Fannie Mae Selling Guide A2-3.2-01 — Loan Repurchases and Make Whole Payments Requested Published May 6, 2026 43 by Fannie Mae

Fannie Mae Selling Guide A2-3.2-01 — Loan Repurchases and Make Whole Payments Requested Published May 6, 2026 43 by Fannie Mae

A2-3.2-01, Loan Repurchases and Make Whole Payments Requested Published May 6, 2026 43 by Fannie Mae (08/29/2017) Introduction This topic contains information on loan repurchases and make whole payments requested by Fannie Mae, including: Overview Violation of Contractual Warranty Conditions Requiring Repurchase Lender Response to a Demand Repurchase Resolution Payment of Repurchase Proceeds Redelivery of Repurchased Loans Repurchase Price Overview As part of its quality control (QC) system, Fannie Mae reviews mortgage loans that it has purchased or securitized. Fannie Mae may conduct several different types of reviews, including post-purchase reviews, early payment default reviews, servicing reviews, and post-foreclosure reviews. During the QC reviews, Fannie Mae may identify a “defect”—a loan-level deficiency that breaches a term contained in the Lender Contract in effect at the time of loan delivery. These reviews may result in loan repurchase demands, make whole payment demands, or other alternative remedies. Fannie Mae requires some repurchases because the terms under which the mortgages were purchased or securitized call for a repurchase under certain conditions or circumstances. Repurchases that fall into this category generally include, but are not limited to, Charter violations, an adjustable-rate mortgage in an MBS pool that has converted to a fixed-rate mortgage per the borrower’s exercise of its option in the mortgage documents, or an MBS mortgage that has 24 payments past due. Certain mortgage loans may be eligible for relief from enforcement for breaches of certain representations and warranties once the mortgage loan has satisfied the requirements described in A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility. Eligible mortgage loans include those loans acquired by Fannie Mae on or after January 1, 2013. Violation of Contractual Warranty If Fannie Mae's loan review determines (or Fannie Mae otherwise learns) that a mortgage loan did not meet Fannie Mae requirements due to violation of the Lender Contract or, if the “remedies framework” applies and a “significant defect” is identified, Fannie Mae may require the lender to immediately repurchase the mortgage loan or acquired property (or Fannie Mae's participation interest in the mortgage loan) or to remit a make whole payment if the property has been liquidated. Fannie Mae may also require repurchase or a make whole payment if any warranty the selling lender made is untrue and, if the remedies framework applies, qualifies as a significant defect, whether or not the lender had Published May 6, 2026 44 actual knowledge of the untruth. No such repurchase (or make whole payment) request will be made if the warranty specifically states that a violation does not exist unless the lender had actual knowledge of the untruth and the lender has no such knowledge. A quality control loan file review or payment of loan-level price adjustments in no way limits Fannie Mae’s right to require a repurchase or a make whole payment if a warranty breach is later discovered, unless the mortgage loan has qualified for relief under the enforcement relief framework and the subsequent breach is not a breach of a life-of-loan warranty or any other warranty outside of Subparts B1 to B5 of the Selling Guide. Note: For additional information, including definitions, see D2-1-03, Outcomes of Fannie Mae QC Reviews, and D2-1-04, Identifying and Remedying Origination Defects Under the Remedies Framework. Conditions Requiring Repurchase Fannie Mae has the right to require a lender to repurchase a mortgage loan or an acquired property, or remit a make whole payment, as a result of a breach of the Lender Contract. For loans subject to the remedies framework, if a breach of a selling representation and warranty is identified, such breach must result in a significant defect. In addition to repurchase for breach of warranty, lenders may be required to repurchase some loans because the terms under which the mortgage loans were purchased or securitized call for a repurchase. Unless a loan has qualified for relief from enforcement for breaches of certain selling representations and warranties in accordance with A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility, a decision not to require repurchase at a particular time does not waive Fannie Mae's right to demand repurchase at a later time, or to institute other remedies for breach of the Lender Contract. Fannie Mae may conduct several different types of reviews with respect to a mortgage loan, including a post- purchase review, an early payment default review, a servicing review, or a post-foreclosure review. During the course of a review, Fannie Mae may identify significant underwriting