Selling Guide

Published August 29, 2017

B5-1-01: High-Balance Mortgage Loan Eligibility and Underwriting (02/23/2016)

This topic contains loan eligibility and underwriting information on high-balance mortgage loans, including:

Loan Limits

The high-balance loan requirements apply to mortgage loans with original loan amounts meeting the high-cost area loan limits established by the Federal Housing Finance Agency. Fannie Mae publishes on its website the maximum high-cost area loan limits that may apply by state (or territory); however, specific loan limits are established for each county (or equivalent) and may be lower for each specific high-cost area. Refer to Loan Limits for Conventional Mortgages for additional information, including the loan limits for each area.

Lenders are responsible for ensuring that the original principal balance of each mortgage loan does not exceed the applicable maximum loan limit for the specific area in which the property is located. To assist lenders in determining the applicable limits, Fannie Mae posts reference material on its website, including the Loan Limit Geocoder, which lenders can use to look up loan limits based on a specific address (or batch of addresses).

Loan Eligibility and Underwriting Requirements

High-balance mortgage loans must meet all standard Fannie Mae eligibility and underwriting requirements, as outlined in this Selling Guide, except as noted in this section. The following guidelines apply to all high-balance mortgage loans:

  • Loans must be conventional first-lien mortgages only.

  • Loans must meet the LTV, CLTV, and HCLTV ratios as outlined in the Eligibility Matrix.

  • All borrowers must have a credit score.

  • All loans must be underwritten through DU.

For additional eligibility information, see the Eligibility Matrix. For information about loan delivery, see B5-1-02, High-Balance Pricing, Mortgage Insurance, Special Feature Codes, and Delivery Limitations.

Note: Unless otherwise notified by Fannie Mae, existing variances in a lender's Master Agreement apply to high-balance mortgage loans; however, the more restrictive of the eligibility requirements of this section or the lender’s variance will apply.

DU Refi Plus and Refi Plus

High-balance mortgage loans are eligible for DU Refi Plus and Refi Plus. The eligibility and appraisal requirements specific to DU Refi Plus and Refi Plus supersede all requirements that apply to high-balance mortgage loans. See B5-5.2-01, DU Refi Plus and Refi Plus Eligibility, for additional information.

Appraisal Requirements

In addition to the standard Selling Guide or DU fieldwork requirements, a One-Unit Residential Appraisal Field Review Report (Form 2000) or a Two- to Four-Unit Residential Appraisal Field Review Report (Form 2000A), is required if the property is valued at $1,000,000 or more and the LTV, CLTV, or HCLTV ratio is greater than 75%. A Field Review is required to ensure that the appraisal is an accurate representation of value. If the Field Review results in a different opinion of value than the appraisal, the lowest of the original appraised value, the Field Review value, or the sales price (for purchases) should be used to calculate the LTV ratios.

Related Announcements

The table below provides references to the Announcements and Release Notes that have been issued that are related to this topic.

Announcements and Release Notes Issue Date
Announcement SEL-2016–02 February 23, 2016
Announcement SEL-2015–10 September 29, 2015
Announcement SEL-2013–01 January 17, 2013
Announcement SEL-2012–07 August 21, 2012
DU Version 9.0 July 24, 2012
Announcement 09-08R June 8, 2009
Announcement 08-27 October 16, 2008