source:
  type: guide
  id: fnma-sel-a2-2-03
  authority: Fannie Mae Selling Guide A2-2-03 — Document Warranties
  description: Fannie Mae Selling Guide A2-2-03 — Document Warranties.
  coverage_tier: operative
obligations:
- id: fnma-sel-a2-2-03-full
  canonical_id: fnma-sel-a2-2-03-full
  section: Fannie Mae Selling Guide A2-2-03 — Document Warranties
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide A2-2-03 — Document 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: 'A2-2-03, Document Warranties (10/06/2021) Introduction This
      topic contains information on document warranties, including: Legal Document
      Warranties Nonstandard Documents Legal Document Warranties Document warranties
      relate to legal documents used for a mortgage, such as security instruments,
      notes, and assignments. Nonstandard Documents When a lender sells Fannie Mae
      mortgage loans that are closed on legal documents other than the current Fannie
      Mae/Freddie Mac uniform instruments, or current Fannie Mae instruments that
      are applicable to the transaction, the lender warrants that the mortgage loans
      otherwise comply with the Lender Contract. The use of nonstandard instruments
      will not preclude it or any subsequent servicer from performing all servicing
      and accounting functions required by Fannie Mae’s Guides. By delivering loans
      not closed on current Fannie Mae instruments, the lender represents and warrants
      as follows: Applicable laws and regulations, enforceability, negotiability —
      No term of the instruments violates applicable laws and regulations, each and
      every term of the instruments is fully enforceable under applicable laws and
      regulations, and the mortgage note constitutes a negotiable instrument under
      the Uniform Commercial Code (UCC) of the applicable jurisdiction(s). Deﬁnition
      of security property — The deﬁnition of security property conforms to the deﬁnition
      used in the Fannie Mae/Freddie Mac uniform instruments, and must include all
      improvements erected on the property (at the time the document is executed and
      in the future), easements, appurtenances, ﬁxtures that are part of the property
      (at the time the document is executed and in the future), and replacements and
      additions to such improvements, appurtenances, and ﬁxtures. Personal property/principal
      residence — A one-unit property that is the borrower’s principal residence may
      not include personal property or other items (such as appliances, furniture,
      or equipment) that might be considered as additional security. Mortgage loans
      secured by a two- to four-unit principal residence or an investment property
      — If personal property is pledged, it may be to the same extent as it is pledged
      by the 1-4 Family Rider (Form 3170). Due on Sale — The instruments for ﬁxed-rate
      conventional mortgage loans include a fully enforceable due-on-sale or due-on-transfer
      clause, except as limited by federal law. “Default” rate of interest — The instruments
      do not include a “default” rate of interest provision. Rights similar to those
      in Fannie Mae/Freddie Mac Uniform Instrument — The instruments do not Published
      May 6, 2026 19 grant more favorable rights to the borrower on default and foreclosure,
      or less favorable rights to the note holder with respect to property insurance
      (including both required insurance and insurance the borrower elects to obtain),
      leasehold interests, other liens on the property, condemnation proceedings,
      or other proceedings that result in a full or partial taking of the property,
      or any other compensation, settlement, or award of damages that is the result
      of damage to, or destruction of, the property than those granted in the Fannie
      Mae/Freddie Mac uniform instruments for the applicable jurisdiction(s). Waivers
      of Rights of Redemption — The instruments include a speciﬁc waiver by the borrower,
      and, if applicable, the borrower’s spouse, of: any legally waivable statutory
      right of redemption after foreclosure, Note: Statutory rights of redemption
      that are not waivable under applicable law are acceptable only to the extent
      the instruments do not grant more favorable rights to the borrower on default
      and foreclosure than those granted in the Fannie Mae/Freddie Mac uniform instruments
      for the applicable jurisdiction. any right of homestead, dower, or similar marital
      right, and rights of presentment and notice of dishonor, if a waiver of rights
      is necessary to protect the note holder’s interest. Right to advance — The instruments
      expressly allow the note holder to advance at any time sums for unpaid insurance
      premiums, property taxes, or any other payments necessary to protect the value
      of the property or the note holder’s rights in the property and permit the note
      holder to collect such amounts from the borrower on a deferred basis. Note holder
      actions to protect the property — The instruments permit the note holder to
      undertake certain actions to protect the property, including securing and repairing
      the property if it has been abandoned, and to add the costs of these actions
      to the amount of the debt. Actions note holder is not obligated to take — The
      instruments do not obligate the note holder to advance additional principal
      sums, forgive or suspend fully or partially scheduled installments or any portion
      of them for the borrower’s beneﬁt, or apply any prior principal prepayment to
      reduce or cure the borrower’s delinquency. Fixed interest rate and level principal
      and interest payments — The instruments provide for ﬁxed interest rates and
      level principal and interest payments, unless the mortgage loan is an adjustable-rate
      mortgage. Replacement Index and Replacement Margin — The instruments for ARM
      loans include the Alternative Reference Rates Committee (ARRC) recommended fallback
      contract language for new closed- end, residential ARMs. (See, for example,
      the Multistate Adjustable-Rate Note 30-Day Average SOFR (Form 3441), paragraph
      4.G. Replacement Index and Replacement Margin.) Maturity date — The instruments
      specify a maturity date. If the instruments do not specify a maturity date,
      the lender warrants that: the mortgage loan will be fully amortized during a
      speciﬁed original term with no subsequent adjustments to the amount payable;
      the entire indebtedness, including any amount previously added to the mortgage
      loan balance and the principal and interest payments, will be secured by the
      mortgage loan and take priority over Published May 6, 2026 20 intervening liens;
      the lien of the mortgage loan is a valid ﬁrst lien; and the priority of the
      mortgage lien at the time of delivery will not be diminished over the term of
      the mortgage loan and, during that time, all sums, including any sums previously
      added to the mortgage loan balance, will be repaid in monthly installments.
