source:
  type: guide
  id: fnma-sel-d1-2-01
  authority: Fannie Mae Selling Guide D1-2-01 — Lender Prefunding Quality Control
    Review Process
  description: Fannie Mae Selling Guide D1-2-01 — Lender Prefunding Quality Control
    Review Process.
  coverage_tier: operative
obligations:
- id: fnma-sel-d1-2-01-full
  canonical_id: fnma-sel-d1-2-01-full
  section: Fannie Mae Selling Guide D1-2-01 — Lender Prefunding Quality Control Review
    Process
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide D1-2-01 — Lender Prefunding Quality Control
      Review Process
    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: 'D1-2-01, Lender Prefunding Quality Control Review Process (04/01/2026)
      Introduction This topic contains information on the lender’s prefunding QC process
      and loan ﬁle reviews, including: Overview Timing of File Reviews Loan Selection
      Process Review Types Overview The lender must maintain and implement a written
      prefunding QC plan that outlines requirements for reviewing a sample of its
      loans prior to closing or, in the case of loans acquired from a delegated third-
      party, prior to acquisition. The lender must have documented procedures that
      include, at a minimum, the following elements: timing of the prefunding QC ﬁle
      reviews, loan selection process, and veriﬁcation of data and documents. The
      lender’s prefunding QC process must operate independent of the lender’s production
      process, if practical. At a minimum, prefunding QC must be conducted by individuals
      who have no involvement in the origination, processing or underwriting functions
      of the loan being reviewed. The lender’s prefunding QC plan must be designed
      in a manner that supports its ability to identify and address defects prior
      to closing or acquiring the loan. The results of prefunding ﬁle reviews provide
      important and timely feedback, allowing the lender to identify loans with defects
      (such as analysis or calculation errors, inaccurate data, or inadequate documentation)
      prior to closing or acquiring the loan, and prevents the lender from selling
      ineligible loans to Fannie Mae. Timing of File Reviews Prefunding QC reviews
      must be conducted early enough in the origination process to allow adequate
      time to make loan selections, complete the reviews, and properly inform the
      loan production staﬀ so that corrections can be made prior to loan closing or
      acquisition. The lender must complete the review when there is suﬃcient documentation
      in the ﬁle to perform the required review of data and documents described in
      Review Types, below. Loan Selection Process The lender''s prefunding QC plan
      must contain requirements for full-ﬁle reviews and analysis of data and Published
      May 6, 2026 1047 documents prior to funding. In addition to the required full-ﬁle
      reviews, the lender may choose to conduct component reviews by making loan selections
      designed to focus solely on a speciﬁc element of the loan or underwriting component
      (for example, income and employment, assets, credit, or property). Component
      reviews may be completed without performing a full-ﬁle review. They should be
      completed in areas the lender believes pose unique or elevated risk, or to conﬁrm
      that a particular control or process is working as intended, such as newly added
      controls or processes. A full-ﬁle review is a comprehensive review of the underwriting
      decision while a component review is a review of a speciﬁc element. The lender
      must establish and document a monthly process for selecting loans for its prefunding
      QC reviews. The process should take into account the lender’s assessment of
      the risks inherent in its origination processes, business sources, production
      channels, volume, and product mix. The lender should regularly review its risk
      assessments to ensure the sample selected, including sample size, is appropriate.
      The monthly sample must include selections from each of the lender''s production
      channels. Fannie Mae reserves the right to require the lender to make adjustments
      or impose minimum sampling requirements if a lender''s approach does not provide
      adequate representation or eﬀectively identify risk. Review Types Leveraging
      a mix of full ﬁle and component reviews can enable lenders to review more loans
      and provide a broader comprehensive risk review than simply performing a full
      review on all loans sampled. Full-File Reviews Full-ﬁle reviews are comprehensive
      reviews of an underwriting decision and must include review of, at a minimum,
      the following data and documents to ensure the documents are present and complete,
      and that the data relied upon in making the underwriting decision is accurate.
      A full-ﬁle review must include an assessment of all of the following: data entered
      into an automated underwriting system; borrower Social Security number(s); income
      calculations and supporting documentation; employment documentation, including
      verbal veriﬁcation of employment; assets needed to close or meet reserve requirements;
      appraisal or other eligible collateral data or documentation, if applicable,
      including reconciliation of CU ﬂags and messages; adequate mortgage insurance
      coverage as required for the loan transaction. See B7-1-02, Mortgage Insurance
      Coverage Requirements for additional information; and occupancy. For loans with
      income or assets validated by the DU validation service, the lender is not required
      to recalculate validated income or assets as part of its prefunding QC review.
      However, the lender remains responsible for conﬁrming that the veriﬁcation report
      ID matches the ID captured in the ﬁnal DU ﬁndings report and the veriﬁcation
      report has not expired. For all loans, including those with validated income,
      assets, and employment, the lender must continue to ensure the information it
      enters in DU is appropriate based on its review and investigation of any inconsistent
      or contradictory information in the loan ﬁle and the veriﬁcation report. Published
      May 6, 2026 1048 Component Reviews Component reviews focus on speciﬁc elements
      of a loan and typically can be completed more eﬃciently than full-ﬁle reviews.
      Targeting high-risk elements can help create visibility into unknown risks and
      conﬁrm controls are working eﬀectively. Recent Related Announcements The table
      below provides references to recently issued Announcements that are related
      to this topic. Announcements Issue Date Announcement SEL-2026-03 April 01, 2026
      Announcement SEL-2025-04 June 04, 2025 Announcement SEL-2023-09 October 04,
      2023 Announcement SEL-2023-02 March 01, 2023 Chapter D1-3, Lender Post-Closing
      QC Mortgage Review Introduction This chapter explains the requirements for a
      lender’s post-closing QC review process. It addresses the timing of ﬁle reviews,
      the process for selecting random and discretionary loan samples, review of data
      used in underwriting, and reveriﬁcation requirements.'
  judgment: false
