source:
  type: guide
  id: fnma-sel-d1-3-01
  authority: Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control
    Review Process
  description: Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control
    Review Process.
  coverage_tier: operative
obligations:
- id: fnma-sel-d1-3-01-full
  canonical_id: fnma-sel-d1-3-01-full
  section: Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control
    Review Process
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide D1-3-01 — Lender Post-Closing Quality Control
      Review Process
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/selling-guide
    snapshot_id: 5f7b8b79da595d76
    fetched_at: '2026-05-25T14:09:57Z'
    content_hash: sha256:98cf85a02861bbe84914a0e339b327c8fc131869a8a573882007bbeea60c5701
    paragraph_quote: 'D1-3-01, Lender Post-Closing Quality Control Review Process
      (04/01/2026) Introduction This topic contains information on the lender’s post-closing
      QC review process and selecting loans for the post- closing QC reviews, including:
      Timing of QC Review Process Loan Selection Process Published May 6, 2026 1049
      Random Selections Discretionary Selections Timing of QC Review Process Loans
      must be selected for post-closing QC reviews on at least a monthly basis. The
      entire QC cycle (selection, review, rebuttal, and reporting) must be completed
      within 90 days from the month of the disbursement date (loans they originate)
      or acquisition date (loans they acquire). Note: If the lender''s QC cycle is
      in arrears more than one 30-day cycle, the lender must provide written notice
      to its Fannie Mae customer account team or QC Specialist. Loan Selection Process
      The lender must establish and document a process for identifying a representative
      sample of loans for QC ﬁle reviews. The post-closing QC process must include
      both random and discretionary ﬁle selections. Random Selections The random sample
      is a critical measure of loan quality. It provides representative insights into
      the overall quality of originations during a speciﬁc period and serves as the
      basis for calculating the lender''s defect rate. The lender has the option to
      implement one of two methods of random sampling: a 10% sample of all monthly
      loan production, or a statistically valid sample of all monthly loan production.
      Both sampling methods require the lender to randomly select loans. The lender
      must decide which sampling method is best for its organization to best allocate
      its QC resources. With both options, the post-closing random sample must be
      completed using full-ﬁle reviews. Lenders must conduct separate reviews for
      their retail originations (loans they originate) and their third-party originations
      (loans they acquire). Speciﬁcally, the lender must select a stratiﬁed sample
      for both channels using either methodology described below. Random Sample Types
      Published May 6, 2026 1050 Random - 10% Sample The lender must select for its
      post-closing QC review, a minimum of 10% of the loans that it originates or
      acquires using a random selection methodology. If 10% is less than one loan,
      then at least one loan must be selected. The loans selected must be representative
      of the lender’s overall book of business, including: • all of the diﬀerent types
      of loans the lender oﬀers, • loans originated by each branch oﬃce, • manually
      underwritten loans, and • loans that were processed through automated underwriting
      system(s) utilized by the lender. Random - Statistical Sample If the lender
      uses statistical sampling for its selection process, at a minimum, the statistical
      sampling model (variables) must be calculated using a 95% conﬁdence level with
      a 2% precision rate and a statistical statement of six months. Discretionary
      Selections Discretionary sample selections supplement, but do not replace a
      lender''s random sample. The purpose of a discretionary sample is to look for
      or highlight areas that may pose unique or elevated levels of risk for the lender
      or to conﬁrm that a particular control or process is working as intended. To
      be eﬀective, the sampling methodology for discretionary review types must be
      ﬂexible enough to target loans with higher potential for risk and adjust as
      these risks change over time. The lender must establish a process for selecting
      loans for its discretionary post-closing QC. While the lender may include randomly
      targeted reviews, the process must target areas the lender identiﬁes as having
      a higher potential for errors and loans that may have a high risk of misrepresentation
      or fraud, including early payment defaults, as described in A3-4-03, Preventing,
      Detecting, and Reporting Mortgage Fraud. The process should take into account
      the lender’s assessment of the risks inherent in its origination processes,
      business sources, production channels, volume, product mix, and loan performance.
