Selling Guide

Published June 3, 2020

The Selling Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Selling Guide in PDF format.

View All Selling Policy Updates

Download PDF

Hint: Ask in a form of a question.

For best results, pose your search like a question.

C1-1-01, Execution Options (08/29/2017)


This topic provides general information about selling whole loans to Fannie Mae and pooling loans into MBS, including:


Volume Limitations

In conjunction with Section III. D of the Mortgage Selling and Servicing Contract, which provides that Fannie Mae is under no obligation to make a commitment to purchase any mortgage or participation interest from the lender, the following policies apply with regard to volume limitations:

  • Fannie Mae may establish, amend, or cancel any mortgage loan volume limitations specific to a lender, which may be applicable to aggregate whole loan deliveries and sales, deliveries and sales in exchange for MBS, or both.

  • Fannie Mae may also decline to engage in any specific transaction with a lender.

Volume limitations

  • may apply to volumes delivered on a daily, monthly, or quarterly basis, or as otherwise determined by Fannie Mae in its sole discretion, and any such limitation will supersede any higher daily limitation set forth in the Selling Guide ( C2-1.1-03, Mandatory Commitment Terms, Amounts, Periods and Other Requirements) or Master Agreement;

  • will apply even though the mortgage loans comply with all applicable provisions of the Selling Guide; and

  • will apply without regard to Fannie Mae’s confirmation of any commitment taken by the lender in the whole loan or MBS committing application and/or other commitment.


Note: Any confirmation made while a lender is over any such limitation or that would cause a lender to exceed such limitation may, at the option of Fannie Mae, be suspended or terminated, and the lender may be required to pair off such commitment(s).


Fannie Mae may impose volume limitations at any time, in its sole discretion, with no requirement that the lender be in default of any of its obligations under the Lender Contract. Fannie Mae’s decision not to impose volume limitations against a lender does not mean that Fannie Mae condones any action or inaction by the lender, or that Fannie Mae is waiving its right to impose any such limitations in the future. Volume limitations will be effective when imposed, unless otherwise stated.


Whole Loan Commitments

Using Fannie Mae’s whole loan committing application, lenders can enter into a mandatory or a best efforts commitment to sell whole loans to Fannie Mae for cash.

  • With a mandatory commitment, the lender agrees to deliver a specified dollar amount of loans, within certain tolerances, to Fannie Mae by a specified future date. Fannie Mae agrees to purchase those loans at an agreed-upon price. If a lender is unable to meet the terms of the agreement, it may have to pair off the commitment, which may require payment to Fannie Mae of a fee (called a pair-off fee) or the transaction may be eligible for a cash back pair-off. See C2-1.1-04, Mandatory Commitment Extensions and Pair-Offs, for additional information.

  • With a best efforts commitment, the lender agrees to deliver a specific loan to Fannie Mae by a specified date if that loan closes. If the loan does not close, the lender does not have to pay a fee. However, if the loan is closed, the lender must deliver the loan to Fannie Mae. If the lender changes the loan status to “Closed” and then does not deliver the loan, Fannie Mae may assess a pair-off fee.

For additional information, see C2-1, Mandatory and Best Efforts Commitments to Sell Whole Loans.


MBS Commitments

Using Fannie Mae’s MBS committing application, lenders can enter into mandatory commitments to sell MBS loans to Fannie Mae.

  • With an MBS commitment, the lender agrees to sell a certain volume of mortgage loans having a specified set of loan parameters to Fannie Mae. Fannie Mae provides the lender with guaranty fee pricing for such mortgage loans for delivery under MBS execution. If a lender is unable to meet the terms of the commitments, it has the option to roll or pair off the commitments, which may require payments to Fannie Mae of a fee (referred to as a “roll fee” or “pair-off fee”).

For additional information, see C3-2-04, Mandatory MBS Commitments.


Pooling Loans Into a Fannie Mae Trust for MBS

Lenders can obtain pool purchase contracts that enable them to sell Fannie Mae pools of loans with similar characteristics. In exchange, Fannie Mae will issue an MBS backed by those loans. MBS can be created for either swap-and-hold or swap-and-sell transactions. With a swap-and-hold transaction, the lender holds the security after it is created; whereas with a swap-and-sell, the security is immediately sold to other investors.

Minimum submission amounts (by aggregate issue date principal balance) required are:

  • fixed-rate mortgage loans, single-lender pools: $1 million

  • adjustable-rate mortgage loans, single-lender pools: $500,000

  • Fannie Majors, multiple-lender pools: $1,000. (Fannie Majors pools in aggregate must meet the minimum amounts noted above to be opened.)

For additional information, see Subpart C3, Mortgage Backed Securities.


