source:
  type: guide
  id: fnma-sel-b3-2-07
  authority: Fannie Mae Selling Guide B3-2-07 — Refer with Caution Recommendations
  description: Fannie Mae Selling Guide B3-2-07 — Refer with Caution Recommendations.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-2-07-full
  canonical_id: fnma-sel-b3-2-07-full
  section: Fannie Mae Selling Guide B3-2-07 — Refer with Caution Recommendations
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-2-07 — Refer with Caution Recommendations
    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: 'B3-2-07, Refer with Caution Recommendations (02/01/2023) Introduction
      This topic contains information on Refer with Caution recommendations, including:
      Overview of Refer with Caution Recommendations Lender Response to a Refer with
      Caution Recommendation Overview of Refer with Caution Recommendations The layering
      and degree of risk factors that result in a Refer with Caution recommendation
      represent a greater risk of serious delinquency than for those loan caseﬁles
      that receive an Approve recommendation. Any loan caseﬁle that receives a Refer
      with Caution recommendation from DU does not represent a level of risk that
      is acceptable to Fannie Mae for DU loans. If the data DU considered was an accurate
      representation of the borrower’s income, assets, liabilities, and credit proﬁle,
      the loan is not eligible for sale to Fannie Mae as a DU loan. Published May
      6, 2026 292 The following table provides further information about this DU recommendation.
      Refer with Caution Eligible for Fannie Mae’s limited waiver of certain mortgage
      eligibility and underwriting representations and warranties? No Satisﬁes Fannie
      Mae’s credit risk standards/assessment? No, the loan does not meet Fannie Mae''s
      credit risk standards for DU loans. Satisﬁes Fannie Mae’s mortgage eligibility
      criteria? No, the loan does not meet Fannie Mae''s stated eligibility requirements
      for DU loans. Eligible for sale to Fannie Mae? Not as a DU loan. The lender
      may manually underwrite the loan in accordance with this Selling Guide if the
      loan product or transaction otherwise allows for sale of manually underwritten
      loans. See B3-1-01, Comprehensive Risk Assessment and the Eligibility Matrix
      for appropriate eligibility requirements and considerations. Lender Response
      to a Refer with Caution Recommendation When a loan caseﬁle receives a Refer
      with Caution recommendation, the lender should: Review the DU loan data for
      accuracy and verify that all income, assets, and liabilities were accurately
      recorded and fully disclosed by the borrower. Determine if there is any information
      outside of the data submitted to DU that could have aﬀected DU''s recommendation.
      Update the loan application data (if applicable) and resubmit the loan caseﬁle
      to DU for an updated recommendation. Review the credit report data to determine
      if the information accurately represents the applicant’s credit history. Erroneous
      data in the credit report, or contradicting or derogatory information, could
      have aﬀected DU’s recommendation. (See B3-2-01, General Information on DU, for
      additional guidance.) Investigate whether there were any extenuating circumstances
      that contributed to serious instances of derogatory credit. If the loan caseﬁle
      still receives a Refer with Caution recommendation, the lender may manually
      underwrite the loan in accordance with the requirements in the table above.
      Published May 6, 2026 293 Recent Related Announcements The table below provides
      references to recently issued Announcements that are related to this topic.
      Announcements and Release Notes Issue Date Announcement SEL-2023-01 February
      01, 2023'
  judgment: false
