source:
  type: guide
  id: fnma-sel-a3-2-01
  authority: Fannie Mae Selling Guide A3-2-01 — Compliance With Laws
  description: Fannie Mae Selling Guide A3-2-01 — Compliance With Laws.
  coverage_tier: operative
obligations:
- id: fnma-sel-a3-2-01-full
  canonical_id: fnma-sel-a3-2-01-full
  section: Fannie Mae Selling Guide A3-2-01 — Compliance With Laws
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide A3-2-01 — Compliance With Laws
    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: 'A3-2-01, Compliance With Laws (12/10/2025) Introduction This
      topic contains information on compliance with laws, including: General Obligations
      Additional Requirements Related to Compliance with Laws Reporting Requirements
      Requirements Related to Speciﬁc Laws and Other Fannie Mae Requirements Compliance
      with Fannie Mae Cybersecurity Incident Requirements General Obligations The
      seller/servicer (any subservicer or third-party originator it uses) and any
      licensee of Fannie Mae technology must: comply with, all federal, state, and
      local laws (e.g., statutes, regulations, ordinances, directives, codes, administrative
      rules and orders that have the eﬀect of law, and judicial rulings and opinions)
      that apply to: Published May 6, 2026 90 any of its origination, selling, or
      servicing practices, including laws and regulations on consumer credit, equal
      credit opportunity and truth-in-lending, and borrower privacy; use of Fannie
      Mae licensed technology; and other business practices that may have a material
      eﬀect on Fannie Mae; ensure appraisals conform to the Appraiser Independence
      Requirements; and B4-1.1-04, Unacceptable Appraisal Practices; and ensure property
      data collections conform to the Property Data Collector Independence Requirements.
      Additional Requirements Related to Compliance with Laws The table below describes
      additional requirements related to a seller/servicer’s obligation regarding
      compliance with applicable laws. ADDITIONAL REQUIREMENTS RELATED TO COMPLIANCE
      WITH LAWS Topic Description Obligation to monitor A seller/servicer must • establish
      appropriate policies and procedures for monitoring (and monitor) applicable
      legal developments, • demonstrate it has complied with applicable laws and regulations
      upon Fannie Mae’s request, • advise its Fannie Mae customer account team if
      an applicable law or regulation conﬂicts with Fannie Mae’s requirements, and
      • establish policies and procedures to monitor appraisals for prohibited language
      to eliminate discriminatory practices and appraisals bias. Published May 6,
      2026 91 ADDITIONAL REQUIREMENTS RELATED TO COMPLIANCE WITH LAWS Topic Description
      Remedy for violations Fannie Mae may enforce a remedy for all seller/servicer
      violations of applicable laws and regulations that may have a material eﬀect
      on Fannie Mae. For whole loans acquired on or after November 20, 2014 and for
      loans delivered into MBS with pool issue dates on and after December 1, 2014.
      Fannie Mae considers the following to be signiﬁcant defects and may require
      a repurchase for a breach of the seller/servicer’s representation and warranty
      regarding compliance with laws when: • the seller/servicer’s failure to comply
      could be expected to either ⚬ impair Fannie Mae’s or its servicer’s ability
      to enforce the note or mortgage, or ⚬ impose assignee liability on Fannie Mae;
      or • a court or regulatory authority has found the loan to be in violation,
      or Fannie Mae has made a ﬁnding based on the facts available to it that a violation
      may have occurred. • A violation may involve any one of the following: ⚬ laws
      administered or regulations implemented by the Department of the Treasury’s
      Oﬃce of Foreign Assets Control (OFAC); ⚬ the Fair Housing Act or related regulations;
      ⚬ the anti-discrimination provisions of the Equal Credit Opportunity Act or
      related regulations; ⚬ federal or state prohibitions on unfair, deceptive, or
      abusive acts or practices (UDAAP); or ⚬ the Securities Exchange Act of 1934
      or regulations thereunder. Published May 6, 2026 92 ADDITIONAL REQUIREMENTS
      RELATED TO COMPLIANCE WITH LAWS Topic Description Remedy for UDAAP and ability
      to repay violations With respect to UDAAP, Fannie Mae will consider published
      federal and state announcements of interpretations as well as all published
      judicial and administrative decisions and will not enforce a repurchase if:
      • the seller/servicer cures the matter by remediation to the injured party;
      or • after the third anniversary of the acquisition (or MBS pool issue date)
      of a loan (unless the seller/servicer self-reports), a federal or state enforcement
      authority has indicated, asserted, or claimed that such practice violates (or
      may) violate UDAAP, or a federal or state court has held that a speciﬁc practice
      violates UDAAP. Fannie Mae will not make legal a determination of whether a
      loan complies with or is exempt from TILA, ATR, or the Revised Qualiﬁed Mortgage
