Underwriting Assessment Matrix Changes

last updated on Tuesday, October 1, 2019 in Business News

As part of collateral verification, FHLB Des Moines (the Bank) reviews the underwriting for pledged loans. Preferably, all loans are fully documented to market expectations. However, not all loans meet this preference. Via the Underwriting Assessment Matrix, the Bank is able to provide lendable value to less than fully documented loans at an appropriate discount.  

These underwriting factors, and the discounts assessed are periodically reviewed. As of October 1, 2019, the following changes were made to the Underwriting Assessment Matrix:

  • The discount owing to lack of repayment ability analysis was lowered from 23 percent to 20 percent. For residential loans, if there is 12 months clean payment history, the discount is lowered even further to ten percent. 
  • The threshold for non-appraisal valuation types was raised to $500,000 for commercial, multifamily and agricultural real estate loans. This is commensurate with the recent change in the appraisal threshold by the primary regulators. In 2020, the Bank will review the underwriting valuation type criteria for residential mortgage loans as a result of recent regulatory changes in the residential appraisal threshold.

As always, pledged collateral must comply with all federal, state and local laws, as well as regulations, including repayment ability and property valuations for select loan types.

View the revised Underwriting Assessment Matrix for more information.