source:
  type: regulation
  id: hud-ml-2025-04
  authority: HUD Mortgagee Letter 2025-04
  description: 'HUD Mortgagee Letter 2025-04. See obligation entries for operative

    requirements and verbatim primary-source citations.

    '
obligations:
- id: hud-ml-2025-04-boarder-income-eligibility
  canonical_id: hud-ml-2025-04-boarder-income-eligibility
  section: "HUD ML 2025-04 — Boarders of the Subject Property: Eligibility Standard"
  description: 'Where [LENDER] uses Rental Income from Boarders of the subject Property

    to qualify the Borrower, [LENDER] may consider that income as Effective

    Income only if the occupying Borrower has a 12-month history of

    receiving income from Boarders and is currently receiving Boarder income.

    '
  type: do
  audit_question: For every FHA-insured loan where [LENDER] used Rental Income from Boarders of the subject Property as Effective Income, can [LENDER] evidence (a) the occupying Borrower's 12-month history of receiving Boarder income and (b) that the Borrower is currently receiving Boarder income?
  workflow_phase: underwriting
  owner_role: compliance_officer
  secondary_owner_role: default_servicing_analyst
  cadence: per-loan
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - underwriting
  - income-qualification
  - boarder-income
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2025-04 — Boarders Standard (II.A.4.c.xii(I)(4)(b) / II.A.5.b.xii(I)(4)(b))"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2025-04hsgml.pdf
    snapshot_id: cfac511a30f18cec
    fetched_at: '2026-05-22T19:55:00Z'
    content_hash: sha256:b1289a8d056b339209f694446db8205b067ec31734f2a0323e8f1a30307b8260
    paragraph_quote: "Rental Income from Boarders may be considered Effective Income if the \noccupying Borrower has a 12-month history of receiving income from \nBoarders and is currently receiving Boarder income."
    drafter_attestation: 'Copied verbatim from snapshot cfac511a30f18cec (content.txt) at

      2026-05-22T20:28Z. Substring is the (b) Standard eligibility for

      Boarder Rental Income under ML 2025-04 (applies to both TOTAL and

      Manual underwriting paths).

      '
  promoted_at: '2026-05-22T20:17:42+00:00'
  promoted_from: hud-ml-2025-04-roundb-v1.yaml
  program_review: Does the program account for the Boarder-income eligibility condition — using Boarder Rental Income as Effective Income only where the occupying Borrower has a 12-month history of receiving it and is currently receiving it?
  file_review: Spot-check Boarder-income files; confirm the occupying Borrower's 12-month history and current receipt of Boarder income.
  judgment: false
  feeds:
  - hud-ml-2025-04-boarder-income-documentation
- id: hud-ml-2025-04-boarder-income-documentation
  canonical_id: hud-ml-2025-04-boarder-income-documentation
  section: "HUD ML 2025-04 — Boarders of the Subject Property: Required Documentation (II.A.4.c.xii(I)(4)(c) / II.A.5.b.xii(I)(4)(c))"
  description: 'Where [LENDER] qualifies the Borrower using Rental Income from Boarders,

    [LENDER] must verify and document the existing Rental Income by

    obtaining (i) evidence of rental history over the previous 12 months;

    (ii) evidence of Rental Income received from Boarders for at least nine

    of the most recent 12 months (via Tax Returns or bank statements,

    canceled checks, or deposit slips); (iii) evidence that the Boarder''s

    address is the same as the Borrower''s address; and (iv) a copy of the

    executed written agreement documenting the boarding terms and the

    Boarder''s intent to continue boarding with the Borrower.

