Selling Guide

Published October 2, 2019

C2-1.2-03: Best Efforts Commitment Terms, Amounts, and Other Requirements (05/01/2019)

This topic provides information on terms and other requirements associated with best efforts commitments, including:

Best Efforts Commitment Terms and Amounts

By accepting any prices and delivering mortgages to Fannie Mae pursuant to a commitment obtained through Fannie Mae’s whole loan committing application, the lender confirms that:

  • the lender is approved and continues to satisfy the eligibility requirements as described in this Guide, and

  • the mortgages comply with all Fannie Mae requirements in the Mortgage Selling and Servicing Contract and the Selling and Servicing Guides.

Fannie Mae will commit to pay to lenders proceeds that are based upon the acquisition price for committed loans, subject to any applicable adjustments, as long as:

  • the key data and product type delivered matches the key data and product type reported to Fannie Mae to enter into the commitment, and

  • the acquisition date is on or before the date upon which the commitment expires.

Best efforts commitments are for a specific borrower, address, and commitment period. Loan substitution is not allowed. Lenders may not change a best efforts commitment to a mandatory commitment (or vice versa) or change the remittance type from scheduled/scheduled to actual/actual (or vice versa).

Lenders must notify Fannie Mae via the whole loan committing application within one business day of any change to the key data or product type that occurs during the commitment period. If there is a change to the key data or product type and the new loan meets Fannie Mae’s eligibility requirements, the acquisition price for the committed loan may be changed to reflect the revised information (using worse case pricing when applicable).

Best Efforts Servicing Options

Lenders may retain, release, or sell the servicing rights associated with the loans they deliver in fulfillment of a best efforts commitment. Lenders may also execute a concurrent transfer of servicing via the whole loan committing application. If approved to participate in the Servicing Execution Tool component of the whole loan committing application, lenders have the option to retain servicing or arrange for the concurrent sale of servicing to a participating servicer through the Servicing Execution Tool. See C2-1.3-01, Servicing Execution Tool and Servicing Marketplace, for more information.

Those retaining or releasing servicing may do so using the actual/actual or scheduled/scheduled remittance type. Certain products, however, require servicing via a specific remittance type. See C1-3-01, General Information on Remittance Types, for information on remittance types and the Cash Remittance System for details on remittance requirements for specific mortgage products.

For more information and to learn about additional terms and conditions associated with servicing-released executions, lenders should contact their Fannie Mae customer account team or the Capital Markets Pricing and Sales Desk for details.

Other Best Efforts Requirements

Fannie Mae's active document custodians serve as custodians for loans delivered via a best efforts execution. For additional information on the role of document custodians, see C2-2-02, Documentation Requirements for Whole Loan Deliveries. Also, refer to Fannie Mae's Active Document Custodians for a complete list of eligible custodians.

Early funding is available for loans delivered in fulfillment of a best efforts commitment. For details on this option and other options, and terms and conditions associated with best efforts commitments, lenders should contact their Fannie Mae customer account team or the Capital Markets Pricing and Sales Desk.

DU Recommendations on Loans Delivered with Best Efforts Commitments

A lender may fulfill a best efforts commitment by delivering a mortgage loan with a valid DU loan casefile ID that is associated with the lender's institution ID. The DU loan casefile must have received a DU recommendation of Approve/Eligible no earlier than 60 days prior to commitment. Alternatively, lenders may select the “Other” Underwriting Method (as viewed in the whole loan committing application), in which case a DU recommendation is not required.

Related Announcements

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

Announcements and Release Notes Issue Date
Announcement SEL-2019-04 May 01, 2019
Announcement SEL-2018-03 April 03, 2018
Announcement SEL-2015–06 May 26, 2015
Announcement SEL-2015–01 January 27, 2015
Announcement SEL-2014–16 December 16, 2014
Announcement SEL-2013–08 October 22, 2013
Announcement SEL-2012–07 August 21, 2012
DU Version 9.0 July 24, 2012
Announcement SEL-2011–11 October 25, 2011
Announcement SEL-2011–04 May 24, 2011
Announcement 09–29 September 22, 2009
Announcement 08-32 December 10, 2008