source:
  type: guide
  id: fnma-sel-b3-5.3-09
  authority: Fannie Mae Selling Guide B3-5.3-09 — DU Credit Report Analysis
  description: Fannie Mae Selling Guide B3-5.3-09 — DU Credit Report Analysis.
  coverage_tier: operative
obligations:
- id: fnma-sel-b3-5.3-09-full
  canonical_id: fnma-sel-b3-5.3-09-full
  section: Fannie Mae Selling Guide B3-5.3-09 — DU Credit Report Analysis
  type: do
  tags:
  - regulator-direct
  - fnma
  - selling-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Fannie Mae Selling Guide B3-5.3-09 — DU Credit Report Analysis
    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: 'B3-5.3-09, DU Credit Report Analysis (02/05/2025) Introduction
      This topic describes how DU analyzes credit report data and requirements lenders
      must follow in response to the credit-related Findings messages. This topic
      includes: Inquiries Trended Credit Data Omitted Accounts Authorized User Tradelines
      Disputed Credit Report Tradelines DU Debt Comparison Contradictory, Derogatory,
      or Erroneous Information Duplicate Public Records Judgments and Liens Mortgage
      Delinquencies Past-Due, Collection, and Charge-Oﬀ of Non-Mortgage Accounts Prior
      Bankruptcy, Foreclosure, Deed-in-Lieu of Foreclosure, Preforeclosure Sales,
      and Charge-Oﬀ of Mortgage Accounts Bankruptcy Foreclosure Deed-in-Lieu of Foreclosure
      Preforeclosure Sales or Short Sales Charge-Oﬀ of Mortgage Accounts Inquiries
      The lender should examine inquiries to determine whether they represent potential
      sources of undisclosed credit. If new debt was obtained, the lender may need
      to correct the loan application and resubmit it. Trended Credit Data Lenders
      are not required to analyze trended credit data in the credit report. For more
      information, see B3-2-03, Risk Factors Evaluated by DU. Omitted Accounts Supporting
      documentation is required when a credit report liability with a balance greater
      than zero is omitted from the loan application. Published May 6, 2026 478 Authorized
      User Tradelines DU takes credit report tradelines designated as authorized user
      tradelines into consideration as part of the DU credit risk assessment. However
      the lender must review credit report tradelines in which the applicant has been
      designated as an authorized user in order to ensure the tradelines are an accurate
      reﬂection of the borrower''s credit history. If the lender believes the authorized
      user tradelines are not an accurate reﬂection of the borrower''s credit history,
      the lender should evaluate the borrower''s credit history without the beneﬁt
      of these tradelines and use prudent underwriting judgment when making its ﬁnal
      underwriting decision. In order to assist the lender in its review of authorized
      user tradelines, DU issues a message providing the name of the creditor and
      account number for each authorized user tradeline identiﬁed. When ensuring tradelines
      are an accurate reﬂection of the borrower''s credit history, as a general guide,
      if the borrower has several authorized user accounts but only has a few accounts
      of their own, the lender should establish: the relationship of the borrower
      to the owner of the account, if the borrower uses the account, and if the borrower
      makes the payments on the account. If the authorized user tradeline belongs
      to another borrower on the mortgage loan, no additional investigation is needed.