deficiencies, significant defects, a breach of a selling representation or warranty, or a breach of the terms of any applicable contract provision. If any of the foregoing are identified, Fannie Mae may require the immediate repurchase of a mortgage loan or an acquired property or the remittance of a make whole payment (all of which fall under the definition of a “demand”) unless and until such mortgage loan is eligible for relief from enforcement for breaches of certain underwriting and eligibility representations and warranties in accordance with A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility. In some instances, Fannie Mae may enter into other repurchase alternatives. See A2-3.2-03, Remedies Framework, and the Servicing Guide. In some instances in which the lender has breached its representations or warranties, Fannie Mae may allow the lender to correct the warranty violation. During the appeal and impasse processes, the lender has the right to correct a significant defect for mortgage loans subject to the remedies framework in the time frame and manner required by the Lender Contract. If no time frame or manner for correction is identified in the Lender Contract, Published May 6, 2026 45 the correction of the significant defect shall be as determined by Fannie Mae. See Subpart D2, Fannie Mae QC Process, for additional information about the quality control selection and review process and timelines related to the remedies framework. Lender Response to a Demand When Fannie Mae requires a repurchase or a make whole payment because of a breach, the lender should work with the Fannie Mae individual or department noted on the demand to resolve any issues. Fannie Mae has an established appeal, impasse, management escalation, and Independent Dispute Resolution process (see A2-3.2-03, Remedies Framework). Despite the best efforts of both parties, Fannie Mae and the lender may not always be able to reach a mutual agreement. In such cases, the lender must repurchase the mortgage loan, the acquired property, or Fannie Mae’s participation interest in the mortgage loan or the acquired property or exercise its rights under the appeal, impasse, and management escalation process, or the Independent Dispute Resolution process. Repurchase Resolution When Fannie Mae identifies a defective mortgage, it may, in its sole discretion, impose a condition to retaining the loan, such as requiring the lender to agree to an alternative remedy to repurchase. In some cases, as permitted in the Lender Contract, Fannie Mae will issue a repurchase or make whole payment demand to the lender. The selling defects that give rise to a repurchase or make whole payment demand for loans covered by the remedies framework consist of errors or failures that Fannie Mae identifies as significant defects, as described in D2-1-03, Outcomes of Fannie Mae QC Reviews. This Guide contains timelines by which lenders must pay Fannie Mae the funds that are due in connection with a repurchase or make whole payment demand or other alternative remedy. If a lender delays in this or has a pattern of unresponsiveness, Fannie Mae may consider this a breach of contract and consider other actions against the lender, up to and including termination. For performing mortgage loans with significant defects covered by the remedies framework, Fannie Mae may elect not to require immediate repurchase, but may instead offer a repurchase alternative. The nature and severity of the findings, financial and operational strength of the lender, the quality of the mortgages sold, servicing performance, the acceptability of the investment, and the loan payment history are some of the criteria that may be used by Fannie Mae in deciding whether to use this option. Fannie Mae may consider a lender’s counterparty status in determining whether a loan is retainable and to the extent that there are future obligations required as part of the repurchase alternative. Payment of Repurchase Proceeds For mortgage loans acquired by Fannie Mae prior to January 1, 2013, the lender must pay Fannie Mae the funds that are due in connection with a repurchase or make whole payment demand within 30 days (or with its next scheduled remittance following the completion of the 30–day period). For mortgage loans with acquisition dates on or after January 1, 2013, the lender must pay Fannie Mae the funds that are due in connection with a demand for repurchase, indemnification, or make whole payment within Published May 6, 2026 46 60 days after receipt of the demand or within such other time frame as specified by Fannie Mae unless an appeal is made. (For repurchase demands made on a loan that has not been foreclosed upon or liquidated, the payment of the repurchase price may be made by the lender (or servicer) with its next scheduled remittance following the completion of the 60–day period.) If a lender delays in this, or has a pattern of unresponsiveness, Fannie Mae may consider this a breach of contract and consider other actions against the