source:
  type: guide
  id: fnma-sel-b3-6-03
  authority: Fannie Mae Selling Guide B3-6-03 — Monthly Housing Expense for the Subject
    Property
  description: Fannie Mae Selling Guide B3-6-03 — Monthly Housing Expense for the
    Subject Property.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-6-03-full
  canonical_id: fnma-sel-b3-6-03-full
  section: Fannie Mae Selling Guide B3-6-03 — Monthly Housing Expense for the Subject
    Property
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-6-03 — Monthly Housing Expense for the
      Subject Property
    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: 'B3-6-03, Monthly Housing Expense for the Subject Property (12/16/2020)
      Introduction This topic contains information about the following: Monthly Housing
      Expense Calculating Monthly Real Estate Tax Payment Monthly Housing Expense
      Monthly housing expense is the sum of the following and is referred to as PITIA
      for the subject property: principal and interest (P&I); property, ﬂood, and
      mortgage insurance premiums (as applicable); real estate taxes; ground rent;
      special assessments; any owners’ association dues (including utility charges
      that are attributable to the common areas, but excluding any utility charges
      that apply to the individual unit); any monthly co-op corporation fee (less
      the pro rata share of the master utility charges for servicing individual units
      that is attributable to the borrower’s unit); Published May 6, 2026 501 any
      subordinate ﬁnancing payments on mortgages secured by the subject property.
      Note: The monthly payment of a subordinate lien associated with a business debt
      secured by the subject property can be excluded from the monthly housing expense
      if it meets the requirements of Business Debt in the Borrower’s Name in B3-6-05,
      Monthly Debt Obligations. Lenders must enter all components of the monthly housing
      expense on the loan application including subordinate ﬁnancing P&I, homeowner’s
      insurance, supplemental property insurance, real estate taxes, mortgage insurance,
      association/project dues, and other proposed housing expenses. If the subject
      mortgage is secured by the borrower''s principal residence, the monthly housing
      expense is based on the qualifying payment required in accordance with B3-6-04,
      Qualifying Payment Requirements. This amount is the monthly housing expense
      used to calculate the debt-to-income (DTI) ratio. If the subject mortgage is
      secured by a second home or an investment property, the qualifying payment amount
      is considered one of the borrower''s monthly debt obligations when calculating
      the DTI ratio. Calculating Monthly Real Estate Tax Payment The lender must base
      its calculation of real estate taxes for borrower qualiﬁcation on no less than
      the current assessed value. However, the lender must project the real estate
      taxes if one of the following applies: For purchase and construction-related
      transactions, the lender must use a reasonable estimate of the real estate taxes
      based on the value of the land and the total of all new and existing improvements.
      This policy also applies to properties in jurisdictions where a transfer of
      ownership typically results in a reassessment or revaluation of the property
      and a corresponding increase in the amount of taxes. There is a tax abatement
      on the subject property that will last for no less than 5 years from the note
      date. For example: for a municipality with a 10-year abatement, the lender may
      qualify the borrower with the reduced tax amount; for a municipality with a
      10-year abatement and with annual real estate tax increases in years 1 through
      10, the lender must qualify the borrower with the annual taxes that will be
      required at the end of the 5 th year after the ﬁrst mortgage payment date. The
      lender has the option to project the real estate taxes if the amount of taxes
      will be reduced based on federal, state, or local jurisdictional requirements.
      However, the taxes may not be reduced if an appeal to reduce them is only pending
      and has not been approved. Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
      Announcements Issue Date Announcement SEL-2020-07 December 16, 2020 Published
      May 6, 2026 502 Announcements Issue Date Announcement SEL-2020-02 April 01,
      2020 Announcement SEL-2020-01 February 05, 2020 Announcement SEL-2019-09 December
      04, 2019'
  judgment: false