      On the other hand, if the borrower has several tradelines in good standing and
      only a minor number of authorized user accounts, the lender could make the determination
      that: the authorized user accounts had minimal, if any, impact on the borrower''s
      overall credit proﬁle; and the information reported on the credit report is
      an accurate reﬂection of the borrower''s credit history. The lender is not required
      to review an authorized user tradelines that belongs to the borrower''s spouse
      when the spouse is not on the mortgage transaction. For manual underwriting
      consideration of authorized users of credit, see B3-5.3-06, Authorized Users
      of Credit. Disputed Credit Report Tradelines When the credit report contains
      tradelines disputed by the borrower, DU will ﬁrst assess the risk of the loan
      caseﬁle using all tradelines, including those disputed. If DU issues an Approve
      recommendation using the disputed tradelines, no further documentation or action
      is necessary. DU will issue a message speciﬁc to this scenario. If DU does not
      issue an Approve recommendation when including the disputed tradelines, DU will
      re-assess the risk without using the disputed tradelines. If DU is then able
      to issue an Approve recommendation, the lender must investigate the tradelines
      to determine whether the borrower is responsible for the accounts or if the
      account information is accurate or complete. If the borrower is not responsible
      for the disputed accounts, the lender must obtain supporting documentation and
      may deliver the loan as a DU loan. No further action is necessary regarding
      the disputed tradelines. Published May 6, 2026 479 If the borrower is responsible
      for the disputed account, the lender must investigate the information, including
      determining the aspect of the tradeline that is being disputed. If the borrower
      is able to provide documentation to disprove any adverse information (such as
      canceled checks), the lender may deliver the loan as a DU loan. If the borrower
      is responsible for the disputed account and the account and tradeline information
      is accurate and complete, the loan is not eligible for delivery as a DU loan.
      The lender may manually underwrite the loan if the transaction is eligible for
      manual underwriting. The monthly payments for the disputed tradelines must be
      included in the debt-to-income ratio if the accounts belong to the borrower.
      Note: Tradelines reported as medical debt are not shown in the disputed tradeline
      message. Therefore, lenders are not required to investigate disputed medical
      tradelines. Examples The following scenarios are examples of when a loan receiving
      an Approve/Eligible recommendation with the disputed tradeline(s) excluded from
      DU''s risk assessment would be eligible for delivery as a DU loan: A borrower’s
      account was referred for collection by the creditor. Subsequently, the borrower
      paid oﬀ the account, but the pay-oﬀ was not reported on the tradeline. The borrower
      requested that a dispute be placed on the tradeline. The tradeline information
      was accurate, but because it did not reﬂect that the borrower paid oﬀ the account,
      it may be considered incomplete. The borrower must provide documentation that
      the account was paid in full. A borrower and his son have the same name (Sr.
      and Jr.). The borrower’s credit report contains a tradeline that actually belongs
      to the son. The tradeline is reported as disputed. The borrower can provide
      conﬁrmation that they are not obligated on the account. The servicer of a disputed
      loan indicates a late payment in January of the previous year. The borrower
      can provide documentation (such as canceled checks or bank statements) that
      indicate that the payment was made on time. The following scenario is an example
      of when a loan receiving an Approve/Eligible recommendation with the disputed
      tradeline(s) excluded from DU’s risk assessment would not be eligible for delivery
      as a DU loan: The credit report indicates a disputed tradeline on the borrower’s
      mortgage being reﬁnanced. The tradeline indicates a 60–day late payment in January
      of the previous year. The borrower cannot provide any documentation to support
      that the payment was made on time. DU Debt Comparison DU compares the balances
      and payments of the debts on the credit report with the debts on the loan application.
      If material diﬀerences are found, the lender must conﬁrm that all debts from
      the credit report are included on the loan application and provide documentation
      to support the use of payments and balances lower than those on the credit report.
      If the debt aﬀects the debt-to-income ratio by more than the allowable tolerances,
      the lender must add the debt to the loan application and resubmit the loan.
