source:
  type: guide
  id: fnma-sel-a3-5-03
  authority: Fannie Mae Selling Guide A3-5-03 — Errors and Omissions Policy Requirements
  description: Fannie Mae Selling Guide A3-5-03 — Errors and Omissions Policy Requirements.
  coverage_tier: operative
obligations:
- id: fnma-sel-a3-5-03-full
  canonical_id: fnma-sel-a3-5-03-full
  section: Fannie Mae Selling Guide A3-5-03 — Errors and Omissions Policy Requirements
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide A3-5-03 — Errors and Omissions Policy Requirements
    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: 'A3-5-03, Errors and Omissions Policy Requirements (07/25/2017)
      Introduction This topic contains information on errors and omissions policy
      requirements, including: Errors and Omissions Coverage Requirements Errors and
      Omissions Coverage and Deductible Amounts Mortgage Impairment or Substitute
      for Errors and Omissions Errors and Omissions Coverage Requirements The errors
      and omissions policy must, at least, protect the seller/servicer against negligence,
      errors, and omissions in: maintaining property and ﬂood insurance that meets
      Fannie Mae’s requirements, Published May 6, 2026 131 maintaining any required
      mortgage insurance or loan guaranty, determining whether properties are located
      in Special Flood Hazard Areas, paying real estate taxes and any special assessments,
      and complying with reporting requirements of the mortgage insurer or guarantor.
      Errors and Omissions Coverage and Deductible Amounts The errors and omissions
      coverage must equal the amount of the seller/servicer’s ﬁdelity bond coverage.
      See the formula in A3-5-02, Fidelity Bond Policy Requirements to determine the
      amount of coverage required. However, Fannie Mae does not require errors and
      omissions coverage in excess of: $10 million if the seller/servicer sells or
      services only single-family mortgage loans, or $30 million if the seller/servicer
      sells or services single-family and multifamily mortgage loans. Note: If the
      seller/servicer uses a subservicing arrangement, the master servicer must maintain
      errors and omissions coverage at all times for the servicing of mortgage loans
      that it owns but that the subservicer services for that master servicer. A subservicer
      must only maintain coverage for mortgage loans that it owns. (See the Servicing
      Guide A2-1-07, Subservicing for additional information about subservicing arrangements.)
      Fannie Mae accepts policies that provide for either coverage per aggregate loss
      or coverage per mortgage loan. If the policy provides coverage per mortgage
      loan: the insurer’s liability must at least equal the amount of the highest
      UPB for a single-family or multifamily mortgage loan. that the seller/servicer
      owns, and the seller/servicer must review the balances of the mortgage loans
      it services before each premium renewal date to determine whether the above
      limitation needs to be increased as the result of the origination of higher
      balance mortgage loans during the last coverage period. For policies that provide
      coverage per mortgage loan, the maximum deductible amount for each mortgage
      loan cannot be more than 5% of the insurer’s liability per mortgage loan. For
      policies that provide coverage per aggregate loss, the deductible is determined
      in accordance with the following table: Total UPB Maximum Deductible Less than
      $1 billion greater of $100,000 or 10% of the face amount of the policy Equal
      to or greater than $1 billion 15% of the face amount of the policy Mortgage
      Impairment or Substitute for Errors and Omissions Published May 6, 2026 132
      Fannie Mae will accept a mortgage impairment or mortgagee interest policy as
      a substitute for an errors and omissions policy, provided Fannie Mae receives
      substantially the same coverage that an errors and omissions policy would provide.
      Recent Related Announcements There are no recently issued Announcements related
      to this topic.'
  judgment: false