lender, up to and including termination. Should Fannie Mae have to take legal action to enforce its right to require repurchase of a mortgage (or property), the lender will also be liable for Fannie Mae’s attorney’s fees, costs, and related expenses, as well as for any applicable consequential damages. Note: Lender or servicer responsibilities described herein may actually be those of the “responsible party,” as applicable. Redelivery of Repurchased Loans If a mortgage loan was repurchased by a lender, and the repurchased loan is subsequently made compliant with Fannie Mae's current standards, the loan may be redelivered to Fannie Mae, at its sole and absolute discretion, on a negotiated basis. The lender represents and warrants that the mortgage being delivered is not a mortgage that was required to be repurchased by a secondary market investor, government-sponsored enterprise, or private institutional investor other than Fannie Mae for any documentation, underwriting, property valuation, deficiencies and/or issues with the property (including project eligibility if the property is in a condo, co-op, or PUD project), borrower credit, or other deficiencies or for any other reason. These types of mortgages are not eligible for delivery even if the identified defect has been corrected by the lender. Note: A mortgage loan that a lender repurchased from another investor or GSE that was delivered in error to that investor or GSE is eligible for delivery to Fannie Mae as long as it meets all requirements of the Selling Guide. In the event that a mortgage loan is deemed ineligible for redelivery to Fannie Mae or rejected by Fannie Mae upon redelivery, any future losses incurred after repurchase are the responsibility of the lender and not Fannie Mae. Repurchase Price Whenever Fannie Mae requires repurchase of a mortgage loan without redelivery to Fannie Mae’s portfolio and, at the time of the repurchase, title to the security property has passed to Fannie Mae (or is held for Fannie Mae, but in the name of the servicer pursuant to its duties as Fannie Mae's servicer), Fannie Mae will require repurchase of Fannie Mae’s interest in the property, or for the lender to remit a make whole payment if the property has been liquidated. The repurchase price for a mortgage loan and the purchase price for an acquired property will be the same as if the lender were repurchasing the mortgage loan with accrued interest and other adjustments, including Fannie Mae’s property-related expenses such as maintenance and marketing expenses, through the date of repurchase. Loan-level price adjustments (LLPAs) will not be included in the repurchase price or make whole payment calculation; however, lenders may be eligible for a partial LLPA refund on certain loans that have been Published May 6, 2026 47 repurchased. See C1-1-01, Execution Options, for additional information. The purchase price is not based on the market value of the property at the time of the purchase but on all amounts due Fannie Mae on the subject mortgage loan and property. When the servicer purchases the property or remits a make whole payment, Fannie Mae also will convey all rights as owner of the loan (e.g., deficiency rights), if any, that Fannie Mae may still have pursuant to applicable state law, but Fannie Mae has no obligation to the servicer or responsible party to have preserved such rights. If the property has been liquidated, Fannie Mae will issue a demand for a make whole payment to compensate it for the losses it suffered in purchasing a defective mortgage. Recent Related Announcements There are no recently issued Announcements related to this topic. A2-3.2-02, Enforcement Relief for Breaches of Certain Representations and Warranties Related to Underwriting and Eligibility (08/06/2025) Introduction This topic describes the framework that provides lenders with relief from Fannie Mae's enforcement for breaches of certain underwriting and eligibility representations and warranties for loans that meet specific payment history or other eligibility requirements. This topic contains information on the following subjects: Overview of the Enforcement Relief Framework Scope of Enforcement Relief of Underwriting and Eligibility Representations and Warranties Loans Eligible for Enforcement Relief Additional Eligibility Criteria for Enforcement Relief Notification of Relief Life-of-Loan Representation and Warranty Exclusions Overview of the Enforcement Relief Framework Representations and warranties required by Fannie Mae are described in the Mortgage Selling and Servicing Contract, the Selling and Servicing Guides, and other Lender Contracts. Violation of any representation and warranty is a breach of the Lender Contract, entitling Fannie Mae to pursue certain remedies, including a loan repurchase or make whole payment demand as more fully described in A2-3.2-01, Loan Repurchases and Make Whole Payments Requested by Fannie Mae. For conventional loans that are acquired by Fannie Mae on a flow