source:
  type: guide
  id: fnma-svc-d1-4.1-04
  authority: Fannie Mae Servicing Guide D1-4.1-04 — Transfers of Ownership by Grant
    Deed
  description: Fannie Mae Servicing Guide D1-4.1-04 — Transfers of Ownership by Grant
    Deed.
  coverage_tier: operative
obligations:
- id: fnma-svc-d1-4.1-04-full
  canonical_id: fnma-svc-d1-4.1-04-full
  section: Fannie Mae Servicing Guide D1-4.1-04 — Transfers of Ownership by Grant
    Deed
  type: do
  tags:
  - regulator-direct
  - fnma
  - servicing-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Servicing Guide D1-4.1-04 — Transfers of Ownership by Grant
      Deed
    source_class: fnma-guide
    source_url: https://singlefamily.fanniemae.com/media/document/pdf/servicing-guide
    snapshot_id: cf63a82bbb4adfba
    fetched_at: '2026-05-22T23:53:19Z'
    content_hash: sha256:89df66c43baad07f8a8dd9d224492fff7d15e8839edba02ad0e74c7e50fe5da3
    paragraph_quote: 'D1-4.1-04, Transfers of Ownership by Grant Deed (11/12/2014)
      Introduction This topic contains information on transfers of ownership by grant
      deed. Published May 13, 2026 274 The servicer must not consent to any transfer
      of ownership by a grant deed involving a party that indicates its services will
      relieve the borrower of their mortgage loan debt. The following table lists
      the servicer’s responsibilities if it learns that the borrower has been contacted
      by such a party proposing the execution of a grant deed. ✓ The servicer must...
      Explain to the borrower that the transfer of ownership will not be acknowledged,
      that the borrower will not be relieved of the mortgage obligation, and that
      foreclosure proceedings may be initiated if the property is transferred. Work
      with a borrower who has experienced a hardship to determine whether any workout
      options are appropriate. See D2-3, Fannie Mae’s Home Retention and Liquidation
      Workout Options for additional information. The servicer must contact its Fannie
      Mae Servicing Representative (see F-4-02, List of Contacts) if it is contacted
      by a party about accepting a short payoﬀ for a property that it obtained through
      the borrower’s execution of a grant deed. Under no circumstances should the
      servicer negotiate the short payoﬀ. Fannie Mae generally will advise the servicer
      either to accept a Mortgage Release or to initiate foreclosure proceedings.
      The servicer must follow the procedures in Responding to a Title Transferred
      via Grant Deed in F-1-17, Processing a Transfer of Ownership for transfers of
      ownership by a grant deed. Recent Related Announcements There are no recently
      issued Announcements related to this topic. D1-4.1-05, Enforcing the Due-on-Sale
      (or Due-on-Transfer) Provision (11/08/2017) Introduction This topic contains
      information on enforcing the due-on-sale (or due-on-transfer) provision. Unless
      the transfer of ownership is an exempt transaction or involves a property that
      secures a “window-period” mortgage loan, the servicer must accelerate the debt.
      The servicer must send any notices required under the terms of the mortgage
      loan and applicable law before it accelerates the debt. If the funds required
      to satisfy the debt are not received, the servicer should then begin foreclosure
      proceedings. Published May 13, 2026 275 When the servicer learns that a transfer
      of ownership has occurred, it should notify the property purchaser that the
      mortgage loan is due and payable. For a whole mortgage loan or a participation
      pool mortgage loan held in Fannie Mae’s portfolio, the servicer should provide
      30 days notice to the purchaser to pay the mortgage loan balance in full or
      to apply and qualify for a new mortgage loan. If neither is received within
      30 days, the servicer should institute foreclosure proceedings. Under certain
      circumstances, Fannie Mae may consider the following alternatives: Waiver for
      mortgage loans in default. See Allowing a Delinquent Mortgage Loan to Be Assumed
      in D2-3.4-04, Qualifying Mortgage Assumption Workout Option for information
      on mortgage loan assumptions. Optional repurchase of certain mortgage loans.
