When Your Loan Must Go Back Through the System
Your lender runs your loan through Fannie Mae's Loan Product Advisor system to get approval. Sometimes that approval becomes outdated, and your loan needs to go back through the system before you can close.
This happens in three main situations. First, if any information on your original submission was wrong or incomplete. Second, if your financial picture changes beyond certain small tolerances. Third, if too much time passes between your approval and your closing date.
Say you got approved in January but don't close until June. That's more than 120 days, so your lender must resubmit your loan. The system needs fresh information to confirm you still qualify.
Your credit report also has an expiration date. If your credit report is more than 120 days old by your closing date, resubmission is required even if nothing else changed.
Changes That Don't Require Going Back Through
Fannie Mae allows small changes without requiring resubmission. These tolerances recognize that your financial situation might shift slightly during the loan process.
Income increases never require resubmission for most loan types. If you get a raise or your spouse finds a better job, your lender can proceed to closing without going back to the automated system. The exception is Home Possible loans, where any income increase triggers resubmission.
Your debt-to-income ratio can change within limits. If your income drops or your debts increase, resubmission isn't required as long as two conditions are met. Your total debt-to-income ratio must stay at or below 45%, and the change can't move your ratio by more than 3 percentage points.
Here's how this works in practice. You originally qualified with a 38% debt-to-income ratio. Your income drops slightly, pushing your ratio to 41%. Since you're still under 45% and the change is only 3 percentage points, no resubmission is needed.
Asset changes follow a similar pattern. Increases in your verified assets or reserves never require resubmission. Decreases in reserves are acceptable as long as you still meet the minimum reserve requirements shown on your approval certificate.
Loan Amount Changes on Refinances
Refinance loans have special rules for loan amount changes. Small decreases or increases can proceed without resubmission if they meet specific criteria.
For loan amount decreases, you can reduce your loan by up to 5% without resubmission. This applies whether or not mortgage insurance is required. If mortgage insurance is involved, your lender must obtain a new certificate based on the lower loan amount.
Loan amount increases have tighter limits. You can increase your loan by the smaller of $500 or 1% of the original loan amount. On a $300,000 loan, that means increases up to $3,000 are allowed. On a $400,000 loan, the limit drops to just $500.
There's an important exception for automated collateral evaluation. If your loan qualified for ACE or ACE+ and you accepted that offer, any loan amount change requires resubmission regardless of the amount.
Post-Closing Resubmissions
Sometimes lenders discover after closing that information submitted to Loan Product Advisor was incorrect. Fannie Mae allows post-closing resubmissions in limited circumstances.
Your lender must select "Post Closing Quality Control" when resubmitting after the note date. This signals that the loan has already closed and the resubmission is for quality control purposes.
Several restrictions apply to post-closing resubmissions. The resubmission must occur within 120 days of the original assessment expiration date. You cannot add or remove borrowers, change a borrower's name or Social Security number, or switch credit report companies.
If your loan can't be resubmitted after closing due to these restrictions, it must be manually underwritten and becomes a non-automated loan. This can affect the loan's eligibility for sale to Fannie Mae.
Why These Rules Exist
Fannie Mae's resubmission requirements balance efficiency with accuracy. The automated system works best when it has current, accurate information about your financial situation.
The 120-day time limit reflects how quickly financial circumstances can change. A job loss, new debt, or credit score change in four months could affect your ability to repay the loan. Fresh information ensures the approval remains valid.
The tolerance levels for changes recognize that minor fluctuations are normal during the loan process. Your income might vary slightly between pay periods, or you might pay down a credit card. These small changes don't meaningfully affect your creditworthiness.
The stricter rules for post-closing resubmissions protect both lenders and borrowers. Once a loan closes, major changes to borrower information could indicate fraud or significant errors that require manual review.
Common Situations That Trip Up Borrowers
Several scenarios commonly trigger unexpected resubmissions. Job changes during the loan process often require resubmission, especially if your income, employment type, or employer changes significantly.
Large purchases during the loan process can also cause problems. If you buy a car or furniture and your debt-to-income ratio increases by more than 3 percentage points, resubmission is required. This can delay your closing and potentially change your loan terms.
Credit report timing creates another common issue. If your loan process drags on, your credit report might expire before closing. Your lender will need to pull a new credit report and resubmit your loan, which could reveal new debts or credit score changes.
Home Possible borrowers face stricter rules than conventional loan borrowers. Any income increase requires resubmission for these loans, even though income increases don't require resubmission for other loan types.
Construction and renovation loans have their own special rules under [[Section 4602.2]] that provide additional exceptions to the standard resubmission requirements.
References
For the official guidelines, see 5101.3: Resubmission requirements in the Fannie Mae Selling Guide.
Mortgage guidelines change. Stay current.
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Original Freddie Mac Guideline Text
This section contains the following information:
®
required
Resubmission to Loan Product Advisor not required (resubmission tolerances)
Resubmission to Loan Product Advisor after the Note Date
The Risk Class and Documentation Level on the Last Feedback Certificate must be based on submission of accurate data to Loan Product Advisor. When resubmission to Loan Product Advisor is required, the Risk Class and/or Documentation Level might change.
