source:
  type: guide
  id: fnma-sel-a2-2-07
  authority: Fannie Mae Selling Guide A2-2-07 — Life-of-Loan Representations and Warranties
  description: Fannie Mae Selling Guide A2-2-07 — Life-of-Loan Representations and
    Warranties.
  coverage_tier: operative
obligations:
- id: fnma-sel-a2-2-07-full
  canonical_id: fnma-sel-a2-2-07-full
  section: Fannie Mae Selling Guide A2-2-07 — Life-of-Loan Representations and Warranties
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide A2-2-07 — Life-of-Loan Representations and
      Warranties
    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: 'A2-2-07, Life-of-Loan Representations and Warranties (08/02/2023)
      Introduction This topic contains information about the life-of-loan representations
      and warranties that lenders are responsible for, including: Overview Life-of-Loan
      Representations and Warranties Life-of-Loan Exclusions: Fannie Mae Charter Act
      Matters Life-of-Loan Exclusions: Misstatements, Misrepresentations, and Omissions
      Life-of-Loan Exclusions: Data Inaccuracies Life-of-Loan Exclusions: Clear Title/First-Lien
      Enforceability Life-of-Loan Exclusions: Compliance with Laws and Responsible
      Lending Practices Life-of-Loan Exclusions: Unacceptable Mortgage Products Overview
      In order to sell loans to Fannie Mae or deliver pools of loans to Fannie Mae
      for MBS, the lender makes representations and warranties as to certain facts
      and circumstances concerning the lender and the mortgage loans it is selling
      or delivering. Fannie Mae provides lenders with relief from enforcement for
      breaches of certain underwriting and eligibility representations and warranties
      for loans meeting the requirements set forth in A2-3.2-02, Enforcement Relief
      for Breaches of Certain Representations and Warranties Related to Underwriting
      and Eligibility (“enforcement relief”). No enforcement relief is available for
      certain “life-of-loan” representations and warranties. Life-of-Loan Representations
      and Warranties A lender is not relieved from the enforcement of breaches of
      its representations and warranties on any mortgage loan, including eligible
      mortgage loans, with respect to the following matters even if those matters
      are addressed in Subparts B1 through B5 of the Selling Guide (the subparts that
      pertain to underwriting and eligibility). With respect to each mortgage loan,
      a lender remains responsible throughout the life of that loan for representations
      and warranties related to the following, as more fully described below: Published
      May 6, 2026 31 Fannie Mae Charter Act Matters; Misstatements, Misrepresentations,
      and Omissions; Data Inaccuracies; Clear Title/First-Lien Enforceability; Compliance
      with Laws and Responsible Lending Practices; and Unacceptable Mortgage Products.
      Life-of-Loan Exclusions: Fannie Mae Charter Act Matters The lender is responsible
      for representations and warranties for the life of the loan for compliance with
      Fannie Mae''s Charter Act. In accordance with its Charter Act requirements,
      a mortgage loan (or any participation interest therein) must meet all of the
      following requirements to be eligible for sale to Fannie Mae: be secured by
      property that is residential in nature. Properties that are not residential
      include, but are not limited to, vacant land, property primarily used for agricultural
      or commercial purposes, or units located in condo or co-op hotels; be secured
      by a property located within the 50 states of the United States of America,
      the District of Columbia, or any territory or possession of the United States;
      be secured by a property with four or fewer units, unless sold through Fannie
      Mae’s multifamily mortgage business; have an original principal balance not
      greater than the applicable maximum loan limit in eﬀect at the time of Fannie
      Mae’s acquisition; and have a loan-to-value (LTV) ratio of 80% or less of the
      security property’s value at the time Fannie Mae acquires the loan or, if the
      mortgage has an LTV ratio in excess of 80%, the mortgage has mortgage insurance
      on the portion of the mortgage in excess of 80% of the property''s value provided
      by a mortgage insurer approved under Fannie Mae’s Qualiﬁed Mortgage Insurer
      Approval Requirements; was sold with recourse for such period and under such
      circumstances as Fannie Mae may require; or was sold on a participation basis
      when the lender retains a minimum 10% interest. Example An example of a breach
      of Charter Act requirements is a mortgage loan secured by a property that consists
      of a principal residence and a dairy farm, resulting in the property having
