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DU 10.3 Update & Appraisal Flexibility

As announced in Fannie Mae Release Notes dated April 6, 2020, during the weekend of April 11, 2020, Fannie Mae implemented the updates below to Desktop Underwriter® (DU®) Version 10.3.

Risk and Eligibility Assessment

Risk and Eligibility Assessment has been updated in response to changing market conditions and to support sustainable homeownership:

  • These changes are intended to help Fannie Mae’s customers better manage credit risk in the current market and provide sustainable options to borrowers.
  • It is expected that these changes will result in a modest reduction in loan casefiles with high-risk factors receiving an Approve/Eligible recommendation.
  • These changes will apply to DU Version 10.3 loan casefiles created on or after April 12, 2020.

Identification of Fannie Owned Loans

DU will issue a new message based on COVID-19 appraisal updates stating that the borrower's existing loan has been identified by DU as a Fannie Mae loan.

  • This message will be issued on limited cash-out refinance loan casefiles when DU finds an active Fannie Mae first mortgage loan for the subject property address, and also confirms that the Social Security number (SSN) of at least one of the borrowers on the loan casefile matches one of the SSNs on the existing loan.
  • These changes will apply to DU Version 10.3 casefiles submitted or resubmitted on or after the weekend of April 11, 2020.

New DU Message – Impact of COVID-19

DU will issue a New Message as a reminder to lenders to refer to all Fannie Mae Lender Letters related to the “Impact of COVID-19” for additional instructions on temporary policies that may apply to the loan casefile.

  • These changes will apply to DU Version 10.3 for loan casefiles submitted and resubmitted on or after the weekend of April 11, 2020. 

Appraisal Flexibility

As a reminder, appraisal flexibility as identified by the Agencies may be used only on Fannie to Fannie or Freddie to Freddie loans. 

Rate and Term Refinances of Fannie Mae loans must be run through DU to be eligible for Fannie Mae appraisal flexibility. To find if Fannie owns the loan, visit

Rate and Term Refinances of Freddie Mac loans must be run through LP to be eligible for Freddie Mac appraisal flexibility.  To find out if Freddie owns the loan, visit

For more information on COVID-19 Temporary Guidance, see Fairway’s guidelines.

Please contact your Regional Account Manager should you have any questions related to this Client Announcement.


Client Announcement 2020-04-13

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