      See A1-3-01, Requirements for Voluntary Repurchase for additional information.
      Potential litigation. If the legality of the due-on-sale (or due-on-transfer)
      provision is questioned or litigated, see D1-6-02, Handling Notices of Liens,
      Legal Action, Other Actions Impacting Fannie Mae’s Interest for Fannie Mae’s
      requirements for handling the action. Recent Related Announcements There are
      no recently issued Announcements related to this topic. Section D1-4.2, Information
      Relating to Transfers of Ownership on Conventional Mortgage Loans D1-4.2-01,
      Conventional Mortgage Loans that Do Not Include a Due- on-Sale (or Due-on-Transfer)
      Provision (09/09/2020) Introduction This topic contains information on conventional
      mortgage loans that do not include a due-on-sale (or due-on- transfer) provision.
      The following table describes the servicer’s responsibility if a mortgage loan
      not subject to a due-on-sale (or due-on-transfer) provision is modiﬁed or subject
      to a payment deferral. Published May 13, 2026 276 If the mortgage loan not subject
      to a due- on-sale (or due-on-transfer) provision is... Then the servicer must...
      modiﬁed obtain the borrower’s agreement that the mortgage loan modiﬁcation will
      cancel the assumability feature of that mortgage loan. subject to a payment
      deferral notify the borrower that the non-interest bearing balance must be paid
      in full at the time of any sale or transfer. See D1-4.2-02, Conventional Mortgage
      Loans That Include a Due- on-Sale (or Due-on-Transfer) Provision for additional
      information. For all other mortgage loans that are not subject to a due-on-sale
      (or due-on-transfer) provision, there are no restrictions on the transfer of
      ownership. However, the servicer must determine that the purchaser’s credit
      and ﬁnancial capacity is acceptable under current Fannie Mae underwriting guidelines
      if the previous borrower requests a release of liability. See F-1-28, Reviewing
      a Transfer of Ownership for Credit and Financial Capacity for the servicer’s
      requirements for evaluating a request for a release of liability. The servicer
      must follow Obtaining MI Approval for a Conventional Mortgage Loan in F-1-17,
      Processing a Transfer of Ownership for information on obtaining mortgage insurer
      approval and in Completing a Transfer of Ownership in F-1-17, Processing a Transfer
      of Ownership for detailed requirements related to executing the assumption (or
      assumption and release) agreement. The servicer must notify the applicable property
      insurance companies, tax authorities, the mortgage insurer, and any other interested
      parties. If the purchaser did not provide a new property insurance policy, the
      servicer must request the insurer to prepare an endorsement to the existing
      property insurance policy to name the new borrower. The servicer must also obtain
      a new MI policy for an insured mortgage loan or an agreement that extends the
      previous coverage to the new borrower. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Announcements Issue Date Announcement SVC-2020-04 September 9,
      2020 Published May 13, 2026 277 D1-4.2-02, Conventional Mortgage Loans That
      Include a Due- on-Sale (or Due-on-Transfer) Provision (11/08/2017) Introduction
      This topic contains the following: Determining When to Refer to the Participating
      Lender’s Policy Non-Exempt Transactions: Exceptions for Certain Loan Types if
      the Purchaser is Creditworthy Determining When to Refer to the Participating
      Lender’s Policy The servicer must refer to the participating lender’s policies
      for the following mortgage loans as Fannie Mae’s policies do not apply: Participation
      pool mortgage loans held in portfolio that were purchased from a supervised
      lender under commitments dated before August 1, 1983. Concurrent sales participation
      pool mortgage loans in which it holds a majority interest. Non-Exempt Transactions:
      Exceptions for Certain Loan Types if the Purchaser is Creditworthy The servicer
      is authorized to allow transfers of ownership for the following ﬁrst lien mortgage
      loans if all of the criteria listed below are satisﬁed: All ARMs and GPARMs,
      except for the following: those closed under ARM Plans 975, 1029, and 1103;
      those that have extended ﬁxed-rate periods (ARM Plans 659, 660, 661, 750, 751,
      1423, 1437, 2724, 2725, 2726, 2727, 2728, 2729, 3223, 3224, 3225, 3226, 3227,
      3228, 3252 (except as limited for those plans that may be used for Texas Section
      50(a)(6) loans), if the transfer would take place during the ﬁxed-rate period);
      and those that have been converted to ﬁxed-rate mortgage loans. Fixed-rate portfolio
      mortgage loans that Fannie Mae purchased under commitment contracts dated before
      November 10, 1980 unless the purchase of the property is ﬁnanced directly or
      indirectly with wraparound or secondary ﬁnancing from an institutional lender,
      or Fannie Mae has pooled a mortgage loan originally held as a portfolio mortgage
      loan to back an MBS. Fannie Mae will notify the servicer when it does this.
