Skip to main content

​
What this task is

This task collects the current homeowners insurance policy or declarations page for the subject property, when a specific property has been identified. The policy should show:
  • The property address,
  • Coverage limits and types,
  • The policy term, and
  • The annual or monthly premium.

​
When this task is required

This task is required when:
  • The borrower has identified a subject property, and
  • The property type requires individual homeowners coverage (for example, a detached single-family home or similar non-condo property), and
  • The loan is being underwritten with PITIA-based affordability considerations (see PITIA).
It typically applies to both purchase and refinance transactions.

​
Why this task is required

Homeowners insurance is a core component of PITIA (see PITIA) and vital to collateral protection:
  • The premium must be included when calculating the borrower’s monthly housing expense.
  • Adequate coverage protects the property—and by extension the lender—against damage or loss.
The insurance policy allows the underwriter to:
  • Confirm that the property is properly insured in accordance with program and investor guidelines.
  • Validate the premium amount so the total housing payment is calculated accurately.
Without this documentation, the lender may need to rely on estimates, which can lead to inaccurate DTI calculations and potential compliance issues.

​
Documents needed to resolve this task

To satisfy this task, provide:
  • The current homeowners insurance declarations page or policy for the subject property:
    • Showing named insureds, property address, coverage limits, deductibles, and policy dates.
    • Clearly stating the premium amount or enough information to derive it.
  • If the policy is being newly obtained for a purchase, provide:
    • The binder or preliminary declarations from the insurer that will be in effect at or before closing.
These documents allow the underwriter to verify that the subject property is adequately insured and to properly incorporate the insurance cost into PITIA (see PITIA).