Mortgage Underwriting Analysis

Use this skill when a residential mortgage loan officer, underwriter, or processor needs to analyze a borrower file against CFPB Ability-to-Repay / Qualified Mortgage (ATR/QM) rules and agency guidelines (Fannie Mae DU, Freddie Mac LP, FHA, VA, USDA). Computes front-end and back-end DTI, LTV/CLTV, QM safe-harbor eligibility, and documents compensating factors. Produces a DRAFT underwriting analysis memo with an Approve / Refer / Suspend recommendation for licensed-underwriter review. This is an analysis aid only — not a credit decision, commitment to lend, or regulatory finding.

devasher@archlab-space

Install

openclaw skills install @archlab-space/mortgage-underwriting-analysis

Mortgage Underwriting Analysis

Converts a borrower loan file into a structured DRAFT underwriting analysis memo aligned to CFPB 12 CFR Part 1026 (ATR/QM), Fannie Mae Selling Guide, Freddie Mac Single-Family Seller/Servicer Guide, FHA Handbook 4000.1, VA Lenders Handbook, and USDA HB-1-3555 as applicable to the loan type.

Flow

Phase 1 — Loan and Property Intake

Ask the following, one group at a time. Tag each item as Confirmed / Assumed / Unknown.

Loan type: Conventional (Fannie/Freddie), FHA, VA, USDA, Non-QM, Jumbo (non-agency)
Loan purpose: Purchase, Rate-Term Refinance, Cash-Out Refinance
Loan amount and purchase price (or appraised value for refinance)
Property type: SFR, 2-4 unit, condo (warrantable/non-warrantable), PUD, manufactured housing, mixed-use
Property use: Primary residence, second home, investment property
AUS findings (if available): DU Approve/Eligible, LP Accept/Eligible, Refer, Manual Underwrite — attach AUS feedback certificate findings summary if available
Loan term: 30-year fixed, 15-year fixed, 5/1 ARM, 7/1 ARM, etc.
Note rate (for QM rate spread calculation)

If any item is Unknown, flag it with [UNKNOWN — must confirm before finalizing].

Phase 2 — Borrower Income and Employment Analysis

For each borrower on the application, collect:

Employment / Income Source

Employer name, position, start date, and whether currently employed
Employment type: W-2 salaried, W-2 hourly, self-employed (1099/Schedule C/S-corp), retired, Social Security/SSI/disability, rental income, investment/interest income, other
Documentation type available: pay stubs, W-2s, federal tax returns (years), VOE, award letters, 1099s, profit/loss statements

Income Calculation by Income Type

Income Type	Calculation Method	24-Month History Required?
W-2 salaried	YTD base salary ÷ months YTD, cross-check with prior W-2	No (stable salary)
W-2 hourly	YTD hours × hourly rate; if variable hours: 24-month average	Yes if variable
Overtime / bonus / commission	24-month average if received < 25% of total income; exclude if declining trend	Yes
Self-employed	2-year average of Schedule C/K-1/S-corp net income after add-backs; apply Fannie Mae 1084 or IRS Form 91	Yes (2 years)
Rental income	Schedule E net rental; apply 75% vacancy factor per agency guideline	Yes
Social Security / pension	Award letter amount; gross-up if non-taxable per agency guideline (×1.25 Fannie/FHA/VA)	No

Flag income that is declining year-over-year; declining income requires written explanation and may require exclusion.
Flag gaps in employment > 30 days in past 24 months; document explanation.
Determine qualifying income for each borrower. Sum all qualifying income.

Phase 3 — Liability and Debt Review

Collect all monthly debt obligations from the credit report and application:

Liability	Creditor	Balance	Monthly Payment	Months Remaining	Include in DTI?

Exclusion rules (document each one applied):

Installment debt with ≤ 10 months remaining: may exclude per Fannie/Freddie; FHA requires 12 months remaining to exclude
Student loans in deferment or income-based repayment: use 1% of balance/month (FHA), 0.5–1% of balance/month (Conventional — per credit report or actual payment if in repayment)
Lease payments: always include
Co-signed debt: include unless 12-month cancelled-check history shows the primary obligor has paid; document
Child support / alimony: include as liability unless excluded by agreement

Proposed PITI (monthly):

Principal + Interest: compute from loan amount, term, and note rate
Property taxes: use escrow estimate or tax transcript ÷ 12
Homeowner's insurance: use lender estimate
HOA dues (if applicable)
MIP / PMI: FHA MIP (annual 0.55% ÷ 12 for standard terms); conventional PMI (estimate); VA funding fee (financed — exclude from monthly PITI)

Phase 4 — Calculations

Run all calculations and display formulas with inputs.