      Rule, or whether a lender''s designation of the status of a loan is correct
      except as required in judicial or regulatory proceedings in which Fannie Mae
      is a party. For noncompliance with the ability to repay (ATR) requirements in
      the TILA and its implementing regulations, which could impose assignee liability
      on Fannie Mae, Fannie Mae will not issue a repurchase demand on such grounds
      unless a court, regulator, or other authoritative body concludes that a speciﬁc
      loan did not comply with ATR, including the Qualiﬁed Mortgage Rule. Published
      May 6, 2026 93 ADDITIONAL REQUIREMENTS RELATED TO COMPLIANCE WITH LAWS Topic
      Description Repurchase demands for compliance with laws violations A repurchase
      demand based on compliance with laws violation will include supporting facts
      and ﬁndings made by Fannie Mae. Fannie Mae’s determination that a violation
      has occurred must be consistent with the facts provided by the seller/servicer
      and any other information obtained by Fannie Mae as part of its evaluation of
      the situation. If Fannie Mae issues a repurchase demand involving a failure
      to comply with laws when there is pending litigation underway for that same
      issue, or when a government agency with authority to make a determination regarding
      the issue has publicly stated that it is reviewing the issue, the seller/servicer
      is not required to repurchase the loan until 30 days after the litigation is
      • dismissed, • settled, or • concluded at trial in an adjudication, or • the
      government agency has made a ﬁnal determination (collectively, the “Resolution”).
      After the Resolution, the seller/servicer may request that Fannie Mae review
      the appropriateness of the repurchase demand in light of the Resolution. Fannie
      Mae will withdraw the repurchase demand where appropriate. A seller/servicer
      may be required to repurchase a loan that is in breach of the requirements of
      this topic at any time despite the fact that the loan is otherwise eligible
      for enforcement relief for breaches of certain underwriting and eligibility
      representations and warranties in accordance with the Selling Guide. Reporting
      Requirements The seller/servicer must notify Fannie Mae if, after conducting
      due diligence, it determines that a breach of a selling warranty related to
      compliance with laws has likely occurred. The seller/servicer’s notiﬁcation
      responsibilities depend on how many loans are aﬀected and whether the breach
      could warrant a repurchase demand based on the criteria described above. Reporting
      Category 1 The seller/servicer must notify Fannie Mae if both of the following
      conditions occur: the number of loans aﬀected by the same potential breach exceeds
      the lesser of 500 loans or 1% of the total number of loans delivered to Fannie
      Mae in the prior year, and all potentially aﬀected loans were delivered to Fannie
      Mae within the same calendar quarter. Published May 6, 2026 94 The notiﬁcation
      is required within 60 days of the later of: the end of the calendar quarter
      in which such loans were delivered, or discovery of the potential breach. The
      seller/servicer must report these loans using the self-report functionality
      in Loan Quality Connect. Note: If the calculation described above results in
      fewer than ﬁve potentially aﬀected loans, then the seller/servicer does not
      need to notify Fannie Mae. Reporting Category 2 The following reporting requirements
      apply when: the potential breach could warrant a repurchase demand, or the number
      of loans aﬀected by the same type of potential breach delivered in the same
      calendar quarter does not exceed the lesser of 500 loans or 1% of the total
      number of loans delivered to Fannie Mae in the prior year. Reporting Requirements
      If... Then... the breach could warrant a repurchase demand and has not been
      remedied or will not be remedied within 60 days, the seller/servicer must notify
      Fannie Mae within 60 days by using the self-report functionality in Loan Quality
      Connect. the breach could warrant a repurchase demand and has been remedied
      or will be remedied within 60 days, the seller/servicer does not need to notify
      Fannie Mae. the breach would not warrant a repurchase demand, the seller/servicer
      does not need to notify Fannie Mae. Examples: Scenario 1: A lender identiﬁes
      a repeated potential breach related to compliance with laws where a repurchase
      demand is not warranted. The lender determines June 1 it may have failed to
      provide a property valuation when required under the Equal Credit Opportunity
      Act. This impacted 600 loans that were delivered to Fannie Mae between January
      1 and March 31. The lender must report the potential breach to Fannie Mae within
      60 days of June 1. In this scenario, the number of loans impacted exceeded 500
      loans and the loans were delivered within the same quarter. Scenario 2: A lender
