source:
  type: guide
  id: hud-4000-1-ii-a-underwriting-with-an-automated-underwriting-system
  authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Underwriting
    with an Automated Underwriting System (11/07/2023)
  description: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Underwriting
    with an Automated Underwriting System (11/07/2023).
  coverage_tier: operative
obligations:
- id: hud-4000-1-ii-a-underwriting-with-an-automated-underwriting-system-full
  canonical_id: hud-4000-1-ii-a-underwriting-with-an-automated-underwriting-system-full
  section: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Underwriting
    with an Automated Underwriting System (11/07/2023)
  type: do
  tags:
  - regulator-direct
  - fha
  - hud-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: FHA Single Family Housing Policy Handbook 4000.1, Part II — a. Underwriting
      with an Automated Underwriting System (11/07/2023)
    source_class: hud-handbook
    source_url: https://www.hud.gov/hud-partners/single-family-handbook-4000-1
    snapshot_id: 8c03836f77f317e1
    fetched_at: '2026-05-23T00:28:40Z'
    content_hash: sha256:411430f29b13f9b54a2ebb0e6f6e7087ecd2b90d0da22eb0c8c792eaa2d7d0df
    paragraph_quote: 'a. Underwriting with an Automated Underwriting System (11/07/2023)
      FHA’s Technology Open To Approved Lenders (TOTAL) Mortgage Scorecard is not
      an Automated Underwriting System (AUS) but a scorecard that must interface through
      a system-to-system connection with an AUS. Each AUS using TOTAL Mortgage Scorecard
      provides a Feedback Certificate/Finding Report, which documents results of the
      credit risk evaluation, and identifies the credit report utilized for the scoring
      event. The Feedback Certificate/Finding Report upon which the Mortgagee makes
      its underwriting decision prior to endorsement must be included in the case
      binder. i. Use of TOTAL Mortgage Scorecard All transactions must be scored through
      TOTAL Mortgage Scorecard, except Streamline Refinance transactions, assumptions,
      Mortgages made to nonprofit/Governmental Entity Borrowers, and Mortgages made
      to Borrowers who do not have Social Security Numbers (SSN), but who are otherwise
      eligible under the Social Security Number requirements. If the Mortgage involves
      a HUD employee, the Mortgagee must score the transaction through TOTAL. If the
      file receives an Accept, the Mortgagee must underwrite the transaction in accordance
      with the guidance in this Underwriting the Borrower Using the TOTAL Mortgage
      Scorecard section. The Mortgagee must submit the underwritten mortgage application
      to FHA for final underwriting approval. Mortgagees using TOTAL remain solely
      responsible for prudent underwriting practices and the Final Underwriting Decision.
      ii. Requirements for the Submission of Data through TOTAL Mortgage Scorecard
      The Mortgagee must submit data to TOTAL Mortgage Scorecard through an approved
      AUS vendor in a data format acceptable to the AUS vendor, to meet the requirements
      described in the TOTAL Mortgage Scorecard Developer’s Guide. iii. Function of
      TOTAL Mortgage Scorecard TOTAL Mortgage Scorecard evaluates the overall credit
      risk posed by the Borrower, based on a number of credit variables, when combined
      with the functionalities of an AUS. The Mortgagee may not accept or deny an
      FHA-insured Mortgage based solely on a risk assessment generated by TOTAL Mortgage
      Scorecard. The Mortgagee must ensure full compliance with all FHA eligibility
      requirements, and all requirements of this section. The Mortgagee must verify
      the information used to score II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 4. Underwriting the Borrower
      Using the TOTAL Mortgage Scorecard (TOTAL) Handbook 4000.1 198 Last Revised:
      11/26/2025 the Mortgage through TOTAL but does not need to analyze the credit
      history, unless otherwise stated in this section, if an Accept or Approve recommendation
      is received. The underwriter must still underwrite all appraisals according
      to standard FHA requirements. The underwriter must fully underwrite those applications
      where TOTAL issues a Refer. (A) Automated Underwriting System Data Entry Requirements
      (1) Mortgagees The Mortgagee must verify the integrity of all data elements
      entered into the AUS to ensure the outcome of the Mortgage credit risk evaluation
      is valid including: • Borrower’s Credit Report • Borrower’s Liabilities/Debt
      • Borrower’s Effective Income • Borrower’s Assets/Reserves • Adjusted Value
      • Borrower’s total Mortgage Payment including Principal, Interest, Taxes, and
      Insurance (PITI) The Borrower’s total Mortgage Payment includes: • Principal
      and Interest (P&I); • real estate taxes; • Hazard Insurance; • Flood Insurance
      as applicable; • Mortgage Insurance Premium; • HOA or condominium association
      fees or expenses; • Ground Rent; • special assessments; • payments for any acceptable
      secondary financing; and • any other escrow payments. (a) Section 8 Housing
      Choice Voucher The Mortgagee may deduct the amount of the Section 8 Housing
      Choice Voucher if it is paid directly to the Servicer. (b) Abated Real Estate
      Taxes Where real estate taxes are abated, Mortgagees may use the abated amount
      provided that (1) the Mortgagee can document the abated amount with the taxing
      authority and (2) the abatement will remain in place for at least the first
      three years of the Mortgage. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 4. Underwriting the Borrower
      Using the TOTAL Mortgage Scorecard (TOTAL) Handbook 4000.1 199 Last Revised:
      11/26/2025 (c) Temporary Interest Rate Buydowns The Mortgagee must use the Note
      rate when calculating principal and interest for Mortgages that involve a temporary
      interest rate buydown. (2) Sponsored Third-Party Originators The Mortgagee may
      permit a sponsored TPO to enter data into the AUS. Both the Mortgagee and its
      sponsored TPO must ensure and verify all data entered into the AUS. The Mortgagee
      remains ultimately responsible for ensuring the data entered into the AUS is
