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Question: I understand Fannie Mae revised its quality control (QC) requirements.  What’s changed?

Answer: Yes, Fannie Mae recently published Selling Guide Announcement (SEL-2025-04), announcing it revised lender quality control requirements effective September 2, 2025.  Some of the updates clarify Fannie Mae’s expectations regarding already existing requirements, while other updates impose new requirements.  Among other things, the updates require the following (please note this is not an all—inclusive list of revisions and updates): 

• For third-party originations: 
  • Lenders must include a post-closing, random sample of third-party originator loans (these random samplings must be full-file reviews); 
  • Lenders must supplement the random sample with discretionary targeted samples focused on third-party originations with elevated risks as determined by the lender’s oversight and control processes (discretionary targeted samples may be full-file reviews or component reviews and may be implemented in prefunding or post-closing);
  • Lenders must select third-party originator loans for QC reviews at least a monthly; 
  • Third party-origination defects and findings must be included in monthly reporting to management; 

• Pre-funding QC reviews – the monthly loan selection must equal, at a minimum, the lesser of: 
  • 10% of the prior month's total number of loans closed or acquired, or 10% of the current month's projected total number of loans to be closed or acquired (if using projections, the lender must perform a reconciliation process to ensure the 10% requirement is met); or 750 loans.

• For post-closing QC reviews, lenders must conduct either a 10% random review or a statistically valid sample of all monthly loan production; 

• Lenders must maintain an established written corrective action plan within their QC Plan for when they identify defect trends through the QC review process.  
  • The plan must include root cause analysis, responsible parties/key personnel, the expected resolution, and timeframes for implementation and completion; 

• Lenders must include the following in their QC reports (see the revised Selling Guide for additional requirements for both pre- and post-closing QC reports):
  • The report date; 
  • Sample selection descriptions and calculations used to determine the sample size; 
  • The rationale for each discretionary and component review; 
  • Summaries of results for all random, discretionary, and component reviews, including third-party originator reviews; 
  • Defect rates and trending for the past three months for all defect severity levels using both defect category and subcategory; 
  • Resolution of specific defects; 
  • Corrective action plans to address specific defects and defect trends; and 
  • Tracking of reverification results (including the request date and details for successful and unsuccessful attempts); 

• Lenders must perform an occupancy assessment for all QC full-file reviews (both pre-funding and post-closing) and for all occupancy types (principal residences, second homes, and investment properties); 
  
  
• Lenders must ensure that they reverify income/employment through the closing date; 
  
  
• A lender must notify Fannie Mae within 30 days of the date of confirmation that one or more defects identified through the QC file review process results in the loan being ineligible as delivered to Fannie Mae.
  • “Confirmation date” means the publication date of the QC report identifying the ineligible loan; and 

• A lender’s QC Plan must include written procedures for reporting the results of the QC file reviews, including maintaining a record of loans self-reported to investors.

Fannie Mae encourages lenders to implement the changes outlined in the updated Selling Guide immediately, but in no event later than the effective date.