basis, the lender will be relieved of its obligation to remedy breaches of certain underwriting and eligibility representations and warranties if the loan meets certain eligibility criteria described under Loans Eligible for Enforcement Relief below. This framework does not change the underlying representations and warranties the lender makes to Fannie Mae when selling loans; it changes whether and how Fannie Mae will enforce breaches Published May 6, 2026 48 of those representations after a loan has achieved relief under the framework. No relief will be available for breaches of certain “life-of-loan” representations and warranties as described in Life-of-Loan Representation and Warranty Exclusions below, regardless of whether a loan otherwise qualifies for relief. The availability of the enforcement relief framework does not discharge lenders from the responsibility for underwriting and delivering quality loans in accordance with Fannie Mae's requirements. Note: Certain components of the loan may qualify for individual enforcement relief outside of this framework. For example, a loan may qualify for enforcement relief on the borrower’s income at the time the loan is sold to Fannie Mae, and later obtain enforcement relief based on payment history. Life-of-loan exclusions will apply at all times. See A2-2-04, Limited Waiver and Enforcement Relief of Representations and Warranties, for additional information. Scope of Enforcement Relief of Underwriting and Eligibility Representations and Warranties With respect to an eligible loan (as defined below), a lender will be relieved of the requirement to remedy a loan (such as repurchase, a make whole payment, or other repurchase alternative as more fully described in A2-3.2-03, Remedies Framework) if that loan violates Fannie Mae's single-family underwriting and eligibility requirements described in the applicable parts of the Selling Guide and other Lender Contracts relating to: underwriting the borrower, which includes the lender's assessment of the borrower's loan terms, credit history, employment and income, assets, and other financial information used for qualifying the borrower for the loan; underwriting the subject property, which includes the lender's analysis of the description and valuation of the property to determine its adequacy as collateral for the mortgage transaction; and underwriting the project in which the property is located, which includes the lender's analysis of the condo, co-op, or PUD project in accordance with Fannie Mae's requirements. The following subparts of the Selling Guide are covered by the relief: Subpart B1, Loan Application Package; Subpart B2, Eligibility; Subpart B3, Underwriting Borrowers; Subpart B4, Underwriting Property; and Subpart B5, Unique Eligibility and Underwriting Considerations. Note: If a loan with a breach or alleged breach has achieved enforcement relief as provided in this topic, then the obligation to indemnify Fannie Mae is limited in certain respects. See A2-1-03, Indemnification for Losses, for a description of the continuing indemnification obligations. Loans Eligible for Enforcement Relief To be eligible for the representation and warranty enforcement relief, a loan must meet the acquisition date, payment history, Fannie Mae quality control (QC) review requirements, and additional eligibility requirements, each as described below. Published May 6, 2026 49 Loans must have been acquired by Fannie Mae as either: whole loans purchased on or after July 1, 2014; or mortgage loans delivered into MBS with pool issue dates on or after July 1, 2014. Payment History Requirements For all loans other than Fannie Mae high LTV refinance loans: To be eligible for relief under the framework, if the relief is based on the borrower’s acceptable payment history, the relief will occur upon payment by the borrower of the first 36 monthly payments due following the loan acquisition date, provided that the borrower had no more than two 30-day delinquencies, had no 60-day or greater delinquencies, and is not 30 or more days delinquent with respect to the 36th monthly payment. For Fannie Mae high LTV refinance loans: Relief is based on the earlier of payment by the borrower of the first 12 monthly payments due following the loan acquisition date, provided the borrower had no 30–day or greater delinquencies; or payment by the borrower of the first 36 monthly payments due following the loan acquisition date, provided the borrower had no more than two 30-day delinquencies, had no 60-day or greater delinquencies, and is not 30 or more days delinquent with respect to the 36th monthly payment. Fannie Mae Full-File QC Review Under the framework, there is an alternative path through which loans may qualify for relief of the selling representations and warranties based on the satisfactory conclusion of a full-file QC review. This enforcement relief will occur when one of the following takes place: Fannie Mae completes a full-file QC review of the loan file, which includes