Lender Eligibility Requirements and Application Process
Fannie Mae approves or declines a lender based on an assessment of its total circumstances. A lender that satisfies Fannie Mae’s general eligibility criteria or any special criteria does not have a right to enter into a seller/servicer contract and should not expect to do so automatically. Whether or not Fannie Mae elects to enter into a seller/servicer relationship with any lender is at Fannie Mae’s sole discretion and is based on Fannie Mae’s business judgment with respect to the totality of the lender’s circumstances and Fannie Mae’s interests.
To become a Fannie Mae multifamily lender, you must:
- Demonstrate that the senior management team has significant experience in origination, underwriting and servicing of multifamily mortgage loans that comply with Fannie Mae underwriting requirements and risk tolerance, and contribute to the strategic objectives and mission of Fannie Mae.
- Be willing and able to share in and retain a meaningful percentage of the risk of loss and to service all multifamily mortgage loans that you sell to Fannie Mae through the life of the loan.
- Have and retain highly competent and experienced staff, including a Chief Underwriter approved by Fannie Mae that is responsible for all underwriting decisions.
- Be able to market Fannie Mae mortgage-backed securities to capital markets investors.
- Pay Fannie Mae’s third-party costs and expenses for due diligence.
- Enter into our Multifamily Selling and Servicing Agreement.
- Satisfy any additional eligibility criteria Fannie Mae imposes. Such additional criteria may apply to individual lenders, all lenders that are seeking approval to sell and/or service certain types of mortgages, all lenders that share certain characteristics, or all lenders.
In addition, your organization must at the time of approval and on an ongoing basis:
- Meet and maintain compliance with certain financial requirements, including:
- minimum net worth acceptable to Fannie Mae or an explicit guaranty of your loss sharing obligations from an investment grade rated affiliate entity;
- pledge cash or other eligible liquid investments to Fannie Mae to be deposited upon approval with a third-party custodian, with additional risk-based amounts deposited as loans are delivered; and
- maintain adequate on balance sheet operational liquidity based on Fannie Mae servicing portfolio size.
- Provide annual audited financial statements, unaudited quarterly financial statements, and additional financial reporting on at least a quarterly basis.
- Have access to liquidity for funding loans, or ability to secure outside funding such as a warehouse line.
- Meet and comply with other business requirements, including insurance coverages and licensing requirements.
- Have internal audit and management control processes to evaluate and monitor the overall quality of its loan production and servicing.
- Have established processes, resources, and controls to maintain business resiliency; adequately address cybersecurity risks; and comply with the Bank Secrecy Act, OFAC and other regulatory requirements.
Lender Eligibility Requirements
- Have sufficient resources to invest in, use and maintain Fannie Mae required systems for pipeline tracking, underwriting data, loan committing and delivery, including document delivery, loan servicing, etc.
- Provide detailed information on financial condition, staffing, and business activities when requested.
- Permit on-site review of your operations annually or more frequently as needed.
- Deliver a minimum amount of loan production per year, of which a significant amount must meet Fannie Mae’s mission goals. Production requirements are determined on a case-by-case basis and are dependent on the economic and regulatory environment.
- Comply with all requirements of the Multifamily Selling and Servicing Guide found at (https://multifamily.fanniemae.com/applications-technology/dus-navigate) Program Rules, and Multifamily Selling and Servicing Agreement (to be provided at the time of application acceptance).
All required materials must be submitted to [email protected]. Please contact us prior to any submission. We may require additional information and documentation based on your unique circumstances.
- Business strategy contemplated
- Business plan
- Description of products offered
- Corporate governance plan
- Resumes of key management and staff along with proposed employee organizational chart
- Resumes of individuals and/or members of any committee which may be approving loans to be delivered to Fannie Mae, if applicable
- Description of corporate and individual ownership and ownership charts with resumes of any individual owners if privately held
- Description of Board of Directors
- Role in the day-to-day operations
- Authority levels
- Completed Form 4637 Multifamily Lender Certification
- Latest 3 years of audited financial statements of entity and any proposed guarantor
- Pro forma financials for 3 years, including adjustments between current and pro forma closing balance sheet
- Details of ongoing capitalization, including the continuous satisfaction of net worth and liquidity requirements
- Financing arrangements, if separate from equity investment, including proposed warehouse financing agreements
- List of any functions to be outsourced (identifying offshore affiliates and vendors) and description of oversight
- Evidence of fidelity bond and errors and omission coverage to meet Fannie Mae requirements
- Anti-fraud policies and procedures
- Business continuity, technical resiliency, and disaster recovery plans along with evidence of recent testing and results