Bulk Transactions Options

In addition to selling their current production on a flow basis, lenders can sell a wide variety of closed loans to Fannie Mae under MBS or whole loan transactions. For bulk transactions, lenders must contact their Fannie Mae customer account team or the Capital Markets Pricing and Sales Desk to determine what type of contract to use for MBS deliveries.


Pricing, Fees, and Loan-Level Price Adjustments

When lenders commit to sell whole loans for cash, Fannie Mae provides a “live” price, so named because prices move throughout the day, generally in tandem with the MBS market. Live pricing options for mandatory whole loan commitments and best efforts commitments are posted within Fannie Mae’s whole loan committing application.

Lenders that participate in Fannie Mae’s MBS program pay Fannie Mae a guaranty fee remittance each month as compensation for the right to do so. Factors used to calculate the guaranty fee remittance rate include the credit risk of mortgages included in the pool, the servicing option that applies to each mortgage in the pool, and the remittance cycle that applies to the pool. The specific guaranty fee applicable to an MBS mortgage loan is set forth in the related MBS commitment between Fannie Mae and the lender.


Note: Any pricing changes that are directed by Fannie Mae’s regulator will not affect the base guaranty fee reflected in any existing commitment unless required by the regulator. If this occurs, the lender will have the option of canceling any commitments that could be affected by the base guaranty fee change, with no pair-off, roll or extension fees due from the lender.


Lenders that elect to trade their MBS can obtain price indications by contacting Fannie Mae’s Capital Markets Pricing and Sales Desk (see E-1-03, List of Contacts) or via various financial information service providers. Prices are based on pass-through rates, maturities, and other factors.

For both whole loan and MBS transactions, Fannie Mae may apply one or more loan-level price adjustments (LLPA) that are charged at loan delivery based on certain loan-level credit risk characteristics, such as credit score, loan purpose, occupancy, number of units, and product type. All LLPAs are calculated based on the acquisition date principal balance of the mortgage loan and are cumulative.

All applicable LLPAs for whole loan transactions will be deducted from the purchase proceeds. All applicable LLPAs for MBS transactions will be drafted from the lender’s account designated for that purpose.

Lenders may be eligible for an LLPA refund on certain mortgage loans repurchased by the lender, as determined by Fannie Mae in its sole discretion. The refund will be calculated based on the LLPAs charged at acquisition less a processing fee of 50 basis points of the unpaid principal balance at acquisition. If the total of all LLPAs paid by the lender for a mortgage loan is 50 basis points or less, Fannie Mae will not refund the LLPA. The LLPA refunds are available only for mortgage loans originally delivered as whole loans and repurchased within 18 months of acquisition by Fannie Mae. The refunds will be issued to the responsible party for the selling representations and warranties as a separate transaction (independent from the repurchase transaction) in the month following the completion of the repurchase.

For a current listing of LLPAs, see the Loan-Level Price Adjustment (LLPA) Matrix .


Premium Pricing Recapture

With respect to any mortgage loan that pays off within 120 days from the whole loan purchase date or the MBS issue date, Fannie Mae in its sole discretion may require reimbursement by the lender for any premium paid in connection with the purchase of the mortgage loan. In Fannie Mae’s sole discretion, the premium reimbursement amount may be reduced by the amount equal to the total of all LLPAs paid in connection with delivery of a mortgage loan less a processing fee of 50 basis points based on the unpaid principal balance at acquisition. For a whole loan, the premium is the amount that the purchase price exceeded the par price (100% of the face value) multiplied by the unpaid principal balance of the mortgage loan at the time of purchase. In the case of a mortgage delivered for MBS, the premium is the percentage amount above a par price that would have been applicable to the related MBS on the actual settlement date multiplied by the unpaid principal balance of the mortgage loan on the issue date.

For mortgage loans repurchased by a lender, Fannie Mae in its sole discretion may require reimbursement by the lender for any premium paid in connection with the purchase of the related repurchased mortgage loan without regard to the 120–day limitation.

Note: Fannie Mae may require this reimbursement on a mortgage loan in an MBS regardless of the MBS investor.



No Assignment of Whole Loan or MBS Commitments

For information on assignment of Fannie Mae whole loan or MBS commitments see A2-1-01, Contractual Obligations for Sellers/Servicers.

Have You Tried Ask Poli?

Poli knows. Just ask.

Ask Poli features exclusive Q&As and
more—plus official Selling & Servicing

Try Ask Poli

Related Articles

Have guide questions? Get answers to all of your policy questions, straight from the source.

Get Started
Having Issues with Seeing this Page Correctly?

Use Firefox or Chrome   How to do a hard refresh in Internet Explorer
We recommend that you use the latest version of FireFox or Chrome.

Download Firefox
Download Chrome
  A hard refresh will clear the browsers cache for a specific page and force the most recent version of a page.
    Hold the Ctrl key and press the F5 key.

Email Us
If you still have Technical Support questions, feel free to