(a)
Resubmission to Loan Product Advisor required
A Mortgage must be resubmitted to Loan Product Advisor prior to the Delivery Date, except as stated in
Section 5101.3(b)
below and
Chapter 4602
for Construction to Permanent Mortgages and Renovation Mortgages, if any of the following apply:
Information on the previous submission was not true, complete or accurate
Any information submitted to Loan Product Advisor changes except for changes within the acceptable tolerances reflected below in
Section 5101.3(b)
The last submission to Loan Product Advisor was more than 120 days before the Note Date
The date of the Loan Product Advisor credit report(s) exceeds 120 days
If resubmission of a Mortgage to Loan Product Advisor is after the Note Date, refer to the additional requirements in
Section 5101.3(c)
.
(b)
Resubmission to Loan Product Advisor not required (resubmission tolerances)
A change from the previous submission to Loan Product Advisor involving the following does not require resubmission:
(i)
Debts/income
The monthly debt payment (including monthly housing expense (see
)) decreases
The income for any Borrower increases; however, for Home Possible
®
Mortgages when the income used to qualify the Borrower increases, resubmission is required
The income for any Borrower decreases and/or the monthly debt payment (including monthly housing expense) increases when both of the following apply:
The total new debt payment-to-income (DTI) ratio does not exceed 45%
The total difference does not change the total DTI ratio by more than 3 percentage points
(ii)
The amount of verified assets increases
The amount of verified reserves increases
The amount of verified reserves decreases to an amount that is no less than the reserves required to be verified reflected on the Feedback Certificate
(iii)
Loan amount changes on refinance Mortgages
(A)
Loan amount decreases
The loan amount decreases by no more than 5% on a refinance Mortgage and at the time of the most recent Loan Product Advisor submission mortgage insurance is not required on the Mortgage
OR
The loan amount decreases by no more than 5% on a refinance Mortgage, at the time of the most recent Loan Product Advisor submission mortgage insurance on the Mortgage is required, and:
The change does not impact the amount of the mortgage insurance coverage, and
The amount of the mortgage insurance premium collected by the Seller is based on the new loan amount and the Seller obtains a new mortgage insurance certificate
Exception:
When the loan amount decreased and the Mortgage qualified for automated collateral evaluation (ACE) or ACE+ PDR, the Seller must resubmit to Loan Product Advisor if the ACE or ACE+ PDR offer was accepted.
(B)
Loan amount increases
The loan amount increases by no more than $500 or up to 1% of the loan amount, whichever is less, and based on the new loan amount mortgage insurance is not required on the Mortgage
OR
The loan amount increases by no more than $500 or up to 1% of the loan amount, whichever is less, and based on the new loan amount mortgage insurance on the Mortgage is required, and:
The change does not impact the amount of the mortgage insurance coverage, and
The amount of the mortgage insurance premium collected by the Seller is based on the new loan amount and the Seller obtains a new mortgage insurance certificate
Exception:
When the loan amount increased and the Mortgage qualified for ACE or ACE+ PDR, the Seller must resubmit to Loan Product Advisor if the ACE or ACE+ PDR offer was accepted.
(iv)
Interest rate reduction
Freddie Mac does not require resubmission to Loan Product Advisor for Seller-Owned Modified Mortgages that are Home Possible Mortgages modified for the purpose of a reduction in interest rate of the First Lien Mortgage (see
Section 4402.4(c)
).
(v)
Construction to Permanent Mortgages and Renovation Mortgages
Section 4602.2
for additional changes not requiring resubmission to Loan Product Advisor for Construction to Permanent Mortgages and Renovation Mortgages.
(c)
Resubmission to Loan Product Advisor after the Note Date
If the Seller determines after the Note Date that the information entered into Loan Product Advisor was not true, complete and accurate, except as otherwise permitted in
Section 5101.3(b)
above and unless otherwise prohibited below, the Mortgage must be resubmitted to Loan Product Advisor after the Note Date but prior to the Delivery Date.
The Seller must select “Post Closing Quality Control” as the Loan Processing Stage in Loan Product Advisor.
A Mortgage cannot be resubmitted to Loan Product Advisor after the Note Date if any of the following apply:
Resubmission is more than 120 days after the Loan Product Advisor assessment expiration date displayed on the Feedback Certificate in effect as of the Note Date
A Borrower is being added or deleted or a change is being made to a Borrower’s last name or Social Security number
A new credit report company needs to be selected
The single or joint merged credit report indicator changes
The order of Borrowers changes on a joint merged credit request
The merged credit report number does not match the merged credit report number from the most recent complete transaction
If the Mortgage cannot be resubmitted to Loan Product Advisor after the Note Date, the Mortgage must be manually underwritten and is considered a Non-Loan Product Advisor Mortgage.