      correct. The Mortgagee must ensure the Employer Identification Number (EIN)
      of its sponsored TPO is entered into the AUS. If the Mortgagee is using an AUS
      that is unable to transmit the sponsored TPO EIN, the Mortgagee must enter “6999609996”
      in the Lender ID field. (B) New Versions of TOTAL Mortgage Scorecard From time
      to time, FHA will release new versions of TOTAL Mortgage Scorecard. FHA will
      announce the date that the new version will be available. All Mortgages being
      scored for the first time will be scored using the new version. For Mortgages
      with a case number, the Mortgages will be scored using the version that was
      effective when the case number was assigned. Existing Mortgages scored without
      a case number will be scored according to the version number tag that is provided
      in the TOTAL file by the AUS provider (if none, then the current version will
      be used). All Mortgages without a case number will be scored using the new version
      90 Days after the new version is implemented. iv. Feedback Certificates: Risk
      Classification and Related Responsibilities (TOTAL) If the Feedback Certificate/Finding
      Report shows an Accept or Approve, it will be referred to as Accept. (A) Accept/Eligible
      If the Feedback Certificate/Finding Report shows an Accept/Eligible recommendation,
      the Mortgage may be eligible for FHA’s insurance endorsement provided the Mortgagee
      verified that data entered into the AUS is accurate and complete and that the
      entire mortgage application complies with all FHA requirements. The Mortgagee
      must verify that all supporting documentation and information entered into TOTAL
      Mortgage Scorecard is consistent with the final underwriting decision if the
      Mortgage receives an Accept/Eligible. II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
      A. Title II Insured Housing Programs Forward Mortgages 4. Underwriting the Borrower
      Using the TOTAL Mortgage Scorecard (TOTAL) Handbook 4000.1 200 Last Revised:
      11/26/2025 (B) Accept/Ineligible If the Feedback Certification/Finding Report
      shows an Accept/Ineligible recommendation, the Borrower’s credit and capacity
      would meet the threshold for approval, but the Mortgage does not fully comply
      with FHA’s eligibility requirements. The Feedback Certificate will identify
      the specific eligibility requirement that the Mortgage does not meet. The Mortgagee
      must analyze the Feedback Certificate and determine if the reason for the ineligibility
      is one that can be resolved in a manner that complies with FHA underwriting
      requirements. If the Mortgagee can correct the reason for ineligibility, the
      Mortgagee may rescore the Mortgage in the AUS. When the reason for ineligibility
      cannot be corrected in the AUS, the Mortgagee may underwrite the Mortgage using
      the following requirements for an Accept Mortgage, but must resolve the reason
      for ineligibility in accordance with FHA requirements and must provide an explanation
      of the resolution in the remarks section of form HUD- 92900-LT, FHA Loan Underwriting
      and Transmittal Summary. (C) Refer The underwriter must manually underwrite
      any mortgage application for which the Feedback Certificate shows a Refer recommendation
      or any result other than those described above. v. Accept Risk Classifications
      Requiring a Downgrade to Manual Underwriting (TOTAL) The Mortgagee must downgrade
      and manually underwrite any Mortgage that received an Accept recommendation
      if: • the mortgage file contains information or documentation that cannot be
      entered into or evaluated by TOTAL Mortgage Scorecard; • additional information,
      not considered in the AUS recommendation affects the overall insurability of
      the Mortgage; • the Borrower has $1,000 or more collectively in Disputed Derogatory
      Credit Accounts; • the date of the Borrower’s bankruptcy discharge as reflected
      on bankruptcy documents is within two years from the date of case number assignment;
      • the case number assignment date is within three years of the date of the transfer
      of title through a Pre-Foreclosure Sale (Short Sale); • the case number assignment
      date is within three years of the date of the transfer of title through a foreclosure
      sale; • the case number assignment date is within three years of the date of
      the transfer of title through a Deed-in-Lieu (DIL) of foreclosure; II. ORIGINATION
      THROUGH POST-CLOSING/ENDORSEMENT A. Title II Insured Housing Programs Forward
      Mortgages 4. Underwriting the Borrower Using the TOTAL Mortgage Scorecard (TOTAL)
      Handbook 4000.1 201 Last Revised: 11/26/2025 • the Mortgage Payment history,
      for any mortgage trade line reported on the credit report used to score the
      application, requires a downgrade as defined in Housing Obligations/Mortgage
      Payment History (TOTAL); • the Borrower has Undisclosed Mortgage Debt (TOTAL)
      that requires a downgrade; or • business income shows a greater than 20 percent
      decline over the analysis period. vi. Applicability of Automated Underwriting
      System Rules (TOTAL) If a determination is made that the Mortgage must be downgraded
      to manual underwriting, the Mortgagee must cease its use of the AUS and comply
      with all requirements for manual underwriting when underwriting a downgraded
      Mortgage. vii. TOTAL Mortgage Scorecard Tolerance Levels for Rescoring The Mortgagee
      must rescore a Mortgage when any data element of the Mortgage change and/or
      new Borrower information becomes available. The Mortgagee is not required to
      rescore a Mortgage if the following data elements change from the last scoring
      event within the described tolerance levels: When assessing... Rescore is not
      required if: Cash Reserves Cash Reserves verified are not less than 10% below
      the previously scored amount Income Income verified is not less than 5% below
      the previously scored amount Tax and Insurance Escrow The cumulative monthly
      tax and insurance escrow does not result in more than a 2% increase in the Total
      Mortgage Payment to Effective Income Ratio (PTI)'
  judgment: false