      Notice of grievance — The instruments require the lender and the borrower to
      give the other party a notice of any grievance arising under the security instrument
      and to allow the notiﬁed party a reasonable period after receipt of the notiﬁcation
      to cure the grievance before the party providing the notice commences, joins,
      or is joined to a judicial action, as either an individual litigant or as a
      member of a litigant class that seeks redress or recovery in connection with
      the grievance. Maintenance of property — The instruments obligate the borrower
      to maintain the property in a way that prevents deterioration and to repair
      promptly any damage to the property, whether or not such damage is covered by
      insurance. Mortgage Insurance — The instruments provide that the lender, any
      purchaser of the mortgage note, a mortgage insurer other than the insurer of
      the mortgage, any reinsurer, or any other entity (including an aﬃliate of any
      of the foregoing) may receive (directly or indirectly) amounts that derive from
      (or might be characterized as) a portion of the borrower’s payments for the
      mortgage insurance in exchange for sharing or modifying the mortgage insurer’s
      risk or otherwise reducing losses. Borrower’s failure to take a future action
      — The instrument (or any other agreement that the borrower signed) does not
      provide that the borrower’s failure to take a future action requested by the
      lender (such as providing and paying for additional documentation for the transaction
      after the date of loan closing) constitutes a default. Alternatively, if the
      instrument does include such a provision, the lender will not enforce it. Recent
      Related Announcements The table below provides references to recently issued
      Announcements that are related to this topic. Announcements Issue Date Announcement
      SEL-2021-09 October 06, 2021 Announcement SEL-2019-01 February 06, 2019 A2-2-04,
      Limited Waiver and Enforcement Relief of Representations Published May 6, 2026
      21 and Warranties (04/01/2026) Introduction This topic contains information
      on the following: Limited Waiver of Representations and Warranties for Loan
      Caseﬁles Submitted to DU Enforcement Relief of Representations and Warranties
      for Undisclosed Non-Mortgage Debt Enforcement Relief of Representations and
      Warranties for Loans with Data Calculated by Approved Vendor Tools Enforcement
      Relief of Representations and Warranties for Loans with Data Validated by the
      DU Validation Service Enforcement Relief of Representations and Warranties for
      Loans with Income Calculated by Income Calculator Representations and Warranties
      on Property Value for Loan Caseﬁles Submitted to DU Limited Waiver of Representations
      and Warranties for Loan Caseﬁles Submitted to DU Fannie Mae grants a limited
      waiver of certain underwriting representations and warranties to a lender that
      sells an eligible mortgage that is underwritten with DU. If DU returns an Approve/Eligible
      recommendation on the ﬁnal submission of the loan caseﬁle to DU, then Fannie
      Mae will not require the lender to represent and warrant that the mortgage loan
      complies with the requirements of this Guide with regard to the mortgage loan’s
      eligibility for delivery to Fannie Mae and the borrower’s creditworthiness,
      provided that: All data pertaining to the mortgage loan is complete, accurate,
      and not fraudulent, and all data on which the underwriting recommendation was
      based reﬂects the ﬁnal terms of the closed mortgage loan, and otherwise comply
      with the requirements relating to submissions and resubmissions as stated in
      this Guide and any relevant supplemental materials. All data on which DU’s recommendation
      is based complies with Fannie Mae’s veriﬁcation requirements and the mortgage
      loan ﬁle is documented accordingly. The lender uses the appropriate special
      feature codes, as speciﬁed in the delivery reporting requirements of this Guide
      or elsewhere in the Lender Contract. SFC 127 is required for all loans underwritten
      through DU. All Veriﬁcation Messages/Approval Conditions that appear in the
      DU Underwriting Findings report with respect to the related mortgage loan application
      must be satisfactorily resolved, and the mortgage loan ﬁle documented accordingly.