      The servicer must determine that all of the criteria listed in the following
      table are satisﬁed to approve a transfer of ownership. Published May 13, 2026
      278 ✓ Criteria required to approve a transfer of ownership to a creditworthy
      purchaser The purchaser’s credit and ﬁnancial capacity are acceptable under
      Fannie Mae’s current underwriting guidelines. See F-1-28, Reviewing a Transfer
      of Ownership for Credit and Financial Capacity for additional information. The
      mortgage insurer approves the transfer and the mortgage insurer’s speciﬁed conditions
      are satisﬁed, if applicable. The servicer must follow the procedures in Obtaining
      MI Approval for a Conventional Mortgage Loan in F-1-17, Processing a Transfer
      of Ownership for information on obtaining mortgage insurer approval. Note: If
      the mortgage insurer denies the transfer or imposes conditions for approval,
      the servicer must inform the parties involved in the transaction of the mortgage
      insurer’s decision as its reason for not approving the request or the imposition
      of conditions for approval. Before approving a transfer of ownership for a pledged-asset
      mortgage loan, the servicer must determine that the pledged asset will remain
      in place through the assignment of the original pledged asset or the substitution
      of a new asset of equivalent value. The servicer must contact its Fannie Mae
      Servicing Representative (see F-4-02, List of Contacts) to discuss the acceptability
      of a substitute asset or any other alternative the purchaser proposes. As second
      lien mortgage loans are not assumable under the existing terms, if the servicer
      of a second lien mortgage loan is notiﬁed that a prospective purchaser wishes
      to assume a second lien mortgage loan, it must advise the servicer of the ﬁrst
      lien mortgage loan, the borrower, and the proposed property purchaser that the
      second lien mortgage loan debt will be accelerated if the transfer takes place.
      This is true even if Fannie Mae holds the ﬁrst lien mortgage loan and allows
      it to be assumed under its existing terms. If the servicer learns of the transfer
      after the fact, it should notify all parties that the second lien mortgage loan
      is in default and that steps will be taken to accelerate the debt. The servicer
      must then contact its Fannie Mae Servicing Representative (see F-4-02, List
      of Contacts) for approval of the acceleration. If the transfer of ownership
      is not approved or the required eligibility criteria are not satisﬁed and the
      transfer of ownership occurs, the servicer must take all steps necessary to
      enforce the due-on-sale (or due-on-transfer) provision. If the funds required
      to satisfy the mortgage loan debt are not received after the mortgage loan is
      accelerated, the servicer must initiate foreclosure proceedings. The servicer
      must follow the procedures in Completing a Transfer of Ownership in F-1-17,
      Processing a Transfer of Ownership for detailed requirements related to executing
      the assumption (or assumption and release) agreement. The servicer must notify
      the applicable property insurance companies, tax authorities, and any other
      interested parties. If the purchaser did not provide a new property insurance
      policy, the servicer must request the insurer to prepare an endorsement to the
      existing property insurance policy to name the new borrower. Recent Related
      Announcements There are no recently issued Announcements related to this topic.
      Published May 13, 2026 279 Section D1-4.3, Information Relating to Transfers
      of Ownership on Government Mortgage Loans'
  judgment: false
