Fannie Mae Selling Guide

Individuals or families who are in the market for a new home can greatly benefit from getting a loan from a Fannie Mae-approved lender. Mortgages are loans that are distributed specifically for housing. Borrowers usually make monthly payments on their mortgages with additional interest charges. A lender will make a profit on the interest payments from borrowers. When lenders need to refill their funds so that they can create more mortgages for home buyers, Fannie Mae purchases loans and combines them into mortgage backed securities (MBS). This practice creates liquidity for lenders and stimulates the housing market by allowing more Americans to become homeowners.

Fannie Mae, or FNMA, has created a comprehensive selling guide for lenders who are looking to sell their loans and mortgages. This guide is targeted toward lenders, but it also contains information that can be useful for appraisers as well. Mortgage lenders can find an abundance of vital information regarding the requirements to work with Fannie Mae. The selling guide is organized into five parts that correspond with how lenders generally categorize their business dealings. Review the sections below to learn more about the Fannie Mae selling guide.

Note: Fannie Mae reserves the right to alter or waive any of the requirements listed in the selling guide. It may also enforce additional requirements if needed.

Who is the Fannie Mae selling guide intended for?

The Fannie Mae selling guide is targeted towards lenders who are looking to do business with the FNMA. Using the document, lenders can find a wealth of information about the requirements and expectations of working with the company. Available information ranges from the requirements that must be satisfied to become a Fannie Mae-approved lender to methods of ensuring quality control. While there may be some material available for parties working with a lender, such as appraisers, the selling guide primarily focuses on those offering mortgages.

Throughout the Fannie Mae selling guide, lenders will be able to find helpful information for all steps of the loan process. While each step does not have direct engagement with the FNMA, all Fannie Mae guidelines and requirements will be detailed for lenders. If there are any changes made to the selling guide, there will be an announcement that will describe the change. The actual contents of the selling guide will also altered to reflect any changes.

Fannie Mae’s selling guide takes lenders through the step-by-step process of originating and closing a loan, to selling and delivering the loans to the FNMA. Finally, the guide provides details on how lenders can ensure quality control and maintain Fannie Mae eligibility.

Learn more about the FNMA selling guide by downloading our in-depth guide.

What does the Fannie Mae selling guide contain?

The FNMA selling guide details the process and guidelines of selling mortgages to Fannie Mae. It incorporates current policies, procedures and all announcements that have been issued to date. The Fannie Mae guidelines and requirements are presented in detail so that it is easy to quickly locate a particular subject of interest and find the desired content. In the selling guide, Part A through Part D are organized by subpart, chapter, section and topic. Part E includes additional support components, such as the selling guide resources, exhibits and glossary. The sections are organized in chronological order based on the lender’s full loan distribution and selling process.

Note: Any updates made to the selling guide will be noted on the Fannie Mae website.

Part A: Doing Business With Fannie Mae

In short, the first part of the Fannie Mae selling guide describes a lender’s requirements in order to become an approved seller and servicer of residential mortgages, including the procedures for obtaining technology applications. Part A will define the contractual obligations of an approved lender, which is vital information. Information about representations, warranties and other parameters of the lender contract can be found here. Furthermore, this section details the requirements for a lender to maintain eligibility, since these are several reporting requirements that lenders must adhere to in order to maintain this Fannie Mae eligibility.

Download your copy of our comprehensive guide to learn more about the FNMA.

Part B: Origination Through Closing

This part covers all the requirements that a seller must satisfy while originating conventional and government loans that will be sold to Fannie Mae. This section covers the entire process of creating a new loan, from origination and underwriting to the loan closing process. Lenders will learn about how to underwrite borrowers and property, considerations to make while performing this underwriting, and government programs eligibility and underwriting requirements. The Fannie Mae selling guide can be used as a reference for lenders who need guidance in originating and closing the loan process.

Part C: Selling, Securitizing and Delivering Loans

This part begins to describe the transactions that occur between mortgage lenders and Fannie Mae. The two primary methods of transaction include selling whole loans for cash and pooling loans into mortgage-backed securities (MBS). In this section, lenders can find general information on their options for executing and delivering loans. After reading about whole loan transactions and MBSs, lenders can decide which operation works best for their business.

Part D: Ensuring Quality Control (QC)

Quality control is the system used by lenders and the FNMA to maintain standards on the originating and servicing of loans. A Fannie Mae mortgage has specific requirements for lender quality control programs and practices. Moreover, this section details the process that Fannie Mae uses to ensure that all purchased or securitized loans meet the eligibility and underwriting requirements.

Part E: Quick Reference Materials

The final segment of the FNMA selling guide contains valuable reference materials for lenders to utilize. This section contains definitions of various acronyms and abbreviations that appear throughout this guide. Additionally, any contact that is referenced in the guide will be listed in this section along with any available contact information. There is also a helpful glossary to help define unfamiliar terms that are used within the guide.

Note: All of the forms that are available in the Fannie Mae selling guide can also be found online on the Fannie Mae website.

What is Fannie Mae?

The Federal National Mortgage Association (Fannie Mae) provides affordable housing finance options for homebuyers and renters. Fannie Mae does not provide original mortgages. Rather, the organization purchases existing mortgages and guarantees them with government sponsorship. Fannie Mae mortgages have a fixed rate and can have a lifespan as long as 30 years.

Who is eligible for Fannie Mae?

Fannie Mae guarantees multi-family and single-family mortgages and loans. To qualify for either type of loan, an applicant must have an income lower than the local average, and the property he or she wants to buy must be worth less than the federal maximum. Further, applicants must have a credit score above 620. However, the minimum required credit score may change depending on how many properties the applicant plans to purchase.