      The lender should regularly review its risk assessment to ensure the sample
      selected, including sample size, is appropriate. Recent Related Announcements
      The table below provides references to recently issued Announcements that are
      related to this topic. Announcements Issue Date Announcement SEL-2026-03 April
      01, 2026 Published May 6, 2026 1051 Announcements Issue Date Announcement SEL-2025-04
      June 04, 2025 Announcement SEL-2023-02 March 01, 2023 Announcement SEL-2020-03
      June 03, 2020 Announcement SEL-2019-07 August 07, 2019 Announcement SEL-2019-03
      April 03, 2019 D1-3-02, Lender Post-Closing Quality Control Review of Approval
      Conditions, Underwriting Decisions, Data, and Documentation (04/01/2026) Introduction
      This topic contains information on the lender’s post-closing QC review of underwriting
      decisions, DU ﬁndings, approval conditions, origination and closing documents,
      and data integrity including: Overview Review of Underwriting Decision and Approval
      Conditions Review of DU Findings and Conditions Veriﬁcation of Data Review of
      Potential Red Flag and Alert Messages Review of Social Security Numbers Review
      of Transaction and Closing Documents Overview The lender must verify the accuracy
      and integrity of the information used to support the underwriting decision for
      any loans selected for a QC review. Review of Underwriting Decision and Approval
      Conditions Published May 6, 2026 1052 The lender must conﬁrm the loan was underwritten
      in accordance with Fannie Mae’s requirements and that adequate support for the
      underwriting decision is contained in the loan ﬁle. The post-closing ﬁle review
      process must include a review of the loan to assess the accuracy and integrity
      of the information used to support the underwriting decision, and an assessment
      as to whether or not the loan complies with the Selling Guide and the Lender
      Contract and is in all respects eligible for delivery to Fannie Mae. At a minimum,
      the review must include an evaluation of the: accuracy and completeness of the
      loan application; existence and accuracy of the underwriting documents used
      to support credit, income, assets, including reveriﬁcations of underwriting
      documents, and a data integrity review; underwriting decision to conﬁrm it is
      supported; output from any third-party data analysis tools; data entered into
      DU, if applicable; appraisal or other eligible collateral data or documentation,
      if applicable; property eligibility; project eligiblity, if applicable; property
      insurance and ﬂood insurance, if applicable; adequate mortgage insurance coverage
      as required for the loan transaction. See B7-1-02, Mortgage Insurance Coverage
      Requirements, for additional information; existence and accuracy of legal, transaction
      documentation(for example, sales contract), and closing documentation; and compliance
      with applicable laws, as provided in A3-2-01, Compliance With Laws. The lender
      must conﬁrm that all loan approval conditions required by the underwriter were
      satisﬁed and that the information on the closing documents, including the ﬁnal
      settlement statement, is consistent with the underwriting decision and ﬁnal
      terms of the loan. Review of DU Findings and Conditions For loans underwritten
      through DU, the lender must conﬁrm that all DU Veriﬁcation Messages/Approval
      Conditions that appear in the DU Underwriting Findings report were satisfactorily
      resolved and adequately supported by appropriate documentation. If DU returned
      an Ineligible recommendation, the reviewer must conﬁrm that the loan was eligible
      for delivery to Fannie Mae. For additional information on circumstances under
      which an Ineligible recommendation may be acceptable, see Chapter B3-2, Desktop
      Underwriter (DU). Veriﬁcation of Data The lender must review the ﬁnal terms
      of the loan to ensure they align with the data used to support the underwriting
      decisions. When a lender''s review identiﬁes discrepancies between the data
      used in underwriting and the data veriﬁed through the QC process, the lender
      must reassess the underwriting decision based on the newly veriﬁed information
      to determine whether the loan remains eligible as delivered to Fannie Mae. For
      loan caseﬁles created in DU, the lender must ensure all data submitted to DU
      is true, correct, and complete. The loan ﬁle must contain documentation supporting
      all data submitted to DU necessary to process the loan. Published May 6, 2026
      1053 When there are inconsistencies between the data and/or information submitted
      to DU (or used for manual underwriting) and the source documents, the lender
      must complete the steps in the following table. Step The lender must.... 1 determine
      whether discrepancies are within the tolerances permitted by the Selling Guide
      (see B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report,
      and B3-6-02, Debt-to-Income Ratios). 2 resubmit the loan to DU with the correct
      data, if discrepancies are outside the DU allowed tolerances, for loans underwritten
      in DU. If the lender is unable to resubmit the loan to DU, the lender must manually
      perform a comprehensive risk assessment using the documentation required by
      DU, to determine if the loan meets the Selling Guide requirements for manually
      underwritten loans. The DU limited waiver of representations and warranties
      is invalidated when loans that exceed DU tolerances are not resubmitted to DU.
