B2-2-01, General Borrower Eligibility Requirements (12/14/2022)

General Borrower Eligibility Requirements

Fannie Mae purchases or securitizes mortgages made to borrowers who are natural persons and have reached the age at which the mortgage note can be enforced in the jurisdiction where the property is located. There is no maximum age limit for a borrower.

Exceptions to the requirement that borrowers be natural persons are:

• inter vivos revocable trusts,

• HomeStyle Renovation mortgages, and

• land trusts in those states where the beneficiary is an individual. (Note: Fannie Mae permits land trusts on a negotiated basis for states where land trusts are widely accepted.)

See the following for additional information:

• B2-1.3-04, Prohibited Refinancing Practices,

• B2-2-04, Guarantors, Co-Signers, or Non-Occupant Borrowers on the Subject Transaction

• B2-2-05, Inter Vivos Revocable Trusts,

• B5-3.2-02, HomeStyle Renovation Mortgages: Loan and Borrower Eligibility, and

• Community Land Trusts in B5-5.3-01, Shared Equity Overview.

General Borrower Identity Criteria

A borrower is any applicant (e.g., individually or jointly) whose credit is used for qualifying purposes to determine ability to meet Fannie Mae’s underwriting and eligibility standards. “Co-borrower” is a term used to describe any borrower other than the borrower whose name appears first on the note.

Lenders must confirm each borrower’s identity prior to the extension of credit. Fannie Mae’s requirements for borrower identity verification are intended to align with lenders’ existing federal obligations under laws requiring information and document verification, including the Department of Treasury's Office of Foreign Assets Control (OFAC) regulations and the U.S. Patriot Act. See  A3-2-01, Compliance With Laws, for additional information concerning borrower identity verification.

Tax Identification Numbers

Fannie Mae requires that each borrower have a valid Social Security number or Individual Taxpayer Identification Number (ITIN), in addition to meeting existing legal residency and documentation requirements. (For additional information, see B2-2-02, Non–U.S. Citizen Borrower Eligibility Requirements.)

DU and Loan Delivery may identify data integrity issues pertaining to the borrower’s Social Security number. Lenders must take steps to resolve any issues, including invalid format, numbers not issued, borrower age/issue date discrepancies, or Social Security numbers associated with deceased individuals. If a lender cannot resolve any Social Security number inconsistencies, the lender must validate the Social Security number directly with the Social Security Administration (SSA). The following requirements apply:

• The lender may use one of the two methods listed below to validate a borrower's Social Security number:

  • Form SSA–89 (Authorization for the Social Security Administration to Release Social Security Number Verification), or
  • Electronic Consent Based Social Security Number Verification (eCBSV) Service.

• If using a third-party vendor, the lender must ensure that the vendor goes directly to the SSA to validate the Social Security number using one of the two methods listed above.

• The lender must retain documentation in the loan file that evidences the validation of the Social Security number.

• The lender must deliver the loan with SFC 162 if the Social Security number was validated through the SSA but there is a discrepancy identified with the Social Security number in the credit report, DU, or Loan Delivery edits. 

• If the Social Security number cannot be validated with the SSA, the loan is not eligible for sale to Fannie Mae.

Establishing Borrower Ownership Interest

A borrower must establish ownership interest in the security property and become liable for the note (whether individually or jointly) by:

• signing the security instrument,

• signing the mortgage or deed of trust note,

• taking title to the property in the name of the individual borrower(s).