      signiﬁcant nonresidential use. Life-of-Loan Exclusions: Misstatements, Misrepresentations,
      and Omissions Even if a mortgage loan has met the requirements for enforcement
      relief set forth in A2-3.2-02, Enforcement Relief for Breaches of Certain Representations
      and Warranties Related to Underwriting and Eligibility, the lender remains responsible
      throughout the life of the loan for representations and warranties related to
      misstatements, misrepresentations, and omissions as set forth below. Published
      May 6, 2026 32 In connection with a mortgage loan that has qualiﬁed for relief
      under the framework, “misrepresentations” means any misstatements, misrepresentations,
      or omissions by any party to the loan transaction made with or without the lender’s
      knowledge that pertain to the borrower, the property, or the project as set
      forth in Subparts B1 through B5 of the Selling Guide. Parties to the loan transaction
      include, but are not limited to, borrowers, property sellers, builders, real
      estate agents, lenders including the selling lender, mortgage brokers, loan
      oﬃcers, originators, appraisers, appraisal companies, closing agents, title
      companies, or other third-party vendors performing origination services. Fannie
      Mae will only assert a remedy for a misrepresentation involving a loan that
      has qualiﬁed for relief under the framework if all of the following criteria
      have been met. The misrepresentation must involve three or more mortgage loans
      delivered to Fannie Mae by the same lender; be made pursuant to a common pattern
      of activity in connection with loan origination or sale, based on information
      in the loan ﬁle or other facts or circumstances that existed at the time of
      delivery of the loan to Fannie Mae, which involves at least one party common
      to all the loans; if the selling lender is the common party, involves the same
      individual; or, if a third party is the common party, involves the same individual
      or entity; and be “signiﬁcant,” as deﬁned below. Note: In identifying three
      or more loans to constitute the pattern, Fannie Mae may count loans that have
      obtained relief under the framework and loans that have not obtained such relief.
      Each loan in the pattern must meet all the requirements above in order for Fannie
      Mae to enforce a remedy pursuant to this life-of-loan exclusion. A misrepresentation
      (as deﬁned above) is “signiﬁcant” if Fannie Mae, using true and accurate information,
      determines that the loan would not have been eligible for sale to Fannie Mae
      under the terms of the lender’s contract with Fannie Mae in eﬀect at the time
      of delivery of the loan, or that the loan would have been eligible for purchase,
      but under diﬀerent terms. In making this determination of signiﬁcance, Fannie
      Mae will rely upon a DU simulator. The DU simulator will use the true and accurate
      loan information to approximate the DU recommendation as of the time of delivery
      and compare it to the DU recommendation the lender obtained in the ﬁnal DU loan
      submission before delivery. If the loan originally did not have a DU recommendation,
      the DU simulator will compare the new DU recommendation to the DU recommendation
      the loan would have received using the data provided at delivery, had the lender
      used DU. A misrepresentation will be considered “signiﬁcant” for purposes of
      the life-of-loan test, and the lender will be required to repurchase the loan
      only if the loan receives a worse DU recommendation from the simulator than
      it received (or would have received) at the time of delivery to Fannie Mae,
      except that Fannie Mae will also take into account any applicable variance and
      the impact of any undisclosed concessions, concealed transaction terms, or other
      violations of the lender’s contract (including Selling Guide requirements) that
      are involved in the misrepresentation, but are not evaluated by the DU simulator,
      when determining signiﬁcance. Fannie Mae will notify the lender of any such
      undisclosed matters or violations that are considered in connection with determining
      such signiﬁcance. Fannie Mae will provide the lender with documentation supporting
      the signiﬁcance determination. Published May 6, 2026 33 If Fannie Mae determines
      that the loan would have been eligible for purchase under diﬀerent terms than
      those under which the loan was sold, Fannie Mae will not seek repurchase, but
      instead will re-price the loan, consistent with the lender’s contract at the
      time of loan delivery, to reﬂect the true risk proﬁle of the loan. Fraud. A
      mortgage loan involving fraud will be subject to repurchase, regardless of whether