      Otherwise, the lender is expected to provide documentation that supports the
      omission from the loan application. See B3-6-02, Debt-to- Income Ratios, and
      B3-2-10, Accuracy of DU Data, DU Tolerances, and Errors in the Credit Report,
      for additional Published May 6, 2026 480 information.) Contradictory, Derogatory,
      or Erroneous Information Lenders are obligated to take action when contradictory,
      derogatory, or erroneous information would justify additional investigation
      or would provide grounds for a decision that is diﬀerent from the recommendation
      DU delivers. For example, if the credit report reﬂects a previous foreclosure
      but the information was not accurately mapped to DU, the lender must consider
      this when making its ﬁnal underwriting decision. Duplicate Public Records Items
      that typically appear in the Public Records section of the credit report (judgments,
      bankruptcies, foreclosures, and tax liens) are often duplicated because the
      credit agencies may not attempt to merge items of this severe nature. As a result,
      these items may also appear in more than one veriﬁcation message in the Underwriting
      Findings report. If it is clear from the credit report data that the items are
      duplicates (identical account numbers, date ﬁled, and dollar amounts), the lender
      can disregard the duplicates and document the item once. However, if it is unclear
      from the credit report whether any of the items are duplicated, the lender should
      treat each item individually and obtain the required documentation for each
      item, as indicated in the veriﬁcation messages. Judgments and Liens Open judgments
      and all outstanding liens that are in the Public Records section of the credit
      report will be identiﬁed in the Underwriting Findings report, and must be paid
      oﬀ at or prior to closing. Documentation of the satisfaction of these liabilities,
      along with veriﬁcation of funds suﬃcient to satisfy these obligations, must
      also be maintained in the permanent loan ﬁle. Mortgage Delinquencies DU applies
      the following guidelines to the processing of loans with mortgage delinquencies:
      If any borrower’s credit report contains a mortgage tradeline that is 60 or
      more days past due when the account was last reported by the creditor and the
      account was reported within the 12 months prior to the credit report date, the
      loan caseﬁle will receive an Ineligible recommendation and will be ineligible
      for delivery to Fannie Mae. If there is a mortgage that is disclosed on the
      loan application but not reported on the credit report, or the mortgage is on
      the credit report with an outstanding balance but the payment history has not
      been reported in the last six months, DU will issue a message requiring the
      lender to conﬁrm that the account is not two or more payments past due as of
      the date of the application and that it has not been past due by two or more
      payments in the last 12 months. If the lender determines that the borrower does
      have a mortgage that is past due by two or more payments or has been past due
      by two or more payments in the last 12 months, then the loan caseﬁle is not
      eligible for delivery to Fannie Mae. Borrowers may not bring past-due mortgage
      accounts current prior to closing in order to circumvent Fannie Mae’s policy
      regarding past-due mortgages. However, the lender may apply some discretion
      with Published May 6, 2026 481 regard to the application of this policy if it
      determines and documents that the past-due account status was not the fault
      of the borrower—for example, if the servicer misapplied or lost the borrower’s
      payment. Loan caseﬁles will receive an Ineligible recommendation due to excessive
      prior mortgage delinquency if the borrower has a mortgage tradeline on their
      credit report that has one or more 60-, 90-, 120-, or 150- day delinquency reported
      within the 12 months prior to the credit report date. The above policies will
      apply to all mortgage tradelines, including ﬁrst liens, second liens, home improvement
      loans, HELOCs, and manufactured home loans. Underwriting when the Credit Report
      Contains Inaccurate Mortgage Delinquency Information When DU identiﬁes a mortgage
      delinquency on the credit report and the information is inaccurate, the lender
      may instruct DU to disregard the mortgage delinquency information on the credit
      report. This is done by entering “Conﬁrmed Mtg Del Incorrect” in the online
      loan application and resubmitting the loan caseﬁle to DU. When the loan caseﬁle
      is resubmitted to DU, the mortgage delinquency information on the credit report
      will not be used. If the lender enters “Conﬁrmed Mtg Del Incorrect”, the lender
      must document that the mortgage is not currently 60 days or more past due, and
      has not been 60 days or more past due in the last 12 months. Past-Due, Collection,
      and Charge-Oﬀ of Non-Mortgage Accounts Accounts that are reported as past due
      (not reported as collection accounts) must be brought current. Medical collection
      accounts are excluded from the limits below and are not required to be paid
      in full at or prior to closing. For one-unit, principal residence properties,
      borrowers are not required to pay oﬀ outstanding collections or non-mortgage
      charge-oﬀs—regardless of the amount. Note: If the lender marks the collection
      account Paid By Close in the online loan application, DU will issue a message
      in the DU Underwriting Findings report stating that the collection must be paid.