a review of the credit underwriting and eligibility of the borrower, the property (including its value), and the project in which the property is located, if applicable, and determines that the loan is acceptable (that is, it is not subject to a repurchase demand). Fannie Mae completes the full-file QC review of the loan file and determines the loan is not acceptable because of a selling deficiency that the Selling or Servicing Guide specifically identifies may be corrected. If the lender corrects such deficiency in the time frame and manner specified in the Lender Contract, relief will be effective upon the satisfactory correction of the deficiency as determined by Fannie Mae through a reassessment of the loan. For example, if the loan file delivered to Fannie Mae did not contain the required verification of income, the defect would be deemed to be corrected if the lender provided the missing documentation requested by Fannie Mae within the time frame specified. Another example of an action taken to correct a deficiency is rectifying a prior mortgage lien by producing evidence of a recorded satisfaction or release of such prior mortgage lien within the time frame specified. Fannie Mae completes the full-file QC review of the loan file and determines the loan is not acceptable but may be eligible for a repurchase alternative which expires or terminates by its terms. In this case, relief will be effective upon the satisfactory expiration or termination of the alternative to repurchase. For example, if Fannie Mae determined a loan was not acceptable and, as an alternative to repurchase, Fannie Mae and the lender agreed that the loan would be subject to credit Published May 6, 2026 50 enhancement for 5 years, the loan would be relieved of the selling representations and warranties at the end of the 5-year period. Other possible alternatives to repurchase include recourse, make- whole arrangements, and certain split loss agreements; in each case, the repurchase alternative must satisfactorily expire or terminate by its terms in order for the affected loan to be eligible for relief from the selling representations and warranties under the framework. Note: The requirements for obtaining relief based on a full-file QC review apply both to performing loans and non-performing loans. As a result, lenders may obtain relief through the QC path regardless of whether the loan had an acceptable payment history. Post-Relief Loan File and Appraisal Reviews. Fannie Mae may perform loan file reviews for quality assurance and audit purposes both before and after a loan obtains enforcement relief under the framework. However, Fannie Mae cannot issue a repurchase demand or seek an alternative remedy with respect to a deficiency in the underwriting of the borrower, the property, or the project that is relieved under the framework (such as a deficiency related to the LTV ratio or debt-to-income ratio) when that deficiency is discovered after the loan has obtained enforcement relief unless the deficiency qualifies as breach of a “life-of-loan” representation and warranty. A repurchase demand or alternative remedy may be issued only when the deficiency involves one of the life-of-loan exclusions or another provision of the Selling Guide that is not relieved under the framework. Note: If, after a loan has obtained relief under the framework, Fannie Mae reviews an appraisal and determines that the property value used to calculate the LTV ratio was incorrect at the time of delivery, Fannie Mae will not issue a repurchase demand based solely on the fact that the newly calculated LTV ratio is over 80% and the loan did not have credit enhancement in place when it was delivered to Fannie Mae. Additional Eligibility Criteria for Enforcement Relief In addition to the acquisition date, payment history, or QC requirements described above, the following criteria must also be met for loans to qualify for relief: The loan must be a conventional loan sold to Fannie Mae on a flow basis. Government-guaranteed or -insured loans are not eligible for enforcement relief. Non-flow seasoned or loans sold in bulk may be eligible for enforcement relief only on a negotiated basis. (Seasoned loans that are sold to Fannie Mae on a flow basis in accordance with the Selling Guide are eligible for enforcement relief.) The determination of whether the loan has an acceptable payment history begins on the date of the first monthly mortgage payment due after the Fannie Mae acquisition date. With the exception of loans with temporary buydowns, neither the lender nor a third party with a financial interest in the performance of the loan (such as a mortgage broker, correspondent lender, or mortgage insurer) can escrow or advance funds on behalf of the borrower to be used for payment of any principal or interest payable under the terms of the loan for the purpose of satisfying the payment history requirement. The loan cannot have been sold to Fannie Mae with any credit enhancement other than traditional