      that delivered 70,000 loans to Fannie Mae the prior year identiﬁes a repeated
      potential breach related to compliance with laws where a repurchase demand is
      not warranted. Published May 6, 2026 95 The lender determines August 15 it may
      have failed to provide a property valuation when required under the Equal Credit
      Opportunity Act. This impacted 200 loans that were delivered to Fannie Mae between
      January 1 and March 31, and 400 loans that were delivered to Fannie Mae between
      April 1 and June 30. The lender will not be required to report the potential
      breach for either quarter, as the number of loans impacted in each quarter did
      not exceed 500 loans. In this scenario, 500 loans is less than 700 loans (1%
      of prior year deliveries). Scenario 3: A lender identiﬁes a single loan impacted
      by a potential breach for which a repurchase demand is a potential remedy. The
      lender may have violated the Fair Housing Act. The lender must report the breach
      to Fannie Mae within 60 days of determination of the potential breach, unless
      it determines the non-compliance has been remedied or will be remedied within
      60 days in accordance with applicable law. Requirements Related to Speciﬁc Laws
      and Other Fannie Mae Requirements Following is a table of additional requirements
      related to speciﬁc laws and other Fannie Mae requirements. REQUIREMENTS FOR
      SPECIFIC LAWS AND OTHER REQUIREMENTS Topic A seller/servicer... IRS Reporting
      Requirements must report to the IRS as required by Part of this Guide, Part
      C of the Servicing Guide, and in accordance with the instructions of the Internal
      Revenue Service. Published May 6, 2026 96 REQUIREMENTS FOR SPECIFIC LAWS AND
      OTHER REQUIREMENTS Topic A seller/servicer... Department of Treasury Oﬃce of
      Foreign Assets Control (OFAC) Regulations • must establish and maintain an eﬀective
      OFAC compliance program; • must report all instances of penalties (civil or
      criminal) or enforcement actions for compliance failures or violations related
      to OFAC requirements to Fannie Mae''s Ethics division; • may not deliver a loan
      to Fannie Mae if any borrower is on one of the sanctions lists maintained by
      OFAC; and • must periodically screen the loans that it services for Fannie Mae
      against OFAC’s sanctions lists. If the servicer identiﬁes a valid match, the
      servicer must ⚬ notify Fannie Mae Ethics via email within 24 hours of identifying
      a match (see E-1-02, List of Contacts), including in the notice the borrower’s
      name, Fannie Mae loan number, and a point of contact at the servicer. Upon receipt
      of the notice, a representative from Fannie Mae will contact the servicer to
      discuss the match and any potential next steps. ⚬ take steps to ensure that
      any funds from the individual or entity on an OFAC sanctions list are blocked
      and segregated, including any escrow funds. ⚬ take steps to ensure that all
      servicing activities on the loan cease. This includes, but is not limited to,
      ▪ remittance of P&I payments to Fannie Mae, ▪ payments to taxing authorities,
      ▪ payments to property and ﬂood insurers, ▪ payments to mortgage insurers, ▪
      collection activities, including performing property inspections, ▪ loss mitigation
      activities, and ▪ foreclosure. Published May 6, 2026 97 REQUIREMENTS FOR SPECIFIC
      LAWS AND OTHER REQUIREMENTS Topic A seller/servicer... Anti-money laundering
      Bank Secrecy Act (BSA) If a seller/servicer is subject to the BSA''s anti-money
      laundering (AML) provisions, Fannie Mae may request to examine the relevant
      policies, procedures, and controls of their AML program. The seller/servicer
      must report all instances of penalties (civil or criminal) or enforcement actions
      for compliance failures or violations related to anti-money laundering regulatory
      requirements to Fannie Mae’s Ethics division (see E-1-02, List of Contacts)
      . If a seller/servicer is not subject to the BSA''s AML provisions, it must
      establish a suspicious activity identiﬁcation program that consists of internal
      policies, procedures, and controls to identify and report to Fannie Mae suspicious
      activity, including mortgage fraud, money laundering, terrorist ﬁnancing, and
      related crimes. A suspicious activity identiﬁcation program must have the following
      elements: • a designated individual that oversees the program; • written policies,
      procedures, and internal controls eﬀectuating the program; • program training
      for relevant personnel; and • testing to assess the program''s eﬀectiveness.
      Fannie Mae may request to examine the relevant policies, procedures, controls
      and any other material that documents and implements these elements. All sellers
      and servicers must report all instances of suspicious activity related to Fannie
      Mae loans using the self-report functionality in Loan Quality Connect or those
      related to Fannie Mae’s business activities to Fannie Mae’s Mortgage Fraud Reporting
