Selling Guide

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B7-1-02, Mortgage Insurance Coverage Requirements (08/07/2019)

Introduction

This topic contains information on mortgage insurance coverage requirements for first-lien mortgage loans.


Mortgage Insurance Coverage Requirements

The table below provides the mortgage insurance coverage requirements for first–lien mortgages. For certain transactions, Fannie Mae offers two mortgage insurance coverage level options: standard coverage for the transaction type (noted with ^) and minimum coverage (noted with *) with corresponding LLPAs. Lenders who choose less than standard coverage (but no lower than minimum coverage) will be assessed an LLPA based on the LTV ratio and representative credit score for the mortgage loan. The minimum mortgage insurance LLPAs can be found in the Loan-Level Price Adjustment (LLPA) Matrix, and are in addition to any other LLPAs that may apply to the transaction.

Mortgage Insurance Coverage Requirements
LTV Range
Transaction Type 80.01 – 85.00% 85.01-90.00% 90.01-95.00% 95.01-97.00%
All property types (including MH Advantage) other than standard manufactured homes
Fixed-rate, term ≤ 20 years 6% 12% 16%* + MI LLPA 18%* + MI LLPA
25%^ 35%^
Fixed-rated, term > 20 years All ARMs 6%* + MI LLPA 12%* + MI LLPA 16%* + MI LLPA 18%* + MI LLPA
12%^ 25%^ 30%^ 35%^
HomeReady mortgages: Fixed-rate, term ≤ 20 years 6% 12% 16%* + MI LLPA 18%* + MI LLPA
25%^ 25%^
HomeReady mortgages: Fixed-rate, term > 20 years All ARMs 6%* + MI LLPA 12%* + MI LLPA 16%* + MI LLPA 18%* + MI LLPA
12%^ 25%^ 25%^ 25%^
Standard manufactured homes (not MH Advantage)
Fixed-rate, ARM, any term 6%* + MI LLPA 12%* + MI LLPA 16%* + MI LLPA Not applicable
12%^ 25%^ 30%^
HomeReady mortgages 6%* + MI LLPA 12%* + MI LLPA 16%* + MI LLPA
12%^ 25%^ 25%^

The following additional requirements apply:

  • Mortgage insurance requirements for HomeReady apply when HomeReady and HomeStyle Renovation are combined.

  • The minimum levels (*with an LLPA) are eligible for HomeReady mortgages as indicated; however, the mortgage insurance LLPA will be assessed in all cases regardless of any LLPA limits.

See B7-1-04, Financed Borrower-Purchased Mortgage Insurance, for additional information about mortgage insurance coverage for financed mortgage insurance transactions.

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