)

For additional information, see B7-1-01, Provision of Mortgage Insurance.

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing
Guide
content.

Try Ask Poli

Related Articles


AskPoli

Customers Recommend Ask Poli

If you have additional questions, Fannie Mae customers can visit Ask Poli to get information from other Fannie Mae published sources.

Guide Resources

For a comprehensive list of resources such as access forms, announcements, lender letters, notices and more.

Visit Selling and Servicing Guide Communications and Forms

X
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.
     

Email Us
If you still have Technical Support questions, feel free to emailAsk_Poli@fanniemae.com.