      division (see E-1-02, List of Contacts) . Fannie Mae reserves the right to make
      additional inquiries to the seller/servicers of any owner, including any direct,
      indirect, or beneﬁcial owner that is a foreign party. Published May 6, 2026
      98 REQUIREMENTS FOR SPECIFIC LAWS AND OTHER REQUIREMENTS Topic A seller/servicer...
      HERA Servicer Reporting Requirements • must comply with the Housing and Economic
      Recovery Act of 2008 and its regulations (together, "HERA") and speciﬁcally
      the Minority and Women Inclusion Rule reporting requirements and: ⚬ provide
      data regarding the diversity status of the servicer, its agents, subcontractors,
      and vendors; ⚬ complete a Fannie Mae supplier registration proﬁle that accurately
      reﬂects its ownership status, regardless of whether it is “HERA-Inclusive, and
      its team composition report; ⚬ update its proﬁle to reﬂect such ownership changes
      within 30 days of any change of ownership; ⚬ provide ownership and team composition
      information described in the Existing Suppliers guidance on Fannie Mae’s website
      annually by November 1; and ⚬ provide any such additional information that Fannie
      Mae reasonably requests for purposes of complying with HERA, the Minority and
      Women Inclusion Rule, or any other diversity and inclusion requirements. • may
      develop a process to collect the ownership status of the agents, subcontractors,
      and vendors used by the servicer in servicing loans for Fannie Mae; • must commit
      to practice the principles of equal employment opportunity and non-discrimination
      in all its business activities; and • as required by the Minority and Women
      Inclusion Rule, must include, as a material condition of each contract with
      its agents, subcontractors, and vendors that provide services or goods to Fannie
      Mae, a provision that each such entity commit to practice the principles of
      equal employment opportunity and non- discrimination in all their business activities.
      Published May 6, 2026 99 REQUIREMENTS FOR SPECIFIC LAWS AND OTHER REQUIREMENTS
      Topic A seller/servicer... Address Conﬁdentiality Programs (Safe at Home Laws)
      • must comply with all applicable requirements in a state Address Conﬁdentiality
      Program. This includes, when required by applicable state law, giving notice
      to loan purchasers or assignees, and providing notice to Fannie Mae''s Privacy
      Oﬃce (see E-1-02, List of Contacts). For a loan in which a borrower is enrolled
      in a state Address Conﬁdentiality Program, the seller/servicer must • include
      both a property address and a legal substitute mailing address at loan delivery,
      • report Special Feature Code 877, • for a loan that it services, complete the
      post-purchase adjustment process within 5 days of receiving notiﬁcation that
      a borrower has enrolled in, or has unenrolled in, one of these programs, and
      • provide notice of program enrollment and the borrower mailing address to any
      transferee servicer upon the transfer of servicing rights. The Servicing Guide
      also includes the post-delivery servicing transfer requirements. Requirements
      of Insurer/Guarantor • must comply with all requirements that FHA, VA, HUD,
      and RD, or the mortgage insurance companies have for loans they insure or guarantee;
      • must take all actions necessary to ensure that Fannie Mae recovers the full
      amount due under the guaranty or the full claim under the insurance contract;
      and • must not enter into any agreement with insurers or guarantors which has
      the potential to modify loss claim settlements under the terms of the guaranty
      or insurance contract. Published May 6, 2026 100 REQUIREMENTS FOR SPECIFIC LAWS
      AND OTHER REQUIREMENTS Topic A seller/servicer... Reﬁnancing Practices • must
      include in its policies and procedures appropriate safeguards to prevent the
      possibilities of violating Fannie Mae’s prohibitions against questionable or
      prohibited reﬁnancing practices; • may promote the terms it has available for
      reﬁnancings by sending promotional if the servicer targets ⚬ borrowers of all
      loans in its servicing portfolio, ⚬ all borrowers who have speciﬁc types of
      loans, or ⚬ borrowers of loans that fall within speciﬁc interest rate ranges.
      See B2-1.3-04, Prohibited Reﬁnancing Practices for additional information. Compliance
      with Fannie Mae Cybersecurity Incident Requirements If the seller/servicer experiences
      a Cybersecurity Incident (as such term is deﬁned in the Supplement), or if an
      information security professional could reasonably conclude that Company or
      its third parties may have experienced a Cybersecurity Incident, the seller/servicer
      must follow the requirements in the Supplement. Recent Related Announcements
      The table below provides references to recently issued Announcements that are
      related to this topic. Announcements Issue Date Announcement SEL-2025-10 December
      10, 2025 Announcement SEL-2025-05 July 02, 2025 Announcement SEL-2025-01 February
      05, 2025 Announcement SEL-2024-06 September 04, 2024 Announcement SEL-2023-07
      August 02, 2023 Announcement SEL-2023-03 April 05, 2023 Published May 6, 2026
      101 Announcements Issue Date Announcement SEL-2022-06 July 06, 2022 Announcement
      SEL-2022-01 February 02, 2022 Announcement SEL-2021-08 September 01, 2021 Announcement
      SEL-2019-08 October 02, 2019 Announcement SEL-2019-06 July 03, 2019 Announcement
      SEL-2019-03 April 03, 2019'
  judgment: false