      the standards described above (that is, the number of aﬀected loans, a common
      pattern of activity, and a signiﬁcance determination) have been met. For purposes
      of this life-of-loan exclusion only, fraud is established either by an adjudicated
      claim aﬃrming fraud by or against the lender or other party to the loan transaction;
      or Fannie Mae ﬁnding clear and convincing evidence that the lender or other
      party to the loan transaction knowingly executed or participated in a scheme
      or artiﬁce in connection with the underwriting, origination, or sale of a loan
      in order to defraud Fannie Mae or any other party to the loan transaction; or
      obtain any moneys, funds, credits, assets, securities, or other properties from
      Fannie Mae or any other party to the loan transaction by means of fraudulent
      pretenses, representations, or promises. Note: Lenders continue, at all times,
      to be responsible for any misstatement, misrepresentation, or omission in connection
      with any matter not relieved under the framework (that is, not addressed in
      Subparts B1 through B5 of the Selling Guide). Mortgage loans are subject at
      all times to Fannie Mae’s standard requirements related to fraud, misstatements,
      misrepresentations, or omissions as described in the Selling Guide, A3-4-03,
      Preventing, Detecting, and Reporting Mortgage Fraud.The lender is required to
      report suspected mortgage fraud whenever a reasonable basis exists to conclude
      that it may have occurred, regardless of whether the loan has obtained relief
      or Fannie Mae may require the lender to repurchase the loan. Examples The following
      examples illustrate some instances of application of this life-of-loan exclusion:
      An example of a misstatement in which the lender may be required to repurchase
      loans even if the loans have obtained relief: In order to qualify borrowers
      in four separate home purchase transactions, the same loan oﬃcer employed by
      a lender understates the liabilities of the borrowers in each DU submission,
      aﬀecting the debt-to-income ratio in each instance. The lender sells all four
      loans to Fannie Mae. The pattern of understatements comes to light after the
      loans have obtained relief under the framework. Fannie Mae utilizes the DU simulator,
      applying the DU rules that were in place at the time of delivery of each loan
      and the correct amount of total borrower liabilities. The DU simulator provides
      an “ineligible” recommendation for each of the four loans. In this instance,
      the lender must repurchase the four loans, if requested, despite the fact that
      the loans obtained relief. An example of an omission in which the lender may
      be required to repurchase the mortgage loans even if the loans have obtained
      relief: In order to sell newly-built homes more quickly, a real estate agent
      and a property developer provide each borrower in three separate transactions
      with a $15,000 rebate outside of closing that is not disclosed in the sales
      contracts or in the settlement statements. All three loans are sold to Fannie
      Mae by the same lender. This practice is in violation of Fannie Mae''s undisclosed
      interested party contributions policy. Had these rebates been taken into account,
      each of the loans would have failed to qualify for Published May 6, 2026 34
      purchase by Fannie Mae. Though this policy is not evaluated by, or able to aﬀect
      the results of, the DU simulator, noncompliance makes the loans ineligible for
      delivery. In this instance, the lender must repurchase the three loans, if requested,
      even if the loans have obtained relief. An example of fraud in which the lender
      may be required to repurchase a single mortgage loan because of clear and convincing
      evidence of a scheme or artiﬁce to defraud: A borrower borrows $10,000 from
      a friend as part of a down payment on a home. He has secretly promised to pay
      the friend back with interest. The borrower provides a falsiﬁed gift letter
      to the lender documenting a $10,000 gift from an uncle. The lender would be
      required, if requested, to repurchase the loan if Fannie Mae subsequently can
      demonstrate that part of the down payment was borrowed—even if the loan had
      obtained relief. Because the borrower’s misstatement to the lender involved
      the knowingly executed scheme or artiﬁce to obtain a loan by use of fraudulently
      fabricated evidence that supports an incorrect factual representation made by
      the borrower, the loan is subject to repurchase, despite not involving a pattern
      of activity aﬀecting three or more loans or meeting the “signiﬁcance” test.
