Servicing Guide

Published February 13, 2019

A1-1-01: Application and Approval of Seller/Servicer (03/14/2018)

The seller/servicer 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 mortgage loans (excluding those mortgage loans delivered under a negotiated contract).

This topic contains the following:

Seller/Servicer Eligibility

Approval or rejection of the 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. The seller/servicer must meet the minimum requirements described in the following table to be considered for approval to sell and/or service residential first lien mortgage loans.

At a minimum, the servicer must...
Have as its principal business purpose, the origination, selling, and/or servicing of residential mortgage loans.
Have demonstrated the ability to originate, sell, and/or service the types of mortgage loans for which approval is being requested.
Have adequate facilities and staff experienced in originating, selling, and/or servicing the types of mortgage loans 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/or services residential mortgage loans.
Meet Lender Adjusted Net Worth requirements established in Selling Guide A4-1-01, Maintaining Seller/Servicer Eligibility and any other financial standards or additional net worth and liquidity eligibility criteria the seller/servicer may be required to satisfy based on specific circumstances.
Meet internal audit and management control requirements established in Selling Guide A4-1-01, Maintaining Seller/Servicer Eligibility.
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 to:
  • individual sellers or servicers,

  • all sellers/servicers that are seeking approval to sell and/or service certain types of mortgage loans,

  • all sellers/servicers that share certain characteristics, or

  • all sellers/servicers.

Fannie Mae approves or disapproves the seller/servicer based on an assessment of its total circumstances; therefore, the seller/servicer that satisfies Fannie Mae’s general eligibility criteria or any special criteria does not have an absolute right to be approved.

The seller/servicer is not required to purchase or own Fannie Mae stock as a condition of eligibility.

Unless otherwise notified in writing, all seller/servicers are eligible to sell and service Texas Section 50(a)(6) loans, so long as the seller/servicer meets the eligibility criteria specified in Texas Constitution Section 50(a)(6). A seller/servicer that intends to sell Texas Section 50(a)(6) loans originated by a third-party originator is also responsible for ensuring that the originating seller qualifies as an “authorized lender” under Texas Constitution Section 50(a)(6).

Application Requirements and Review Fee

A seller/servicer applying to do business with Fannie Mae must submit the documentation and basic application review fee described on Fannie Mae’s website. Application review fees are not refundable.

Special Seller/Servicer Approval and Mortgage Selling and Servicing Contract Addendum

Certain mortgage loan types require special approval to deliver or service. The following special approvals will be documented by an addendum to the MSSC between Fannie Mae and the seller/servicer:

  • co-op share mortgage loans,

  • second lien mortgage loans,

  • HomeStyle® Renovation mortgage loans. Note: Special approval is not required to deliver HomeStyle Renovation mortgage loans after the renovations have been completed, and

  • electronic mortgage loans (eMortgages). Note: The servicer must submit a copy of its eNote servicing procedures with a completed eMortgage Servicer Questionnaire (Form 196) when requesting approval to service eMortgages. See F-1-27, Servicing eMortgages for servicing requirements for eMortgages.

The servicer may request approval to service these mortgage loans through its Fannie Mae Servicing Representative (see F-4-03, List of Contacts). The servicer may not service these mortgage loan types unless it obtains the applicable special approval and executes any additional agreements required by Fannie Mae.

Related Announcements

The following table provides references to Announcements that are related to this topic.

Announcements Issue Date
Announcement SVC-2018-02 March 14, 2018
Announcement SVC-2018-01 February 14, 2018
Announcement SVC–2017–02 February 15, 2017
Announcement SVC-2016–09 October 19, 2016
Announcement SVC-2016–03 April 13, 2016