primary mortgage insurance (i.e., lender- or borrower-paid mortgage insurance). Loans with credit enhancement other than traditional primary mortgage insurance may be eligible for enforcement relief only on a negotiated basis. Published May 6, 2026 51 Loans not impacted by a disaster that become subject to a forbearance agreement are eligible for relief based on the borrower’s payment history; or, on the basis of a QC review of the loan file if the loan meets all other requirements. Loans that become subject to a repayment plan, or are otherwise modified from the original terms after acquisition by Fannie Mae are not eligible for relief based on the borrower’s payment history, but may be eligible on the basis of a QC review of the loan file if the loan otherwise meets all other requirements. Loans that become subject to a disaster-related forbearance agreement and any subsequent repayment plan or modification, are eligible for relief based on the borrower’s payment history or on the basis of a QC review of the loan file if the loan otherwise meets all other requirements. See the disaster-related forbearance criteria below for additional requirements. With the exception of certain loans purchased under the terms of a long-term standby purchase commitment (LTSC), the loans cannot have had any delinquencies between the origination date and the Fannie Mae acquisition date. For loans classified as “Class 1 Mortgage Loans” or “Class 4 Mortgage Loans” that are purchased under an LTSC, the payment history requirement will be measured from the date the loan was committed under the LTSC structure (the 12–, 36–, or 60–month time frame will begin on the date the loan was committed into the LTSC). The loan must not be subject to an outstanding request for repurchase, repurchase alternative, or make whole payment. (See A2-3.2-03, Remedies Framework, for additional information.) Note: Unless otherwise agreed to by Fannie Mae and the lender, once a loan has qualified for the representation and warranty enforcement relief by compliance with the requirements above, eligibility for the enforcement relief is final and irrevocable subject to the life-of-loan representation and warranty exclusions. Additional Eligibility Criteria for Loans Subject to Disaster-Related Forbearance To be eligible for relief, the following applies: The loan is impacted by a disaster occurring on or after August 25, 2017. The property or borrower’s place of employment is located in any county, city, or parish that is a designated FEMA-Declared Disaster Area eligible for Individual Assistance as result of a natural disaster. The loan will be eligible for relief based on payment history on the later of the applicable payment history period end date as required under the framework; or the date the loan transitions out of disaster-related forbearance and is brought current via a reinstatement, repayment plan, or permanent modification. The loan must be brought current through a lump sum payment, payment deferral or a repayment plan completed as agreed. If the forbearance plan transitioned to a permanent modification, the borrower must have completed the trial period plan and executed a permanent modification agreement for any of the modification options available through the Fannie Mae Servicing Guide. The period of time the loan is in forbearance “counts” toward the payment history requirement and the months in forbearance are not considered delinquent within the relief framework. For example, if the forbearance occurred during months 30-32, the loan may still be eligible for enforcement relief on or after the 36 th month of payment history as long as all other payments outside the forbearance met the requirements. Notification of Relief Fannie Mae will provide lenders with reports listing those loans that met the eligibility requirements for relief. Published May 6, 2026 52 Life-of-Loan Representation and Warranty Exclusions A lender is not relieved from the enforcement of breaches of its representations and warranties on any loan, including eligible loans, with respect to the following matters even if those matters are addressed in Subparts B1 through B5 of the Selling Guide. With respect to each loan, a lender remains responsible for the life-of-loan representations and warranties related to the following, as more fully described in A2-2-07, Life-of-Loan Representations and Warranties : Fannie Mae Charter Act Matters; Misstatements, Misrepresentations, and Omissions; Data Inaccuracies; Clear Title/First-Lien Enforceability; Compliance with Laws and Responsible Lending Practices; and Acceptable Mortgage Products. Recent Related Announcements The table below provides references to recently issued Announcements that are related to this topic. Announcements Issue Date Announcement SEL-2025-06 August 06, 2025 Announcement SEL-2021-07 August 04, 2021 Announcement SEL-2020-04 August 05, 2020 Announcement SEL-2019-07 August 07, 2019

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