Selling Guide

Published August 7, 2018

A1-1-01: Application and Approval of Seller/Servicer (12/19/2017)

This topic contains general information on Fannie Mae’s seller/servicer approval requirements, including:

General Information

Sellers/servicers must be approved to do business with Fannie Mae. Fannie Mae determines a seller/servicer’s qualifications by reviewing the seller/servicer’s financial condition, organization, staffing, servicing experience, and other relevant factors.

Fannie Mae’s standard approval is for the sale and/or servicing of single-family loans (excluding those loans delivered under a negotiated contract). Sellers/servicers must obtain special approval to sell and service certain mortgages with unique requirements, such as loans secured by co-op shares or HomeStyle renovation mortgages.


Approval or rejection of a seller/servicer’s application is at Fannie Mae’s sole discretion and is based on Fannie Mae’s business judgment with respect to the totality of the seller/servicer’s circumstances. At a minimum, to be considered for approval to sell and service residential first mortgages, a seller/servicer must:

  • have as its principal business purpose, the origination, selling, and/or servicing of residential mortgages;

  • have demonstrated the ability to originate, sell, and/or service the types of mortgages for which approval is being requested;

  • have adequate facilities and staff experienced in originating, selling, and/or servicing the types of mortgages for which approval is being requested;

  • be duly organized, validly existing, properly licensed (in good standing) or otherwise authorized to conduct its business in each of the jurisdictions in which it originates, sells, and services residential mortgages;

  • have a net worth of at least $2.5 million, plus a dollar amount that represents 0.25% of the unpaid principal balance (UPB) of the seller/servicer’s total portfolio of one- to four-unit residential mortgage loans for which the seller/servicer is contractually obligated to service for the owner of the loan. Lender net worth, as defined and calculated by Fannie Mae, is the seller/servicer’s Total Equity Capital as determined by Generally Accepted Accounting Principles (GAAP), less goodwill and other intangible assets (excluding mortgage servicing rights) and, based on Fannie Mae’s assessment of associated risks, a possible deduction of “affiliate receivables” and “pledged assets net of associated liabilities” (hereinafter referred to as Lender Adjusted Net Worth). Based on specific circumstances, a seller/servicer may be required to satisfy other financial standards or additional net worth and liquidity eligibility criteria. See A4-1-01, Maintaining Seller/Servicer Eligibility for additional information on Fannie Mae’s net worth requirements for approved sellers/servicers;

  • have written procedures for the approval and management of vendors and other third-party service providers;

  • have a fidelity bond and an errors and omissions policy in effect and agree to modify them as necessary to meet Fannie Mae requirements;

  • satisfy any additional eligibility criteria Fannie Mae imposes. Such additional criteria may apply either to individual sellers/servicers, all sellers/servicers that are seeking approval to sell and/or service certain types of mortgages, all sellers/servicers that share certain characteristics, or all sellers/servicers. Fannie Mae approves or disapproves a seller/servicer based on an assessment of its total circumstances; therefore, a seller/servicer that satisfies Fannie Mae’s general eligibility criteria or any special criteria does not have an absolute right to be approved and should not expect automatic approval.

Sellers/servicers are not required to purchase or own Fannie Mae stock as a condition of eligibility.

Application Requirements

Sellers/servicers applying to do business with Fannie Mae must submit the documentation described on Fannie Mae's website.

Application Review Fee

The basic application review fee for new sellers/servicers is $5,000. Application review fees are not refundable.

Special Seller/Servicer Approval and MSSC Addendum

Certain mortgage loan types require special approval. The following special approvals will be documented by an addendum to the Mortgage Selling and Servicing Contract (MSSC) between Fannie Mae and the seller/servicer:

  • co-op share loans,

  • second mortgages,

  • HomeStyle Renovation mortgages, and

  • electronic mortgages (eMortgages).

Sellers/servicers may request approval to deliver these loans through their Fannie Mae customer account team. Sellers/servicers may not deliver these loan types unless they obtain the applicable special approval and execute any additional agreements required by Fannie Mae. Sellers/servicers that apply for special approval to deliver HomeStyle Renovation mortgages must also complete a Special Lender Approval Form (Form 1000A).

Fannie Mae reserves the right to cease approving sellers/servicers for or accepting deliveries of any or all of the mortgage loan types listed above from any or all sellers/servicers. The decision to no longer accept deliveries may result in an amendment to, or the termination of, the special approval. Fannie Mae will provide the affected seller/servicer with reasonable notice of this decision. If the decision affects a seller/servicer's ability to fulfill any required mandatory delivery amount under its Master Agreement, Fannie Mae will consider alternatives through which the seller/servicer can fulfill its delivery obligation.

For a discussion of mortgage loan types that require special customized/negotiated terms in a Master Agreement, see A2-4-01, Master Agreement Overview. For additional information on lender contracts, refer to E-1-04, List of Lender Contracts.

Related Announcements

The table below provides references to the Announcements that have been issued that are related to this topic.

Announcements Issue Date
Announcement SEL-2017-10 December 19, 2017
Announcement SEL-2017–01 January 31, 2017
Announcement SEL-2016–03 March 29, 2016
Announcement SEL-2013–03 April 9, 2013
Announcement SEL-2012–06 June 26, 2012
Announcement SEL-2011–13 December 20, 2011
Announcement SEL-2011–05 June 28, 2011
Announcement SEL-2010–04 March 29, 2010
Announcement 09–32 October 30, 2009
Announcement 08-23 September 16, 2008