      Life-of-Loan Exclusions: Data Inaccuracies Lenders are responsible for supplying
      Fannie Mae with high-quality, accurate, and complete data through a variety
      of systems, including but not limited to, Fannie Mae’s whole loan committing
      application, DU, and Loan Delivery. (See A3-4-02, Data Quality and Integrity,
      for additional information.) Even if a mortgage loan has met the requirements
      for enforcement relief set forth in A2-3.2-02, Enforcement Relief for Breaches
      of Certain Representations and Warranties Related to Underwriting and Eligibility,
      the lender remains responsible throughout the life of the loan for representations
      and warranties related to data accuracy as set forth below. In connection with
      mortgage loans delivered to Fannie Mae, there must not be delivery data (Uniform
      Loan Delivery Dataset) inaccuracies pertaining to the borrower, the property,
      or the project, if and to the extent the data inaccuracies aﬀect ﬁve or more
      loans and involve the same delivery data element(s); such delivery data diﬀer
      from the information documented in the lender''s mortgage loan ﬁles; and the
      data inaccuracies are “signiﬁcant,” in that, using the information of the loan
      ﬁle to qualify the borrower, property, and project, the loan would not have
      been eligible for delivery under the terms of the lender’s contracts with Fannie
      Mae in eﬀect at the time of delivery of the loan; or the loan would have been
      eligible for sale to Fannie Mae, but under diﬀerent terms. Note: In identifying
      ﬁve or more loans involving the same data element inaccuracy, Fannie Mae may
      count loans that have obtained relief under the framework and loans that have
      not obtained such relief. Each loan in the pattern must meet all the requirements
      above in order for Fannie Mae to enforce a remedy. In determining whether the
      data inaccuracies are “signiﬁcant” for purposes of the life-of-loan test, Fannie
      Mae will rely upon the DU simulator. The DU simulator will use the true and
      accurate loan information to approximate the DU recommendation as of the time
      of delivery and compare it to the DU recommendation the lender obtained in the
      ﬁnal DU loan submission before delivery. If the loan originally did not have
      a DU recommendation, the DU simulator will compare the new DU recommendation
      to the DU recommendation the loan would have received using the data provided
      at delivery, had the lender used DU. Published May 6, 2026 35 A data inaccuracy
      will be considered signiﬁcant and the lender will be required to repurchase
      the loan only if the loan receives a worse DU risk assessment from the simulator
      than it received (or would have received) at the time of delivery to Fannie
      Mae. Fannie Mae will also take into account any applicable variance entered
      into with the lender when determining such signiﬁcance. Fannie Mae will provide
      the lender with documentation supporting the signiﬁcance determination. If Fannie
      Mae determines that the loan would have been eligible for purchase using the
      accurate information from the loan ﬁle but under diﬀerent terms than those under
      which the loan was sold, Fannie Mae will not seek repurchase, but will instead
      re-price the loan, consistent with the lender’s contract at the time of loan
      delivery, to reﬂect the true risk proﬁle of the loan. Examples The following
      examples illustrate instances of application of this life-of-loan exclusion:
      In connection with a system upgrade, a coding error is introduced into a lender’s
      system such that the representative credit score is incorrectly calculated.
      The lender reports inaccurate representative credit scores at loan delivery
      for ﬁve or more loans. After the loans obtain relief, a review of the credit
      reports in the lender’s origination ﬁles shows that for these mortgages, the
      actual representative credit scores were lower than those reﬂected in the data
      provided at delivery. The DU simulator, using the actual representative credit
      scores, produces an “ineligible” recommendation for each loan. The lender must
      repurchase the aﬀected loans, if requested, despite the fact that the loans
      have obtained relief. For unknown reasons over a period of time, the lender’s
      origination system indicated that TILA-exempt investment property loans were
      principal residences. This error was reﬂected both in the DU submission and
      in the ULDD data at delivery for 30 loans. After the loans obtained relief,
      a review of the documentation in the lender’s loan ﬁles uncovers the error.
      The DU simulator, using the correct, revised data, produces an “Approve/Eligible”
      recommendation on 20 of the loans and a “Refer with Caution/Ineligible” recommendation
      on the other 10 loans. Fannie Mae will not require the lender to repurchase
      the 20 loans, but may assess increased loan-level price adjustments to reﬂect
      their actual risk. However, if requested, the lender must repurchase the 10
      loans that received a “Refer with Caution/Ineligible” recommendation. Life-of-Loan
      Exclusions: Clear Title/First-Lien Enforceability The lender is responsible
      for representations and warranties for the life of the loan that pertain to
      clear title and ﬁrst-lien enforceability. A mortgage loan must be sold by a
      lender that was the sole owner and holder of the mortgage loan and had the full
      right and authority to sell and assign it, or a participation interest therein,
      to Fannie Mae. The lender’s right to sell or assign the mortgage loan cannot
      be subject to any other party’s interest or to an agreement with any other party;
      be a valid and subsisting ﬁrst lien enforceable in accordance with its terms
      (with no pending condemnation or other legal proceedings) and that otherwise
      meets Fannie Mae’s requirements for loan documents; have a mortgagee policy
