source:
  type: guide
  id: fnma-sel-b3-6-04
  authority: Fannie Mae Selling Guide B3-6-04 — Qualifying Payment Requirements
  description: Fannie Mae Selling Guide B3-6-04 — Qualifying Payment Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-6-04-full
  canonical_id: fnma-sel-b3-6-04-full
  section: Fannie Mae Selling Guide B3-6-04 — Qualifying Payment Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-6-04 — Qualifying Payment Requirements
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'B3-6-04, Qualifying Payment Requirements (02/07/2024) Introduction
      This topic contains information on determining the borrower’s monthly PITIA
      used for qualifying purposes, including: Qualifying Payment Amount Additional
      Information About ARM Qualifying for DU Loan Caseﬁles Qualifying Payment Amount
      The calculation of the qualifying payment amount for the subject property will
      diﬀer based on the transaction type (as shown in the following table). For all
      loans, the qualifying rate is based on the original loan amount and the loan
      amortization term. These policies apply to both manually underwritten loans
      and DU loan caseﬁles. In all cases, qualiﬁcation must consider the borrower''s
      current obligations and other mortgage-related obligations, e.g. PITIA. Loans
      subject to temporary interest rate buydowns must be qualiﬁed without consideration
      of the bought-down rate, based on the transaction type below. Qualifying Interest
      Rate Requirements Transaction Type DU and Manual Underwriting Fixed-rate mortgages
      Note rate Published May 6, 2026 503 Qualifying Interest Rate Requirements Transaction
      Type DU and Manual Underwriting ARMs with initial ﬁxed-rate period of three
      years or less The maximum interest rate that could apply during the ﬁrst ﬁve
      years after the ﬁrst payment is due. ARMs with initial ﬁxed-rate period of ﬁve
      years Greater of • the maximum rate that could apply during the ﬁrst ﬁve years
      after the ﬁrst payment date (note rate plus ﬁrst rate change cap), or • the
      fully indexed rate ARMs with an initial ﬁxed-rate period of greater than ﬁve
      years • No less than note rate Exception: Greater of the note rate or the fully
      indexed rate for loans that are higher-priced mortgage loans or higher-priced
      covered transactions under Regulation Z. If the fully indexed rate is higher,
      the loan must be manually underwritten. Additional Information About ARM Qualifying
      for DU Loan Caseﬁles For DU loan caseﬁles, the fully indexed rate is deﬁned
      as the index plus the margin as entered in the online loan application. The
      index and margin are required for all ARM loans submitted to DU. The following
      table describes how DU applies the qualifying interest rate requirements based
      on the DU ARM Plan that is submitted in the online loan application. ARM Type
      (Initial Adjustment Period) DU ARM Plan Standard Index Type DU Qualifying Rate
      1-Year ARMs (12 months) FM GENERIC, 1 YR, 1% ANNUAL Cap NA Note rate plus 5%
      1-Year ARMs (12 months) FM GENERIC, 1 YR, 2% ANNUAL Cap NA Note rate plus 6%
      3-Year ARMs (36 months) FM GENERIC, 3 YR 3 year SOFR (2/1/5) Note rate plus
      5% 5-Year ARMs (60 months) FM GENERIC, 5 YR 5 year SOFR (2/1/5) Greater of fully
      indexed rate or note rate plus 2% 7 and 10-Year ARMs (84 and 120 months respectively)
      FM GENERIC, 7 YR FM GENERIC, 10 YR 7 year SOFR (5/1/5) 10 year SOFR (5/1/5)
      Note rate Any Submission of an ARM plan number that is not recognized by DU
      (referred to as "Lender ARM Plan") NA • Qualifying rate entered in the ARM Qualifying
      Rate ﬁeld in DU • For ARMs with an initial ﬁxed rate period greater than ﬁve
      years, if the lender wants to use an interest rate higher than the note rate
      to qualify the borrower, the higher rate must be entered in the ARM Qualifying
      Rate ﬁeld in DU and the Lender ARM Plan must be used. • If the ARM Qualifying
      Rate ﬁeld is not entered, DU will use the note rate plus 5% Recent Related Announcements
      The table below provides references to recently issued Announcements that are
      related to this topic. Published May 6, 2026 504 Announcements Issue Date Announcement
      SEL-2024-01 February 07, 2024 Announcement SEL-2023-05 June 07, 2023 Announcement
      SEL-2022-03 April 06, 2022 Announcement SEL-2021-08 September 01, 2021'
  judgment: false
