The Federal Housing Administration (FHA) is changing the definition of the Required Investment field in its Technology Open To Approved Lenders (TOTAL) mortgage scorecard and FHA Connection (FHAC) technology, effective for case numbers assigned on or after Monday, August 22, 2016. This change will provide a more precise representation of the borrower's investment into the transaction.

Current and New Definition


TOTAL Mortgage Scorecard Implementation
FHA has notified the Automated Underwriting System (AUS) vendors of this change. The AUS vendors are in the process of making the adjustments to their calculations for submission to the TOTAL Mortgage Scorecard. There may be a small population of loans that have case numbers assigned prior to Monday, August 22, that have not previously been scored by the TOTAL Mortgage Scorecard. In these instances:

• A mortgagee's AUS vendor may not know which calculation to use until after the loan with a case number has been scored for the first time, and the AUS vendor obtains the version number that indicates the case number assignment date range; and
• Mortgagees may receive messages from their AUS vendor that the loan needs to be resubmitted and re-run through the TOTAL Mortgage Scorecard in order to obtain the correct result from the TOTAL Mortgage Scorecard.

FHA expects that this scenario will only be applicable to a small number of transactions.

FHAC Implementation
For case numbers assigned on or after August 22, mortgagees should ensure that the amount of the Required Investment entered into FHAC's required investment field on the insurance application screen is calculated using the new definition.