      For two- to four-unit owner-occupied and second home properties, collections
      and non-mortgage charge- oﬀs totaling more than $5,000 must be paid in full
      prior to or at closing. For investment properties, individual collection and
      non-mortgage charge-oﬀ accounts equal to or greater than $250 and accounts that
      total more than $1,000 must be paid in full prior to or at closing. Prior Bankruptcy,
      Foreclosure, Deed-in-Lieu of Foreclosure, Preforeclosure Sales, and Charge-Oﬀ
      of Mortgage Accounts Per the requirements of B3-5.3-07, Signiﬁcant Derogatory
      Credit Events — Waiting Periods and Re-establishing Credit, an amount of time
      must elapse (the “waiting period”) after a signiﬁcant derogatory credit event
      before the borrower is eligible for a new loan salable to Fannie Mae. The waiting
      period commences on the completion, discharge, or dismissal date (as applicable)
      of the derogatory credit event and ends on the disbursement date of the new
      loan. Because DU does not have the disbursement date of the subject loan, DU
      uses the date of the credit report to measure whether or not the applicable
      waiting period has been met. However, because the Published May 6, 2026 482
      credit report date may not result in an accurate calculation of the waiting
      period (it is earlier than the disbursement date), the lender may use the disbursement
      date to conﬁrm that the waiting period has been met. See the table below for
      additional information. Event Measurement of Waiting Period Bankruptcy Foreclosure
      • If the completion, discharge, or dismissal dates (as applicable) reﬂected
      in the credit report are complete and appear to comply with the applicable waiting
      period requirements, DU will issue a recommendation, but the lender must still
      conﬁrm that the waiting period has been met and may base its determination on
      the disbursement date of the new loan. • If the completion, discharge, or dismissal
      dates (as applicable) reﬂected in the credit report are complete, but do not
      appear to comply with the applicable waiting period requirements, an Ineligible
      recommendation will be issued. DU uses the date of the credit report to determine
      whether or not the applicable waiting period has been met. The lender may obtain
      an updated credit report and resubmit the loan caseﬁle to DU after the required
      time has elapsed or manually underwrite the loan using the disbursement date
      to conﬁrm that the waiting period has been met. • If the completion, discharge,
      or dismissal dates (as applicable) reﬂected in the credit report are incomplete,
      the lender must conﬁrm that the waiting period has been met and may base its
      determination on the disbursement date of the new loan. Deed-in-Lieu of Foreclosure
      Preforeclosure Sale Mortgage Charge-Oﬀ • DU will determine if the date of the
      event was within the applicable waiting period. However, the recommendation
      will not be changed and the lender must conﬁrm the waiting period requirement
      has been met, and may base its determination on the disbursement date of the
      new loan. Note: See B3-5.3-07, Signiﬁcant Derogatory Credit Events — Waiting
      Periods and Re-establishing Credit, for additional information regarding signiﬁcant
      derogatory events. DU is not able to identify whether the borrower’s derogatory
      credit event(s) was the result of extenuating circumstances. See below for information
      on how to treat extenuating circumstances and B3-5.3-08, Extenuating Circumstances
      for Derogatory Credit, for additional information. Published May 6, 2026 483
      Bankruptcy DU applies the following guidelines to prior bankruptcies: If a Chapter
      13 bankruptcy was discharged within the last two years, dismissed within the
      last four years, or ﬁled but neither discharged nor dismissed within the last
      four years, the loan caseﬁle will receive an Ineligible recommendation and will
      be ineligible for delivery to Fannie Mae. If a non-Chapter 13 bankruptcy was
      ﬁled, discharged, or dismissed within the last four years, the loan caseﬁle
      will receive an Ineligible recommendation and will be ineligible for delivery
      to Fannie Mae. DU will not take bankruptcy information in the public record
      section of the credit report into account if the bankruptcy is dated more than
      seven years prior to the credit report date. DU will not take tradeline accounts
      that are reported with a bankruptcy status code or manner of payment (MOP) code
      of “7” into account if there is at least one bankruptcy reported in a public
      record within seven years of the credit report date. In this scenario, DU assumes
      the date ﬁled and the date discharged in the public record are more accurate
      than the dates in the tradeline; i.e., speciﬁc ﬁled and discharged dates do
      not exist in the tradeline. DU will use tradeline accounts that are reported
      with a bankruptcy status code or MOP code of “7” if there is not a bankruptcy
      reported in a public record within seven years of the credit report date. In