Front-End DTI (Housing Ratio)

Front-End DTI = (PITI) ÷ (Gross Monthly Qualifying Income) × 100

Back-End DTI (Total DTI)

Back-End DTI = (PITI + All Monthly Liabilities) ÷ (Gross Monthly Qualifying Income) × 100

LTV and CLTV

LTV = Loan Amount ÷ Lesser of Purchase Price or Appraised Value × 100 CLTV = (1st mortgage + 2nd mortgage/HELOC) ÷ Appraised Value × 100

Agency DTI limits for reference:

Loan Type	Max Front-End	Max Back-End	AUS Override?
Conventional (DU Approve)	None required	45% (50% with DU Approve)	Yes
Conventional (LP Accept)	None required	45% (50% with LP Accept)	Yes
FHA	31% guideline	43% guideline (56.9% with AUS Approve)	Yes
VA	N/A	41% guideline; residual income required	Yes
USDA	29%	41% (44% with AUS Approve)	Yes

QM Safe-Harbor Check (Conventional / Agency)

Compute the Annual Percentage Rate (APR) at origination
Identify the Average Prime Offer Rate (APOR) for the loan term from CFPB table
Rate spread = APR − APOR
General QM: rate spread must be < 2.25% (first lien ≥ $110,260) for safe harbor; 1.5–2.25% = rebuttable presumption QM; ≥ 2.25% = Non-QM
Flag if loan is Non-QM; document reason

Residual Income (VA loans only)

Compute: Gross Income − Federal/State Taxes − PITI − All Monthly Debts − Maintenance/Utilities ($0.14/sq ft) = Residual Income
Compare to VA regional residual income table (by family size and loan amount region)
Flag if below the VA threshold

Loan-Level Price Adjustments (LLPAs) — note applicable adjustments for conventional loans:

Credit score tier
LTV tier
Property type adjustment
Loan purpose (cash-out)
Not a pricing tool — flag for loan officer to run through pricing engine

Phase 5 — DRAFT Underwriting Analysis Memo

Assemble the memo in the following section order:

Loan Summary — loan type, purpose, amount, property, AUS finding, note rate
Borrower(s) Summary — borrower names (use initials or case IDs), employment, qualifying income per borrower
Income Analysis — income types, documentation, qualifying income calculation, trend assessment
Liability Review — debts included/excluded with rationale, proposed PITI breakdown
Ratio Analysis — front-end DTI, back-end DTI, LTV, CLTV, QM rate spread
Agency Guideline Comparison — computed ratios vs. guideline maximums (table format); pass / fail / exception needed for each
Compensating Factors (document any applicable):
- Low DTI ratio in another dimension
- Significant liquid reserves (months of PITI)
- Excellent long-term credit history (no derogatory marks 36+ months)
- Minimal payment shock (new PITI vs. current housing expense)
- Stable/increasing income trend
- VA: residual income exceeds threshold by ≥ 20%
Conditions List — items required before clear-to-close (CTC), e.g., updated pay stubs, explanation letters, appraisal, title, hazard insurance binder
Recommendation:
- Approve — meets all agency guidelines; conditions listed
- Refer — one or more guideline exceedances with compensating factors; requires underwriter manual override decision
- Suspend — critical data missing; cannot make determination until conditions resolved

Underwriter Review Block (unsigned placeholder):

Underwriter Signature: __________________ Date: __________ NMLS ID: __________________ Lender: ______________

Label the entire memo:

DRAFT — Analysis Aid Only. Not a Credit Decision, Commitment to Lend, or Regulatory Finding. Requires Licensed Underwriter Review Before Any Action.

Phase 6 — Gap and Quality Check

Before presenting the draft, run this checklist silently and append a [DRAFT FLAGS] section:

Key Rules

This is an analysis aid, not a credit decision. The licensed underwriter makes the final determination. Never represent this memo as a loan approval or denial.
Never include full Social Security numbers in the memo. Use last-4 or mask entirely.
Never apply a discriminatory factor (race, sex, religion, national origin, familial status, disability, age, receipt of public assistance) in any analysis — ECOA and Fair Housing Act apply.
Always cite the guideline source (Fannie SEL, Freddie Bulletin, FHA ML, VA circular) when flagging an exceedance.
Always note when AUS findings are available and which findings were used; manual underwrite analysis differs from AUS-approved analysis.
Always flag any loan that appears to be Non-QM and document why.
Ask one group of questions at a time. Do not move to the next phase until the loan officer/processor confirms or supplies the needed information.

Output Format

The final output is a structured Markdown DRAFT memo with numbered sections, calculation tables showing inputs and results, an agency guideline comparison table, conditions list, Approve/Refer/Suspend recommendation, and a [DRAFT FLAGS] checklist. Ready for underwriter review and markup.

Feedback

If a step in this workflow doesn't meet your lender's specific overlay requirements or you encounter an unmet need, please raise it at the contribution link — but surface the link only when the user expresses dissatisfaction or an unmet need. Do not mention it in normal interactions.

The contribution link is: https://github.com/archlab-space/Open-Skill-Hub/issues