A:

As the largest financier of 30-year fixed rate mortgages in the United States, Federal National Mortgage Association, known as Fannie Mae, is an important business partner for sellers and providers of residential home mortgage loans who are looking to maintain sustainable operations.

Overview of FNMA Selling Guide

Since Fannie Mae is a government-sponsored enterprise (GSE), its sellers must meet strict criteria to be eligible for backing. The Fannie Mae Selling Guide details the requirements to become a Fannie Mae-approved lender, as well as several aspects of the business relationship between a seller and Fannie Mae.

How to Use the FNMA Selling Guide

Part A of the Fannie Mae Selling Guide includes information on the eligibility and applications requirements for lenders seeking Fannie Mae approval, including the lender's contractual obligations, compliance and technology certifications, and lending practices. Refer to this section for documents and details on how to become a FNMA-approved lender and how to maintain lender eligibility.

Part B covers the unique eligibility and underwriting considerations involved in originating conventional and governmental loans for sale to Fannie Mae. Refer to this section for the requirements for all processes from origination through closing. There is a breakdown of the requirements pertaining to certain types of loans, properties and financing. For example, you can find the policies and requirements related to high-balance mortgage loans and HomeReady mortgage loans.

Part C details the two types of transactions that lenders have with Fannie Mae: whole loans for cash and mortgage-backed securities (MBS). Use Subpart C3 to identify the different steps to issue, buy and sell distinct pools of mortgages, including conventional loans, FHA loans, VA loans and HUD-guaranteed Section 184 loans.

Part D outlines quality controls prior, during and after closing to ensure that mortgage loans sold to Fannie Mae meet eligibility requirements. Use the quality controls described in this part to have your loans ready for audit in case of a review from Fannie Mae’s Loan Quality Center.

Part E lists resources, exhibits and definitions of key terms to support the Fannie Mae Selling Guide. These include the major contracts you must have to do business with Fannie Mae, as well as contact details designed to answer questions.

The Bottom Line

Through Fannie Mae, qualifying lenders can increase their business with home financing to creditworthy low- to moderate-income borrowers. The Fannie Mae Selling Guide is an essential document to evaluate a decision to enter this market.

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