      this scenario, the lender will need to verify the actual ﬁled and discharged
      dates to determine that the bankruptcy meets the DU bankruptcy policy. DU is
      not able to determine if multiple ﬁlings have occurred due to the manner in
      which bankruptcies are reported to the credit report. DU will issue a message
      when it appears that there may have been multiple bankruptcy ﬁlings. This message
      will list each of the bankruptcies seen on the credit report, and will instruct
      lenders to ensure the loan caseﬁle meets the criteria for underwriting loan
      caseﬁles with multiple bankruptcies. Underwriting when the Credit Report Contains
      Inaccurate Bankruptcy Information When DU identiﬁes a bankruptcy on the credit
      report and the information is inaccurate, the lender may instruct DU to disregard
      the bankruptcy information on the credit report in the eligibility assessment.
      This is done by entering “Conﬁrmed CR BK Incorrect” in the online loan application
      and resubmitting the loan caseﬁle to DU. When the loan caseﬁle is resubmitted
      to DU, the bankruptcy information on the credit report will not be used. If
      the lender enters “Conﬁrmed CR BK Incorrect”, the lender must document that
      the Chapter 13 bankruptcy was discharged two or more years or dismissed four
      or more years from the disbursement date of the new loan, or that the non-Chapter
      13 bankruptcy was discharged or dismissed four years or more years from the
      disbursement date of the new loan Underwriting when a Bankruptcy Was Due to
      Extenuating Circumstances When DU identiﬁes a bankruptcy on the credit report
      and that bankruptcy was due to extenuating circumstances, the lender may instruct
      DU to disregard the bankruptcy information on the credit report in the eligibility
      assessment. This is done by entering “Conﬁrmed CR BK EC” in the online loan
      application and resubmitting the loan caseﬁle to DU. When the loan caseﬁle is
      resubmitted to DU, the bankruptcy information on the credit report will not
      be used. Published May 6, 2026 484 If the lender enters “Conﬁrmed CR BK EC”,
      the lender must document that the bankruptcy was due to extenuating circumstances,
      and that the Chapter 13 bankruptcy was dismissed two or more years from the
      disbursement date of the new loan, or that the non-Chapter 13 bankruptcy was
      discharged or dismissed two or more years from the disbursement date of the
      new loan. Foreclosure DU applies the following guidelines to prior foreclosures:
      Mortgage accounts, including ﬁrst liens, second liens, home improvement loans,
      HELOCs, and manufactured home loans, will be identiﬁed as a foreclosure if there
      is an MOP code of “8,” or a Remarks Code that indicates a foreclosure is present
      in the credit report data and associated to the tradeline. If a foreclosure
      was reported within the seven-year period prior to the credit report date, the
      loan caseﬁle will receive an Ineligible recommendation and will be ineligible
      for delivery to Fannie Mae. If the ﬁled date and the satisﬁed date of the foreclosure
      are both unknown, but it appears that the foreclosure occurred within the seven-year
      period prior to the credit report date, the lender must conﬁrm that the foreclosure
      did not occur within the most recent seven-year period. Foreclosure laws vary
      by state and the time it takes to complete the process may vary by state. DU
      assumes that the date the foreclosure was reported in the tradeline is the date
      of the foreclosure sale or liquidation. The lender must conﬁrm that all foreclosures
      are satisﬁed. Mortgage accounts that are identiﬁed as a deed-in-lieu of foreclosure
      or preforeclosure sale will not be identiﬁed as a foreclosure. Underwriting
      when Inaccurate Foreclosure Information Exists When DU identiﬁes a foreclosure
      on a credit report tradeline and the foreclosure information on that tradeline
      is inaccurate, the lender may instruct DU to disregard the foreclosure information
      on the credit report in the eligibility assessment. This is done by entering
      “Conﬁrmed CR FC Incorrect” in the online loan application and resubmitting the
      loan caseﬁle to DU. When the loan caseﬁle is resubmitted to DU, the foreclosure
      information on the credit report tradeline will not be used in the eligibility
      assessment. If the lender enters “Conﬁrmed CR FC Incorrect,” the lender must
      then document the foreclosure was completed seven or more years from the disbursement
      date of the new loan, or that the account was not subject to foreclosure and
      the loan complies with all other applicable requirements. Underwriting when
      Extenuating Circumstances Exist When DU identiﬁes a foreclosure on a credit
      report tradeline and that foreclosure was due to extenuating circumstances,
      the lender may instruct DU to disregard the foreclosure information on the credit
      report in the eligibility assessment. This is done by entering “Conﬁrmed CR
      FC EC” in the online loan application and resubmitting the loan caseﬁle to DU.
