This topic provides Fannie Mae’s requirements for good delivery of whole loans, including:
To receive funding for loans delivered in fulfillment of a mandatory, best efforts, or converted ARM resale commitment, lenders must make “good delivery,” meaning the loans delivered must meet all of Fannie Mae’s underwriting and legal criteria and satisfy the terms of the original commitment.
Fannie Mae’s good delivery requirements are not met unless:
the applicable error-free mortgage documents and data reach the Fannie Mae-approved document custodian no later than the first morning delivery, the day prior to the expiration date of the commitment;
the data reflected on the Loan Schedules pass all of the Fannie Mae purchasing edits;
the aggregate unpaid principal balance of all mortgages delivered under the commitment at least equals Fannie Mae’s minimum required delivery amount (but does not exceed the maximum delivery amount on the expiration day of the commitment); and
the aggregate unpaid principal balance of all mortgages delivered under the commitment does not exceed Fannie Mae's delivery limits for loans with nonstandard characteristics, such as high-balance loans.
To make good delivery on a best efforts commitment, the information concerning the loan that is delivered must match the key data elements specified in Fannie Mae’s whole loan committing application.
For whole loans delivered to Fannie Mae, the first payment date must be no later than two months from the final disbursement date of the loan proceeds. In the case of a single-close construction-to-permanent loan, the two month period begins at the time of the conversion to permanent financing.
The following table provides an example of this requirement.
|If the final disbursement date occurs in...||Then the first payment date must be no later than...|
The following outlines key whole loan requirements:
In the whole loan committing application, high-balance 10-, 15-, 20-, and 30-year fully amortizing fixed-rate mortgage loans are eligible for delivery under standard whole loan mandatory commitments, as long as the high-balance loans do not comprise more than 10% of the aggregate unpaid principal balance of the commitment. If the delivery of a high-balance mortgage loan causes the lender to exceed the 10% limitation, the lender is required to deliver the mortgage loan against a high-balance whole loan commitment. High-balance products are available in the whole loan committing application for this purpose.
The 10% limitation does not apply in the whole loan committing application to high-balance mortgage loans originated with non-TBA-eligible products (for example, ARMs) which may be delivered against standard conforming whole loan commitments, with no restriction on concentration.
For best efforts commitments in the whole loan committing application, 15–year and 30–year fully amortizing fixed-rate high-balance mortgage loans must be delivered under 15–year or 30–year high-balance commitments, respectively. High-balance mortgage loans with 10– or 20–year fixed-rate terms or non-TBA-eligible products (such as ARMs) are not accommodated for best efforts commitments.
See B5-1-01, High-Balance Mortgage Loan Eligibility and Underwriting and B5-1-02, High-Balance Pricing, Mortgage Insurance, Special Feature Codes, and Delivery Limitations for additional information about high-balance mortgage loans.
To make good delivery on a mandatory commitment, lenders must deliver loans for which the total UPB does not fall below the greater of $10,000 or 2.5% of the original commitment amount.
The minimum required delivery amount is an amount that will not fall below the original commitment amount by more than the greater of $10,000 or 2.5% of the original commitment amount, unless a lender requests a partial pair-off of a commitment. If that occurs, the minimum required delivery amount will be reduced to $50 below the revised commitment amount.
The maximum delivery amount is an amount that will not exceed the original commitment amount by more than the greater of $10,000 or 2.5% of the original commitment amount, unless a lender requests an overdelivery. If a lender requests an overdelivery, the maximum required delivery amount will be $50 above the revised commitment amount.
Lenders may request permission via the whole loan committing application for mandatory commitments or by contacting the Capital Markets Pricing and Sales Desk (see E-1-03, List of Contacts) during regular business hours to over deliver, or deliver a total UPB that exceeds the maximum delivery amount.
The maximum overdelivery amount is 25% of the original commitment amount. For example, on an original commitment amount of $150,000, the maximum overdelivery amount is an additional $37,500 (25% of $150,000). In this example, the total delivered against the commitment cannot exceed $187,550 ($150,000 + $37,500 + $50).
After an overdelivery occurs, the maximum delivery tolerance level decreases to $50 above the new commitment amount. For commitments for which the overdelivery calculation (based on 25% of the original commitment amount) is less than $10,000, the high tolerance level becomes the maximum amount the lender can deliver.
Fannie Mae generally bases its decision on whether an overdelivery price adjustment will be due based on the movement in market prices between the date the commitment was originally obtained and the date on which Fannie Mae approved the overdelivery. If a price adjustment is due, Fannie Mae will draft an overdelivery price adjustment from the lender’s designated account on the following business day.
For information about extending and pairing-out of whole loan commitments, see C2-1.1-04, Mandatory Commitment Extensions and Pair-Offs.