MPF Traditional Buydown DTI Alignment: What Loan Officers Must Know About MPF 2026-47
Reglith · September 2026
MPF Announcement 2026-47, issued August 6, 2026, updates the temporary buydown qualification requirements for MPF Traditional loans. The change aligns buydown qualification with the program's standard debt-to-income (DTI) ratios as set forth in Section 5.14.1.3 of the MPF Traditional Selling Guide.
The update is effective immediately and applies to MPF Government MBS, MPF Traditional, and MPF Xtra® products. For loan officers, this means understanding how the standard DTI ratios now apply to loans with temporary interest rate buydowns.
What Changed: DTI Ratios Align with Section 5.14.1.3
MPF Announcement 2026-47 specifies that the temporary buydown qualification requirements have been updated to align with the standard DTI ratios per Section 5.14.1.3 of the MPF Traditional Selling Guide. The maximum allowable DTI is as follows:
- Manually underwritten loans: 43.00%
- Loan Product Advisor (LPA) Accept: Allowable by AUS
- Desktop Underwriter (DU) Approve: Allowable by AUS
For manually underwritten loans, the 43% DTI cap is the maximum. The announcement confirms this threshold applies to temporary buydowns, consistent with the standard manual underwriting limit.
For AUS-processed loans, the DTI limit depends on what the automated underwriting system will support. If Loan Product Advisor or Desktop Underwriter issues an Accept or Approve recommendation, that determination is permissible—provided all other MPF Traditional requirements are met.
Why This Matters for Loan Officers
Temporary buydowns—typically 2-1 or 3-2-1 structures—are marketing tools that help borrowers qualify for homes by reducing their initial monthly payments. The borrower's payment increases over time until reaching the full note rate.
The compliance consideration centers on qualification. How should DTI be calculated for loans with temporary buydowns? This announcement aligns the qualification requirements with the standard DTI ratios in Section 5.14.1.3.
This affects your workflow in two key ways:
Manual underwriting threshold: For loans that don't receive an AUS Accept/Approve, the 43% cap applies as stated in Section 5.14.1.3.
AUS determination: For loans processed through LPA or DU, the DTI is "allowable by AUS"—meaning the system's recommendation governs.
Loan officers should consult the MPF Traditional Selling Guide for specific income and qualification calculation requirements applicable to temporary buydowns.
The Checklist: Manually Underwritten Loans with Temporary Buydowns
For loan officers working manually underwritten files, here's a practical checklist following MPF Announcement 2026-47:
Verify DTI does not exceed 43%. This is the maximum for manually underwritten loans per Section 5.14.1.3. If the ratio exceeds this threshold, confirm whether the loan qualifies for AUS processing.
Document the temporary buydown structure. Clearly show the buydown schedule (e.g., 2-1 or 3-2-1) including start dates, rate changes, and payment amounts for each period.
Confirm the borrower understands the payment increase. While not an MPF-specific requirement, this is a sound UDAAP practice—ensure borrowers know their payment will rise over the buydown period.
Ensure the buydown complies with MPF Traditional requirements. The temporary buydown must meet all applicable program guidelines.
Run the AUS if uncertain. If manual underwriting may not yield a qualifying DTI, consider whether an AUS submission might yield an Accept/Approve recommendation.
AUS Guidance: "Allowable by AUS"
For loans processed through Loan Product Advisor or Desktop Underwriter, the DTI guidance is straightforward: allowable by AUS.
This means the AUS recommendation determines the permissible DTI. If LPA returns an Accept or DU issues an Approve recommendation, that result is compliant—assuming all other MPF Traditional requirements are met.
Ensure accurate loan data input. The AUS must receive correct information, including the note rate and buydown structure, to properly assess the loan.
For AUS loans that receive a Refer or other ineligible recommendation, the file may need to be manually underwritten—at which point the 43% cap per Section 5.14.1.3 applies.
How This Fits Into Broader MPF Updates
MPF Announcement 2026-47 isn't happening in isolation. The MPF Program has been rolling out a series of updates in 2026 aimed at improving clarity and aligning with industry standards.
For example, MPF Announcement 2026-36 updated income assessment requirements effective September 1, 2026. And MPF Announcement 2026-49 addressed the redesigned Uniform Residential Appraisal Report. Each of these updates reflects the program's effort to create consistency across its Guides.
For compliance teams, the pattern is clear: MPF is moving toward standardization. That ultimately makes life easier—once you've updated your procedures. But in the short term, staying on track means monitoring announcements and adjusting workflows before your next loan delivery.
Effective Date and Application
MPF Announcement 2026-47 states it is effective immediately as of August 6, 2026. Loan officers should consult the MPF Traditional Selling Guide and their own institution's policies regarding how this announcement applies to loans in process.
For specific questions about loan eligibility or pipeline impacts, contact the MPF Service Center:
- MPF Customer Service Portal
- Email: MPF-Help@fhlbc.com
- Phone: (877) 345-2673
Quality Control Considerations
For QC teams, MPF Announcement 2026-47 provides updated criteria for reviewing temporary buydown files:
- Confirm manually underwritten files meet the 43% DTI maximum per Section 5.14.1.3.
- For AUS loans, ensure the system recommendation supports the submitted DTI.
- Check that buydown documentation is complete and accurate.
File exceptions should be reviewed carefully. Consult the MPF Traditional Selling Guide for the applicable requirements and reach out to the MPF Service Center with questions.
Key Takeaways
MPF Announcement 2026-47 aligns temporary buydown DTI ratios with standard program limits per Section 5.14.1.3.
Manually underwritten loans must meet a 43% DTI maximum as specified in the Selling Guide.
AUS-processed loans follow the "allowable by AUS" standard—the system recommendation governs.
The change is effective immediately (August 6, 2026) for MPF Traditional, MPF Government MBS, and MPF Xtra®.
Consult the MPF Traditional Selling Guide for specific calculation and documentation requirements.
For questions, the MPF Service Center is available at (877) 345-2673 or MPF-Help@fhlbc.com. You can also access the full MPF Guides and announcements on the MPF Website. And if you're tracking multiple regulatory changes like this one, Reglith can help you monitor updates and automate your compliance workflows.