      When the loan caseﬁle is resubmitted to DU, the foreclosure information on the
      credit report tradeline will not be used in the eligibility assessment. If the
      lender enters “Conﬁrmed CR FC EC,” the lender must then document that the foreclosure
      was due to extenuating circumstances, the foreclosure was completed three or
      more years from the disbursement date of the new loan, and the loan complies
      with all other requirements speciﬁc to a foreclosure due to extenuating circumstances.
      Published May 6, 2026 485 Deed-in-Lieu of Foreclosure DU applies the following
      guidelines to prior DILs: DU will determine if a mortgage tradeline is a DIL
      by using speciﬁc Remarks Codes that are present in the credit report data and
      associated to the tradeline. When DU identiﬁes a DIL, the lender must document
      that the event was completed four or more years from the disbursement date of
      the new loan, or two or more years from the disbursement date of the new loan
      when the lender conﬁrms that the mortgage loan meets the applicable time frames
      and eligibility requirements for a deed-in-lieu of foreclosure due to extenuating
      circumstances. Preforeclosure Sales or Short Sales DU will determine if a mortgage
      tradeline is a PFS by using speciﬁc Remarks Codes that are present in the credit
      report data and associated to the tradeline. When DU identiﬁes a PFS, the lender
      must document that the event was completed four or more years from the disbursement
      date of the new loan, or two or more years from the disbursement date of the
      new loan when the lender conﬁrms that the mortgage loan meets the applicable
      time frames and eligibility requirements for a preforeclosure sale due to extenuating
      circumstances. Charge-Oﬀ of Mortgage Accounts Mortgage accounts, including ﬁrst
      liens, second liens, home improvements loans, HELOCs, and manufactured home
      loans, will be identiﬁed as a charge-oﬀ if there is an MOP code of “9” (collection
      or charge-oﬀ) and there is no information indicating the account may also be
      subject to a foreclosure (MOP code “8” or foreclosure Remarks Code), a deed-in-lieu
      of foreclosure (DIL Remarks Code), or a preforeclosure sale (PFS Remarks Code).
      When DU identiﬁes a charge-oﬀ on a mortgage tradeline, the lender must document
      that the event was completed four or more years from the disbursement date of
      the new loan, or two or more years from the disbursement date of the new loan
      when the lender conﬁrms that the mortgage loan meets the applicable time frames
      and eligibility requirements for a charge-oﬀ due to extenuating circumstances.
      Recent Related Announcements The table below provides references to recently
      issued Announcements that are related to this topic. Announcements Issue Date
      Announcement SEL-2025-01 February 05, 2025 Announcement SEL-2023-03 April 05,
      2023 Published May 6, 2026 486 Announcements Issue Date Announcement SEL-2019-09
      December 04, 2019 Announcement-SEL-2018-05 June 05, 2018 Section B3-5.4, Nontraditional
      Credit History'
  judgment: false