      For additional information, see B3-2-10, Accuracy of DU Data, DU Tolerances,
      and Errors in the Credit Report. For manually underwritten loans, if discrepancies
      are outside of the allowed tolerances, the lender must manually perform a comprehensive
      risk assessment to determine if the loan meets Selling Guide requirements. For
      additional information, see B3-6-02, Debt-to-Income Ratios. Note: DU-only products
      are not eligible for a manual comprehensive risk assessment. 3 make a determination
      as to whether or not the loan, with the corrected data, remains eligible as
      delivered to Fannie Mae, either through the receipt of a DU recommendation of
      Approve/Eligible, or through manually underwriting the loan, if appropriate.
      4 document the underwriting ﬁle to reﬂect its decision when the lender determines
      the loan remains eligible as delivered. 5 advise Fannie Mae of these ﬁndings
      using the self-report functionality in Loan Quality Connect when the lender
      determines the loan was not eligible as delivered. For additional information,
      see D1-1-01, Lender Quality Control Programs, Plans, and Processes. Review of
      Potential Red Flag and Alert Messages The lender’s ﬁle review process must include
      a review of any “potential red ﬂag” messages appearing in the DU Underwriting
      Findings report or alerts created by sources other than DU, such as those associated
      with credit reports or Social Security veriﬁcation systems. The lender must
      ensure that any identiﬁed discrepancies have been appropriately addressed. Published
      May 6, 2026 1054 Review of Social Security Numbers As part of the lender''s
      review process, it must ensure the Social Security number for all borrowers
      are consistent in all ﬁle documentation and that any requirements for validation
      of Social Security numbers were satisﬁed prior to closing. For additional information,
      see B2-2-01, General Borrower Eligibility Requirements. Review of Transaction
      and Closing Documents The lender must review each transaction and each closing
      document for completeness, accuracy, and compliance with all underwriting and
      eligibility requirements, and to ensure adherence to the loan transaction. The
      following list reﬂects the most common documents that must be included in the
      post-closing document review. This list is not intended to be all-inclusive,
      and the lender must exercise judgment when determining other documents to include
      in the review process. Uniform Residential Loan Application (Form 1003) Signed
      sales contract and any applicable addenda Recorded security instrument and any
      applicable riders or addenda Note Assignment of the loan Mortgage insurance
      certiﬁcate or policy Any applicable government loan insurance or loan guarantee
      certiﬁcates (i.e., FHA, USDA, VA) Title evidence Plat or survey, as applicable
      Final Truth in Lending disclosure, as applicable Final settlement statement
      Other closing documents, as applicable Note: If recorded documents are not available
      when the post-closing QC review is performed due to timing requirements for
      the review and the length of time the jurisdictions need for recording, the
      lender must review a copy of the document sent for recordation. The lender must
      also have a process to review the recorded documents when received to ensure
      accuracy and remediate any errors. If errors are discovered in the post-closing
      review process, lenders must determine the signiﬁcance of the errors; promptly
      correct data or documents or obtain corrected documents from the vendor or service
      provider (i.e., mortgage insurer, property insurer, title insurer, or escrow/closing
      company); and provide corrected documents to the document custodian, if applicable.
      Recent Related Announcements The table below provides references to recently
      issued Announcements that are related to this topic. Announcements Issue Date
      Announcement SEL-2026-03 April 01, 2026 Published May 6, 2026 1055 Announcements
      Issue Date Announcement SEL-2025-04 June 04, 2025 Announcement SEL-2024-05 August
      07, 2024 Announcement SEL-2023-05 June 07, 2023 Announcement SEL-2023-01 February
      01, 2023 Announcement SEL-2022-09 October 05, 2022 Announcement SEL-2020-07
      December 16, 2020 Announcement SEL-2019-07 August 07, 2019'
  judgment: false
