source:
  type: guide
  id: fnma-sel-b7-1-03
  authority: Fannie Mae Selling Guide B7-1-03 — Lender-Purchased Mortgage Insurance
  description: Fannie Mae Selling Guide B7-1-03 — Lender-Purchased Mortgage Insurance.
  coverage_tier: operative
obligations:
- id: fnma-sel-b7-1-03-full
  canonical_id: fnma-sel-b7-1-03-full
  section: Fannie Mae Selling Guide B7-1-03 — Lender-Purchased Mortgage Insurance
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B7-1-03 — Lender-Purchased Mortgage 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: 'B7-1-03, Lender-Purchased Mortgage Insurance (05/27/2010) Introduction
      This topic contains information on lender-purchased mortgage insurance, including:
      Overview Lender Requirements Overview Fannie Mae accepts lender-purchased mortgage
      insurance coverage for all loan types except adjustable-rate mortgages that
      can be converted to ﬁxed-rate mortgages. Fannie Mae will consider accepting
      lender-purchased mortgage insurance for convertible adjustable-rate mortgages
      that are in MBS pools if the lender uses the “market rate” post-conversion disposition
      option and assumes all interest rate risk. Lender Requirements When providing
      lender-purchased mortgage insurance, the lender must: make any and all disclosures
      to the borrower that are either required by law, including the Homeowners Protection
      Act of 1998, or are otherwise appropriate for lender-purchased mortgage insurance
      coverage; pay for the mortgage insurance coverage as a corporate obligation
      with an initial premium and renewal premiums for each subsequent period of coverage,
      which may be a month or a year. Lump-sum premium plans that provide coverage
      for the life-of-the-mortgage loan also are acceptable; increase the servicing
      compensation it would otherwise be required to retain for the mortgage loan
      (whether the mortgage loan is submitted as a whole loan or MBS pool delivery)
      by at least the amount of the mortgage insurance renewal premium. (This is not
      required for lump-sum premium plans that provide life-of-the-mortgage coverage.);
      keep the mortgage insurance coverage in eﬀect until the mortgage is paid in
      full; deliver the loan with SFC 019; and when servicing is transferred, the
      lender must provide the new servicer with a list of all mortgage loans with
      this type of insurance that are included in the portfolio that is being transferred
      (identifying the applicable premium rates), explaining the premium payment obligations
      and procedures applicable to these mortgage loans, and transferring the accruals
      on deposit for the payment of future renewal premiums to the new servicer (or
      making an appropriate adjustment to the servicing transfer settlement). Recent
      Related Announcements There are no recently issued Announcements related to
      this topic. Published May 6, 2026 838'
  judgment: false
