Credit Risk Management

By investing in credit risk transfer, you are investing in Fannie Mae as a credit risk manager – the largest in the mortgage industry.

Credit risk management is a cornerstone of our Single-Family business. As one of the largest guarantors of U.S. mortgages, we play a major role in setting standards for the housing finance market.

We actively manage credit risk throughout the loan lifecycle, from underwriting to disposition.

Lender quality
Lenders undergo a rigorous approval process prior to doing business with Fannie Mae and must meet ongoing net worth and operational requirements. Lenders are subject to ongoing oversight through comprehensive reviews to assess the effectiveness of their quality control procedures.

Loan quality
Loans must be underwritten in accordance with Fannie Mae guidelines. The majority of loans that we acquire are evaluated through Desktop Underwriter® (DU®), the industry's most widely used automated underwriting system. All of Fannie Mae’s single-family and condominium appraisals are assessed through Collateral Underwriter® (CU®), our proprietary appraisal risk assessment tool.

Servicing quality
Fannie Mae sets loan servicing standards, acts as Master Servicer, and provides oversight of loan servicers. We set standards for loss mitigation and borrower workout options. Our proprietary servicing tool, Servicing Management Default Underwriter™ (SMDU™), automates our servicing policies.

Property management
We conduct all property management and disposition in-house, managing one of the industry's largest real estate-owned portfolios. Our strategy is to sell non-distressed homes to owner-occupants, helping to maximize sales proceeds, stabilize neighborhoods, and preserve the value of our guaranty book.

Industry-leading processes

Learn more about how we manage credit risk.

sf credit risk mgt strategy


Cutting-edge tools

Watch the videos below to learn how our innovative tools help mitigate losses throughout the loan lifecycle.

Desktop Underwriter®

DU® automates Fannie Mae's credit policy to help improve the overall loan manufacturing process.

Servicing Management Default Underwriter

Automates the underwriting of loss mitigation decisions, driving consistency across servicers and improved outcomes for borrowers.

Collateral Underwriter®

Our proprietary appraisal risk assessment tool helps provide greater certainty on property values.

Property Valuation and Analytics

Comprehensive hands-on property management process focuses on minimizing loss severities.

Gain confidence in our approach

Data Dynamics® is our free data analytics web tool, designed to allow users to interact with and analyze the historical loan performance data, deal issuance data, and ongoing disclosure data that Fannie Mae makes available.

Data Dynamics Screenshot

In addition to our own internal quality control reviews, Fannie Mae engages third-party due diligence providers to conduct additional reviews for a portion of the loans that we acquire. Learn more about third-party due diligence below.

Third-party due diligence