source:
  type: guide
  id: fnma-sel-b3-4.3-19
  authority: Fannie Mae Selling Guide B3-4.3-19 — Cash Value of Life Insurance
  description: Fannie Mae Selling Guide B3-4.3-19 — Cash Value of Life Insurance.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-4.3-19-full
  canonical_id: fnma-sel-b3-4.3-19-full
  section: Fannie Mae Selling Guide B3-4.3-19 — Cash Value of Life Insurance
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-4.3-19 — Cash Value of Life Insurance
    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: 'B3-4.3-19, Cash Value of Life Insurance (05/27/2014) Introduction
      This topic contains information on the cash value of life insurance, including:
      Cash Value of Life Insurance and Debt-to-Income Ratios Documenting Borrower
      Receipt of Funds Cash Value of Life Insurance and Debt-to-Income Ratios Published
      May 6, 2026 445 Net proceeds from a loan against the cash value or from the
      surrender of a life insurance policy are an acceptable source of funds for the
      down payment, closing costs, and reserves. The lender must assess repayment
      or additional obligation considerations to determine the impact on borrower
      qualiﬁcation or reserves. If penalties for failure to repay the loan are limited
      to the surrender of the policy, payments on a loan secured by the cash value
      of a borrower’s life insurance policy do not have to be considered in the total
      debt-to-income ratio. If additional obligations are indicated, the obligation
      amount must be factored into the total debt-to-income ratio, or subtracted from
      the borrower’s ﬁnancial reserves. Documenting Borrower Receipt of Funds If the
      funds are needed for the down payment or closing costs, lenders must document
      the borrower’s receipt of the funds from the insurance company by obtaining
      either a copy of the check from the insurer or a copy of the payout statement
      issued by the insurer. If the cash-value of the life insurance is being used
      for reserves, the cash-value must be documented but does not need to be liquidated
      and received by the borrower. Recent Related Announcements There are no recently
      issued Announcements related to this topic.'
  judgment: false
