4155.1 REV-4 ___________________________________________________________________________ SUPPLEMENTAL MORTGAGE CALCULATION WORKSHEETS Due to space limitations, the Mortgage Credit Analysis Worksheet (HUD-92900-WS) does not always lend itself to every possible mortgage calculation situation. Although the HUD-92900-WS must be completed for every loan submitted to HUD for mortgage insurance, the following supplemental worksheets have been designed to assist lenders and HUD Field Office staff to correctly determine the maximum mortgage amount for nearly all situations. Several completed sample worksheets have also been included in this section. (If shown with a number, it refers to the mortgage calculation example number in Appendix II.) These supplemental worksheets do not take the place of the HUD-92900-WS and need not be submitted with the loan application. ___________________________________________________________________________ III-1 6/92 ___________________________________________________________________________ 4155.1 REV-4 ___________________________________________________________________________ MORTGAGE CALCULATION/CASH INVESTMENT REQUIREMENTS WORKSHEET INSTRUCTIONS Items that are to be added, subtracted, or multiplied are indicated on the worksheet. Several line items under "Acquisition Costs" must also be entered in the "Cash Requirements" column. The HUD-92900-WS must still be completed even if this worksheet Is used. VALUE refers to the appraised value of the property. MAXIMUM LTV varies according to the value of the property, its occupancy status, and stage of construction. See HUD Handbook 4155.1 Rev-4, 1-6(b). 97% if mortgage basis < $50,000, owner-occupied, proposed and existing 97/95 if mortgage basis > $50,000, O-O, proposed and existing construction (97% of first $25000; 95% of the remainder above $25000) 90% if property under construction or less than one year old, Owner-Occup. 85% for eligible secondary residences. SALES PRICE Is the actual contract sales price of the property, including any addenda to the contract, without any adjustments for concessions. REPAIRS/IMPROVEMENTS includes only the amount for which the borrower is responsible. (See 4155.1 Rev-4, paragraph 1-7(A)(2).) OTHER would include energy related weatherization items, etc. PERSONAL PROPERTY must also be subtracted from the appraised value if not previously done so by the appraiser. Also see 4155.1 Rev-4, para, 1-7(B)(1)(b). FINANCING > 6% The amount that must be subtracted from the sales price based on the Attachment "A" (to the HUD-92900-WS) calculations. OTHER CONCESSIONS include seller-paid prepaid items, excess rent credit, decorating allowances, etc. (See 4155.1 Rev-4, paragraph 1-7(B).) TAC (total acquisition cost) Is the total expense to the purchaser. It reflects the sales price plus 1 00% of closing costs minus any cash contributions from the seller. Prepaid items, borrower-paid discounts points, etc., are not included. CLOSING COSTS do not Include discount points, prepaid items, etc. If the lender pays all closing costs by charging a premium interest rate, this amount will equal $0. ___________________________________________________________________________ 6/92 III-2 _____________________________________________________________________ 4155.1 REV-4 __________________________________________________________________________ MORTGAGE CALCULATION/CASH INVESTMENT REQUIREMENTS WORKSHEET __________________________________________________________________________ III-5 6/92 _____________________________________________________________________ 4155.1 REV-4 ___________________________________________________________________________ REFINANCE "SHORTCUT" WORKSHEET As a check when calculating a no-cash back refinance mortgage, the procedure described below may be used. This methodology allows you to determine the total mortgage amount first, then calculate the amount of discount points (which are on the entire mortgage amount) and the Upfront MIP (calculated on the mortgage amount excluding MIP). (Appraised value limits may also apply. See Chapter 1.) First, determine the unpaid principal balance, subtract any MIP refund if appropriate, add the amount of any junior liens eligible to be included in the new mortgage amount, plus any eligible repairs required by the appraiser. This sum is then divided by the appropriate factor shown below. For example, the unpaid principal balance and allowable percentage of closing costs total $50,000. Two discount points will be charged on the loan. The $50,000 sum is divided by 0.94339, which equals $53,000 (total mortgage amount). Proof: $53,000 x 0.02 (Disc. pts.) = $1060; $50,000 + 1060= $51,060 x 0.038 (UFMIP) = $1940. The sum of $50,000 (unpaid debt and closing costs), $1060 in discount points, and $1940 in Upfront MIP= $53,000. DISCOUNT POINTS/UFMIP FACTOR FOR REFINANCES* Disc. Pts. 3.8% (FY '92) 3.0% (FY '93-94) 2.25% (FY '95) 0. .96339 .97087 .97800 0.25 .96089 .96837 .97550 0.50 .95839 .96587 .97300 0.75 .95589 .96337 .97050 1. .95339 .96087 .96800 1.25 .95089 .95837 .96550 1.50 .94839 .95587 .96300 1.75 .94589 .95337 .96050 2. .94339 .95087 .95800 *Minor adjustments may be required due to rounding. ___________________________________________________________________________ WORKSHEET (1) $ ______________ Debt Proof: (2) + $ ______________ Est.CC (7) Mort(6) x ____ Pts.= $ _______ (3) + $ ______________ Other (8) Sum (4) + Pts (7) = $ _______ (4) = $ ============== Sum (9) (8) X MIP %_____ = $ _______ (5) Div. by __________ Factor (10) Sum of Lines 8+9 = $ _______ (6) = $ ============== Total Mort No. 10 should equal No. 6 ___________________________________________________________________________ 6/92 III- 6 _____________________________________________________________________ 4155.1 REV-4 ___________________________________________________________________________ REFINANCE MAXIMUM MORTGAGE WORKSHEET (No-Cash Back Refinances WITH Appraisals) _________________________________________________________ 1. APPRAISED VALUE ONLY (No Closing Costs Added) $ _____________ Appraised Value x 97.75% (Use 98.75% if Value < $50,000) =$ _____________ Maximum Mortgage (1) BEFORE UFMIP _________________________________________________________ 2. APPRAISED VALUE PLUS ALLOWABLE CLOSING COSTS $ _____________ Appraised Value + 57% of Allowable Closing Costs = _____________ Mortgage Basis x 97/95% 97% of first $25,000; 95% of remainder =$ _____________ Maximum Mortgage (2) BEFORE UFMIP _________________________________________________________ 3. EXISTING DEBT PLUS ALLOWABLE* ADDITIONAL ITEMS * Indicates items Not eligible on streamline refinances. $ _____________ Unpaid Principal Balance - _____________ MIP Refund, if applicable + _____________ Subordinate liens* seasoned at least 1 year + _____________ Repairs* required by the appraiser + _____________ All closing costs + _____________ Reasonable Discount Points =$ _____________ Maximum Mortgage (3) BEFORE MIP MAXIMUM MORTGAGE BEFORE UFMIP IS LOWEST OF (1), (2), OR (3) ___________________________________________________________________________ III-7 6/92 _____________________________________________________________________ 4155.1 REV-4 __________________________________________________________________________ REFINANCE MAXIMUM MORTGAGE WORKSHEET __________________________________________________________________________ III-9 6/92 _____________________________________________________________________ 4155.1 REV-4 ___________________________________________________________________________ Streamline Refinance, No Appraisal 3. EXISTING DEBT PLUS ALLOWABLE* ADDITIONAL ITEMS *Indicates items Not eligible on streamline refinances. $ 78,000 Unpaid Principal Balance - 1,950 MIP Refund, if applicable + 0 Subordinate liens* seasoned at least 1 year + 0 Repairs* required by the appraiser + 2,700 All closing costs + 1,669 Reasonable Discount Points =$ 80,419 Maximum Mortgage (3) BEFORE MIP $80,419 X 1.038 = $83,475 Total Mortgage In this example, the total mortgage amount is $83,475. The total amount of UFMIP is $3055.92 even though only $1105.92 will actually be transmitted to HUD ($3055.92 minus the refund of $1950). The refund amount is subtracted from the unpaid principal for mortgage calculation purposes only (the lien holder still must be paid in full). Always calculate the total amount of UFMIP, even if only a portion will be paid to HUD, otherwise, the new mortgage will be insufficient to pay all expenses. See the following example: $83,475 TOTAL MORTGAGE AMOUNT -78,000 Existing First Lien - 2,700 Closing Costs - 1,669 Discount Points _______ = 1,106 To HUD ($3056 MIP minus $1950 refund) Neither closing costs nor discount points need be reduced to 57 percent for inclusion in the mortgage amount (provided the calculated mortgage amounts predicated on the property's value are greater than the amount based on total payoff). ___________________________________________________________________________ 6/92 III-10 --------------------------------------------------------------------------------