Selling Guide

Published October 2, 2018

A4-2-01: Financial Statements and Reports (09/04/2018)

This topic contains information on financial statements and reports, including:

Financial Reporting Requirements

The seller/servicer must demonstrate its financial adequacy to Fannie Mae. To accomplish this, Fannie Mae requires the seller/servicer to submit the statements and the other information described in this topic. A seller/servicer’s failure to timely provide the required information may result in Fannie Mae declaring a breach of the Lender Contract

A seller/servicer must submit audted financial statements and the Authorization for Verification of Credit and Business References (Form 1001), within 90 days after the end of the seller/servicer’s fiscal year.

The requirements for audited financial statements are described in the following table.

The seller/servicer financial statements must...
be prepared under Generally Accepted Accounting Principles (GAAP).
include the opinion of an independent public accountant.
be comparative with the previous year’s reports.
include all of the following:
  • a balance sheet,

  • an income statement,

  • a statement of retained earnings,

  • a statement of additional paid-in capital,

  • a statement of changes in financial position, and

  • all related notes.

If the seller/servicer’s financial statements are consolidated with those of its parent or holding company, they must contain sufficient detail to enable Fannie Mae to review the seller/servicer’s financial data separately from that of the other companies.

The audited annual financial statements and the executed Form 1001 may be sent either electronically or via hard copy to Fannie Mae’s Lender Eligibility and Compliance Unit (see E-1-03, List of Contacts).

The following table lists additional requirements and exceptions for certain types of sellers/servicers. Unless otherwise noted, the statements and other information must be submitted within 90 days after the end of the seller/servicer’s fiscal year and electronically or via hard copy to Fannie Mae’s Lender Eligibility and Compliance Unit (see E-1-03, List of Contacts

If the seller/servicer is... Then...
A state- or federally-supervised depository institution The seller/servicer may submit its latest published financial statements if audited statements are not available yearly so long as it certifies in writing that it does not get yearly audited statements and that the published statements are the same as those submitted to its supervising authority. A balance sheet, income statement, and statement of changes in financial position must also be submitted if they are not included in the published statements.
Not a supervised depository institution, but is a HUD-approved mortgagee A seller/servicer may submit a copy of the annual financial audit report required by HUD instead of sending separate financial statements.
A mortgage banker, a subsidiary of a federally supervised depository institution, housing finance agency, or real estate investment trust In addition to audited annual financial statements, the seller/servicer must submit a Mortgage Bankers’ Financial Reporting Form (Form 1002) following the end of each calendar quarter. Each report should include only the financial data related to the quarterly reporting period for which the report is being submitted.

The seller/servicer must electronically submit this information within 30 days for the March 31, June 30, and September 30 reports and within 60 days for the December 31 report.

A seller/servicer that operates under an accounting cycle other than the standard calendar quarterly cycle does not need to change its methodology, but must ensure that the information submitted with each reporting period includes data for only the quarter required for that specific report.

Additional Requirements for Financial Information In addition, Fannie Mae may, at any time, require a seller/servicer to submit unaudited financial statements, audited financial statements other than the annual statements (if reasonably available), or any other financial information that Fannie Mae considers necessary and reasonable.

Fannie Mae also has the right to require more frequent and more detailed financial reporting from a seller/servicer or additional financial requirements imposed by Fannie Mae on the seller/servicer.

Lender Record Information Form

The Lender Record Information (Form 582) provides information needed to verify that the seller/servicer continues to meet our basic eligibility requirements as well as certifications regarding compliance with our requirements. The seller/servicer must update its Form 582 electronically when it submits its annual financial statements, and in all events no later than 90 days after the end of the seller/servicer’s fiscal year. After the initial report submission, the seller/servicer may submit updates as changes to its status occur. See Fannie Mae's website for information on obtaining user IDs to access and submit the online Form 582.

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-2018-07 September 04, 2018
Announcement SEL-2017–01 January 31, 2017
Announcement SEL-2014–06 May 27, 2014
Announcement 08–23 September 16, 2008