      of title insurance meeting Fannie Mae’s requirements, or other title evidence
      acceptable to Fannie Mae. Lenders continue to be responsible for all warranties
      related to title, marketability, and lien position, regardless of whether included
      or excluded by coverage under a Published May 6, 2026 36 mortgagee policy of
      title insurance. Any defect shown on the title policy would not be considered
      to be an acceptable minor impediment if there was additional cost or delay involved
      in curing such defect; permit foreclosure or other enforcement of the note holder’s
      rights under the loan documents and acquisition of good and marketable title
      to the underlying security property without incurring any expenses or delays
      as a result of any matters aﬀecting title to the property, including legal or
      land use restrictions or other defects relating to the land or location of the
      improvements. Examples Examples of a breach of these clear title/ﬁrst-lien enforceability
      requirements include, but are not limited to, the following: Another party,
      such as a warehouse lender, asserts a claim to or interest in the loan. Fannie
      Mae is unable to obtain clear title to the property because it is not in ﬁrst-lien
      position. The lender fails to properly endorse the note or to adhere to requirements
      for the use of powers of attorney. A mortgage loan is delivered to Fannie Mae
      with a Property Assessed Clean Energy (PACE) loan secured by the same property
      and the mortgage loan does not meet Fannie Mae’s eligibility requirements for
      mortgages delivered with PACE loans. Improvements that were included in the
      appraised value of the property do not fall totally within the property’s boundaries
      or building restriction lines and were not otherwise permitted encroachments
      under the terms of the Selling Guide. A mortgage loan is delivered to Fannie
      Mae that is secured by a property encumbered by private transfer fee covenants
      that do not meet Fannie Mae’s requirements. Life-of-Loan Exclusions: Compliance
      with Laws and Responsible Lending Practices The lender is responsible for representations
      and warranties for the life of the loan that pertain to compliance with laws
      and responsible lending practices. A mortgage loan must be originated in compliance
      with applicable laws and regulations as set forth in A3-2-01, Compliance With
      Laws; Fannie Mae’s responsible lending policies as set forth in A3-2-02, Responsible
      Lending Practices; and policies adopted by Fannie Mae to implement or comply
      with directives or regulations issued by FHFA, including the following: Appraiser
      Independence Requirements, Property Data Collector Independence Requirements,
      private transfer fee requirements, and Ability to Repay Loan Eligibility Requirements
      as set forth in B2-1.5-02, Loan Eligibility. Examples Examples of breach of
      compliance with laws, responsible lending practices requirements, and FHFA directives
      Published May 6, 2026 37 include, but are not limited to, the following: The
      appraisal for a mortgage loan does not conform to the Appraiser Independence
      Requirements (FHFA directive) The property data collection does not conform
      to the Property Data Collector Independence Requirements (FHFA directive) A
      mortgage loan is secured by a unit in a condo project that was not created in
      compliance with applicable state law. (Compliance with Laws) A mortgage loan
      has a borrower that is an inter vivos revocable trust that was not formed in
      accordance with applicable law. (Compliance with Laws) A Texas Section 50(a)(6)
      loan was not originated in accordance with Texas law. (Compliance with Laws)
      A lender charged total points and fees for an ATR Covered loan in excess of
      the applicable limit on such points and fees in Regulation Z, 12 CFR § 1026.43(e)(3).
      (Compliance with Laws) A HOEPA loan. (Responsible Lending Practices) Note: Whether
      any loan is subject to repurchase for noncompliance with laws will depend on
      whether the conditions for repurchase in A3-2-01, Compliance With Laws, are
      satisﬁed. Loans that are not subject to repurchase under A3-2-01 may be subject
      to other remedies. Loans that violate Fannie Mae’s Responsible Lending Practices
      or an FHFA directive are subject to repurchase. Life-of-Loan Exclusions: Unacceptable
      Mortgage Products Certain mortgage loan products are not purchased by Fannie
      Mae. As such, these products are not eligible for the enforcement relief described
      in A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and
      Warranties Related to Underwriting and Eligibility. Note that the list below
      is not intended to be exhaustive; it should be used as a reference tool in conjunction
      with the requirements of the Selling Guide. Examples of loan products that Fannie
      Mae does not purchase are mortgages with an interest-only feature; graduated-payment
      mortgages, including growing-equity mortgages; mortgages originated with stated
      or no income and/or asset documentation (high LTV reﬁnances are not covered
      by this provision); mortgages subject to negative amortization; construction
      mortgages (other than construction-to-permanent); daily simple interest mortgages;
      mortgages with prepayment penalties; reverse mortgages; mortgages with balloon
      payments (with or without a reset option); and second liens or other junior
      mortgages. Recent Related Announcements Published May 6, 2026 38 The table below
      provides references to recently issued Announcements that are related to this
      topic. Announcements Issue Date Announcement SEL-2023-07 August 02, 2023 Announcement
      SEL-2019-07 August 07, 2019 Chapter A2-3, Lender Breach of Contract Introduction
      This chapter addresses the remedies available to Fannie Mae when a lender breaches
      the Lender Contract. Section A2-3.1, Lender Breach of Contract'
  judgment: false
