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.

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C3-3-01, Determining and Remitting Guaranty Fees (10/25/2011)


This topic provides information on the factors used to determine the amount of a lender’s guaranty fee, including:

Guaranty Fee Overview

The guaranty fee for individual loans included in an MBS pool depends upon the credit risk associated with the loan and the lender’s choice of servicing option and remittance cycle. The guaranty fee remittance for MBS pools is based upon a weighted-average guaranty factor. See below for a description of how to calculate the annualized weighted-guaranty factor and the pool guaranty fee.

Determining the Annualized Weighted-Average Guaranty Fee Factor for a Pool

The annualized weighted-average guaranty fee factor for a pool (expressed in basis points) is determined by multiplying the issue date principal balance of each mortgage loan in the pool (or, in subsequent months, the “scheduled” balance of each mortgage loan) by the applicable guaranty fee rate for the mortgage loan expressed in basis points (adjusted for any remittance cycle adjustments, buyup, or buydown, if applicable), then:

  • summing the products of all the mortgage loans in the pool,

  • dividing that sum by the aggregate issue date principal balance for the pool (or, in subsequent months, by the “scheduled” security balance for the pool), and

  • rounding the result to the nearest hundredth of a basis point.

The result is the annualized weighted-average guaranty fee factor for a pool.

Determining the Monthly Guaranty Fee Remittance for the Pool

The annualized weighted-average guaranty fee factor is then

  • multiplied by the aggregate issue date principal balance of the pool (or, in subsequent months, the “scheduled” security balance for the pool),

  • divided by 120,000, and

  • rounded to two decimal places.

The result is monthly guaranty fee remittance for the pool.

Remitting Guaranty Fees to Fannie Mae

On the 7th day of each month (or, if the 7th is a holiday or weekend, on the preceding business day), Fannie Mae will draft guaranty fee remittances from the custodial bank account the lender designates as its draft account.

If the guaranty fee remittance is to be drafted from the lender’s P&I custodial account for MBS pools, then the lender must make sure that it does not withdraw the guaranty fee remittance when it takes its monthly servicing fee from the account.

For more information about designating bank accounts for drafting purposes and confirming guaranty fee remittances, see the Servicing Guide.

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