HUD HOC Reference Guide

Direct Endorsement Underwriters must be cognizant of the increased potential for default when there are multiple individual risk factors in a case file. For example: a borrower with a combination of an ARM loan, high LTV, no reserves, and high ratios may need to be evaluated more carefully when granting approval. An increased down payment may need to be considered to bring down ratios and/or compensate for the combined risk factors.

Please see: HUD Handbook 4155.2, Section 1.A; and 2.A & 24 CFR 203.251(t)