      All other requirements, instructions, and restrictions set forth in this Guide
      and any release notes are complied with by the lender (or DU licensee). The
      lender reports the proper DU-assigned unique loan caseﬁle ID at the time of
      delivery on the appropriate loan schedule or schedule of mortgages. (A DU loan
      caseﬁle ID is unique to an individual mortgage loan. The same caseﬁle ID may
      not be used to underwrite more than one mortgage loan to DU.) The lender pays
      all applicable loan-level price adjustments. Published May 6, 2026 22 The foregoing
      waiver of underwriting representations and warranties does not apply to: loans
      that receive an Out of Scope recommendation, even if the underwriter believes
      that the mortgage should be approved; loans that receive an Approve/Ineligible
      or Refer with Caution recommendation; and the product eligibility representations
      and warranties in Ability to Repay Loan Eligibility Requirements (see B2-1.5-02,
      Loan Eligibility); the eligibility and underwriting representations and warranties
      that apply to the property, including, but not limited to, condition, value,
      or marketability of the property; appraisal or alternative property inspection
      as set forth in this Guide; government loans that are underwritten with DU;
      and seasoned loans, as deﬁned in this Guide. Note: All seasoned loans that are
      delivered to Fannie Mae, including those that received an Approve/Eligible recommendation
      from DU, must meet Fannie Mae’s seasoned mortgage requirements as set forth
      in B2-1.5-02, Loan Eligibility. All other representations and warranties that
      are part of the Lender Contract shall apply. The use of DU does not relieve
      the lender of any obligation set forth in the Lender Contract, except as expressly
      set forth: in this section with respect to Fannie Mae’s limited waiver of representations
      and warranties; and in any DU recommendation or ﬁndings relating to documentation
      requirements, property valuation requirements, and any other similar requirements
      provided by DU, unless such requirements are modiﬁed by B3-2, Desktop Underwriter
      (DU), of this Guide or the lender’s applicable DU license agreements. Enforcement
      Relief of Representations and Warranties for Undisclosed Non- Mortgage Debt
      When a DU loan caseﬁle receives an Approve/Eligible recommendation and a message
      indicating the loan has obtained representation and warranty relief for non-mortgage
      undisclosed liabilities on the ﬁnal DU submission, Fannie Mae will not enforce
      representations and warranties related to such debt obtained by the borrower(s)
      prior to or concurrent with the day of closing. The following details apply:
      All Veriﬁcation Messages and Approval Conditions that appear in the DU Underwriting
      Findings report must be satisfactorily resolved and documented accordingly.
      All data on which DU''s recommendation is based complies with Fannie Mae''s
      veriﬁcation requirements and the mortgage loan ﬁle is documented accordingly.
      If the lender becomes aware of, or the borrower discloses, changes in the terms
      of the loan or veriﬁed information (such as income, assets, or liabilities)
      prior to closing that exceeds the resubmission tolerances speciﬁed in B3-2-10,
      Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report, the data
      must be updated, and the loan caseﬁle resubmitted to DU. If there is information
      that is conﬂicting with or contradictory to the data that was submitted to DU,
      the lender must perform due diligence to investigate and ensure that accurate
      data is entered into DU. DU''s oﬀering of representation and warranty relief
      does not relieve the lender of any of its obligations within the Selling Guide
      related to the identiﬁcation and inclusion of a borrower''s liabilities in the
      DTI and Published May 6, 2026 23 for consideration in underwriting, including
      those that may be identiﬁed throughout the origination and prefunding QC processes.
