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FHA Loan

This document explains the specific steps for entering certain data for an FHA loan casefile. This document is not intended to provide detailed instructions for entering all the loan application data in Desktop Underwriter® (DU®).

  1. For the loan casefile you want to submit as an FHA loan, click section L3. Mortgage Loan Information in the navigation bar.

  2. In the L3. Mortgage Loan Information screen, click Edit.

  3. From the Mortgage Type Applied For drop-down list, select FHA.

Note: The First Lien option in the Mortgage Lien Type drop-down list is the only one supported for FHA loan casefiles. Also, the Balloon, Interest Only, and Negative Amortization loan features are not allowed on FHA loan casefiles.

  1. If there is a Mortgage Credit Certificate (MCC) and it needs to be shown as income based on FHA policy, enter it as an income type. Expand section 1. Borrower Information in the navigation bar and click Income from Other Sources.

  2. In the 1e. Income from Other Sources screen, click Edit.

  3. From the Income Source drop-down list, select Mortgage Credit Certificate and enter the monthly amount.

If the MCC needs to be deducted from the housing expenses based on FHA policy, enter it on the first screen in the FHA and VA Loans section (see steps 15 through 17 below).

Note: The following income types are used for conventional loans only and in most cases result in an error if selected and in all cases the income amount is not used in underwriting: Accessory Unit Income, Capital Gains, Employment Related Account, Housing Allowance, Housing Choice Voucher Program, Non Borrower Household Income, Public Assistance, Royalties, Separate Maintenance, Temporary Leave, and Tip Income. In addition, Foreign Income and Seasonal income, which are entered in section 1b. Current Employment/Self Employment and Income, will result in an error.

  1. If a gift will be used, expand section 4. Loan & Property Information in the navigation bar and click Gifts or Grants.


  1. In the 4. Loan & Property Information screen, click Edit.
  2. Complete the applicable fields:

    1. Choose the borrower who owns the account in the Account Owner field

    2. Select Cash Gift in the Asset Type drop-down list.

    3. Select the applicable provider from the Source drop-down list.

    4. Enter the total amount in the Cash or Market Value field. The full amount of the gift must be entered.

    5. Check Deposited if the gift funds are already in the borrower’s checking or savings account.

    6. If there is more than one gift, click + Add Gift or Grant and repeat steps a through e.

Note: The full amount of the gift(s) needs to be entered.


  1. To enter the Mortgage Insurance Premium (MIP), click section  L4. Qualifying the Borrower in the navigation bar.


  1. In the L4. Qualifying the Borrower – Minimum Required Funds or Cash Back screen, click Edit.
  2. Enter the entire MIP amount in the PMI, MIP, Funding Fee field.

  3. Expand section L4. Qualifying the Borrower in the navigation bar, and click Mortgage Loan Details.

  4. In the L4. Mortgage Loan Details screen, click Edit.

  5. Enter the amount of the MIP that will be financed in the Financed Mortgage Insurance (or Mortgage Insurance Equivalent) Amount field (the second amount field for line I.).

  6. Expand section Government in the navigation bar and click FHA & VA Loans.

  7. For the first screen in the FHA and VA Loans, click Edit.

  8. Complete the applicable fields:

    1. If you enter an amount in the Mortgage Credit Certificate (MCC) field it is deducted from the housing expenses. If it needs to be shown as income based on FHA policy, then it should be entered as an income type (see step 6).

    2. Use the Seller Concessions field to enter the dollar amount of seller concessions in excess of the FHA’s limitation, if you have not already reduced the loan amount by the amount of the seller concession.

    3. Complete the Agency Case Number field by the final submission. See the note below for more details.

    4. If you are doing a refinance transaction and part of the previous upfront mortgage insurance will be refunded, enter that amount in the MIP Refund Amount field. It should not be entered as a credit.

    5. From the Section of the National Housing Act drop-down list, select the applicable section.

    6. Enter the applicable ID number(s). If a sponsoring lender is not needed, enter the FHA Lender ID. If a sponsoring lender is required, enter both the FHA Sponsor ID and Sponsored Originator EIN.

Note: The Agency Case Number field is not required to submit the loan for an underwriting recommendation; however, it is required to obtain FHA insurance. You must enter a valid FHA case number in this field, so leave it blank if you don’t have one yet. If you do not complete the Agency Case Number field, DU displays a warning message. In this case, click DONE. If you do not complete the Agency Case Number, then the underwriting recommendation and findings could be inaccurate.  

  1. If you have the CAIVR number, click Edit for the second screen in FHA and VA Loans.


Note: In addition to the values/fields mentioned in this job aid, there are some other values/fields on the redesigned Form 1003 that DU for government loans will not use, and those that may be used by DU for government loans in a future release. When existing messages are updated or new messages are added using other new fields, the details will be included in future DU for government loans release notes. As always, you must ensure full compliance with all FHA eligibility requirements and all requirements of FHA Single Family Housing Policy Handbook 4000.1.