    '
  type: do
  audit_question: For every FHA-insured loan qualifying with Boarder Rental Income, can [LENDER] produce from the loan file (a) 12-month rental-history evidence, (b) Tax Returns or bank statements/canceled checks/deposit slips showing Boarder income for at least 9 of the most recent 12 months, (c) evidence the Boarder's address matches the Borrower's, and (d) the executed written boarding agreement?
  workflow_phase: underwriting
  owner_role: compliance_officer
  secondary_owner_role: default_servicing_analyst
  cadence: per-loan
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - underwriting
  - income-documentation
  - boarder-income
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2025-04 — Required Documentation"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2025-04hsgml.pdf
    snapshot_id: cfac511a30f18cec
    fetched_at: '2026-05-22T19:55:00Z'
    content_hash: sha256:b1289a8d056b339209f694446db8205b067ec31734f2a0323e8f1a30307b8260
    paragraph_quote: "The Mortgagee must verify and document the existing Rental Income \nfrom Boarders by obtaining the following:"
    drafter_attestation: 'Copied verbatim from snapshot cfac511a30f18cec (content.txt) at

      2026-05-22T20:28Z. Substring is the headline of (c) Required

      Documentation; the four documentation elements are enumerated in

      description.

      '
  promoted_at: '2026-05-22T20:17:42+00:00'
  promoted_from: hud-ml-2025-04-roundb-v1.yaml
  program_review: Do the P&Ps ensure Boarder Rental Income is documented with (i) 12-month rental history, (ii) Boarder income for at least 9 of the most recent 12 months (Tax Returns / bank statements / canceled checks / deposit slips), (iii) Boarder address matching the Borrower's, and (iv) the executed written boarding agreement?
  file_review: Pull Boarder-income files; confirm all four documentation items are present in the loan file.
  judgment: false
- id: hud-ml-2025-04-boarder-income-30pct-cap
  canonical_id: hud-ml-2025-04-boarder-income-30pct-cap
  section: "HUD ML 2025-04 — Boarders of the Subject Property: Calculation Cap"
  description: 'The amount of Rental Income from Boarders [LENDER] uses as Effective

    Income must not exceed 30 percent of the total monthly Effective Income

    used to qualify the Borrower.

    '
  type: monitor
  audit_question: For every FHA-insured loan qualifying with Boarder Rental Income, can [LENDER] demonstrate that the Boarder Rental Income amount used as Effective Income did not exceed 30 percent of total monthly Effective Income?
  workflow_phase: underwriting
  owner_role: compliance_officer
  secondary_owner_role: default_servicing_analyst
  cadence: per-loan
  consequence: ''
  tags:
  - round-b
  - regulator-direct
  - hud-ml
  - fha
  - underwriting
  - income-cap
  - boarder-income
  - promoted
  primary_source:
    tier: 1
    authority: "HUD ML 2025-04 — Calculation of Effective Income"
    source_class: hud-ml-pdf
    source_url: https://www.hud.gov/sites/dfiles/OCHCO/documents/2025-04hsgml.pdf
    snapshot_id: cfac511a30f18cec
    fetched_at: '2026-05-22T19:55:00Z'
    content_hash: sha256:b1289a8d056b339209f694446db8205b067ec31734f2a0323e8f1a30307b8260
    paragraph_quote: "The amount of the Rental Income from Boarders used as Effective \nIncome must not exceed 30 percent of the total monthly Effective \nIncome used to qualify the Borrower."
    drafter_attestation: 'Copied verbatim from snapshot cfac511a30f18cec (content.txt) at

      2026-05-22T20:28Z. Substring is the (d) Calculation of Effective

      Income 30-percent cap of ML 2025-04.

      '
  promoted_at: '2026-05-22T20:17:42+00:00'
  promoted_from: hud-ml-2025-04-roundb-v1.yaml
  program_review: Do the P&Ps ensure Boarder Rental Income used as Effective Income does not exceed 30% of total monthly Effective Income used to qualify the Borrower?
  file_review: Pull Boarder-income files; confirm the Boarder income used was <= 30% of total monthly Effective Income.
  judgment: false
_promotion_history:
- promoted_at: '2026-05-22T20:17:42+00:00'
  candidate_path: obligations\_remediation\_round_b_drafts\hud-ml-2025-04-roundb-v1.yaml
  candidates_promoted: 3
  candidates_skipped_existing: 0