      Undisclosed mortgage-related debt (including HELOCs and second liens) are excluded
      from eligibility for relief. The loan must close by the credit report expiration
      date. Enforcement Relief of Representations and Warranties for Loans with Data
      Calculated by Approved Vendor Tools The table below details enforcement relief
      for mortgages with data calculated by approved vendor tools. Data Calculated
      by a Fannie Mae-Approved Vendor Tool Fannie Mae will not enforce representations
      and warranties on Details Income the accuracy of the calculation of the amount
      of self-employment income by the tool. The following requirements apply: • the
      information submitted to the tool must be accurate and complete, • the lender
      must not perform any manual overrides of the output results of the tool, • the
      amount of self- employment income entered in DU must match the amount of income
      calculated by the tool, and • the loan must be delivered with SFC 777. In all
      cases, the lender must continue to comply with all DU messages, including documentation
      and determination that age of documentation requirements are met, and determine
      the eligibility of the self- employment income being used to qualify. See B3-3.5-01,
      Underwriting Factors and Documentation for a Self-Employed Borrower for information
      on using other approved vendors. Enforcement Relief of Representations and Warranties
      for Loans with Data Validated by the DU Validation Service In addition to the
      limited waiver of representations and warranties described above, Approve/Eligible
      loans for which DU validated a loan component may also beneﬁt from certain representation
      and warranty enforcement relief. The table below describes the validated component,
      the related enforcement relief, and other details. Published May 6, 2026 24
      Component Validated by DU Fannie Mae will not enforce representations and warranties
      on Details Income • the accuracy of the lender’s income calculations related
      to the validated income, and • the integrity of the data provided on the veriﬁcation
      report. The DU message must indicate that the amount of income entered into
      DU was validated and that the veriﬁcation report is acceptable documentation.
      For loans with income validated using an employment and income veriﬁcation report,
      this applies on a per-borrower, per- income source, per-income type basis. For
      loans with income validated using an asset veriﬁcation report, this applies
      on a per- borrower, per-income source basis. Employment • the borrower’s employment,
      through the time of closing, with the employer attested to on the loan application,
      and • the integrity of the data provided on the veriﬁcation report. The DU message
      must indicate that the employment entered into DU was validated. Applies on
      a per-borrower, per- employer basis. Assets • the suﬃciency of the borrower’s
      assets to satisfy Total Funds to be Veriﬁed as required by DU or a greater amount
      if stated in the DU message, and • the integrity of the data provided on the
      veriﬁcation report. The DU message must indicate that assets were validated.
      Applies on a loan-level basis. The lender must comply with the following additional
      requirements in order for the representation and warranty enforcement relief
      to apply: Published May 6, 2026 25 All of the requirements that pertain to the
      DU validation service must be met. All Veriﬁcation Messages and Approval Conditions
      that appear in the DU Underwriting Findings report, including any related to
      the DU validation service, must be satisfactorily resolved and documented accordingly.
      The loan must close by the "Close by Date" stated in the DU message. If there
      is information that is conﬂicting with or contradictory to the data that was
      submitted to DU, the lender must perform due diligence to investigate and ensure
      that accurate data is entered into DU. Enforcement relief will not apply, regardless
      of DU’s issuance of validation messages, if the lender’s investigation of conﬂicting
      or contradictory information contained in the loan ﬁle or within the veriﬁcation
      report would have impacted the information entered by the lender in DU. For
      more information on the DU validation service, see B3-2-02, DU Validation Service.
      Enforcement Relief of Representations and Warranties for Loans with Income Calculated
      by Income Calculator Income Calculator is an optional tool to assist lenders
      in calculating certain income types. Income Calculator performs a complete analysis
      of a borrower''s qualifying income (for eligible income types) and produces
      a Findings Report. If lenders comply with the following requirements, they will
      receive representation and warranty enforcement relief for the accuracy of the
      income calculation, on an income-source basis, on loans with income calculated
      by Income Calculator. All information submitted to Income Calculator must be
      accurate and complete. A copy of the Findings Report must be kept in the loan
      ﬁle. The amount of income used for qualifying cannot be more than the amount
      calculated by the tool. Lenders must continue to comply with all other Selling
      Guide requirements, including DU messages, as applicable. See B3-3.1-03, Income
      Calculator for additional requirements and technology servicer provider information.
      Representations and Warranties on Property Value for Loan Caseﬁles Submitted
      to DU In addition to the limited waiver and enforcement relief of representations
      and warranties described above, loans may also beneﬁt from waivers or enforcement
      relief of certain representations and warranties related to the appraisal and
      value of the subject property. See A2-2-06, Representations and Warranties on
      Property Value, for more information. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Published May 6, 2026 26 Announcements Issue Date Announcement
      SEL-2026-03 April 01, 2026 Announcement SEL-2025-09 November 05, 2025 Announcement
      SEL-2024-05 August 07, 2024 Announcement SEL-2024-02 March 06, 2024 Announcement
      SEL-2023-11 December 13, 2023'
  judgment: false
