Tech Innovators: Fannie Mae program empowers lending confidence

Day 1 Certainty taps tech solutions to transform mortgages


The move toward digitization and a paperless mortgage process to create efficiencies, manage risk, reduce costs and improve the borrower experience has been under way in the mortgage industry for a while.

Fannie Mae’s Day 1 Certainty, introduced at MBA Annual in October, is one of the latest efforts to push the technology envelope while managing risk for lenders, adding certainty to their process, and improving the mortgage experience for all parties.

“We are seeing the mortgage industry move away from paper documentation and embrace automation to provide information more efficiently and cost-effectively,” said Leslie Arrington, vice president, third-party risk management, at Fannie Mae.

One component of Day 1 Certainty is helping lenders validate income, assets, and employment electronically in Fannie Mae’s automated underwriting system, Desktop Underwriter (DU). Validation is performed through designated vendors and provides relief from representations and warranties on validated loan components, addressing risk up front in the lending process. This change allows mortgage originators to lend with confidence.

Day 1 Certainty’s other components include enhanced property inspection waivers (PIWs) on certain refinances with rep-and-warrant relief on property value, condition, and marketability. 

Day 1 Certainty also provides freedom from reps and warrants on property value via Collateral Underwriter (CU) when the CU score on the appraisal is 2.5 or lower. CU is a free appraisal risk assessment application from Fannie Mae.


“Fannie Mae is leveraging all of that great innovative work from mortgage industry vendors to facilitate Day 1 Certainty, granting lenders representations and warranties relief on the front end,” Arrington said.

“Our goal is to continue identifying and on-boarding vendors who provide a service that is valuable to our customers,” she said. “We are interested in increasing the options and have established a structured process to allow vendor participation while managing risk.”

Fannie Mae introduced Day 1 Certainty with FormFree’s AccountChek as the first designated vendor to manage asset verification through DU. Equifax was selected as a designated vendor to provide employment and income verification (through its The Work Number service) and IRS tax transcript fulfillment. The use of electronic validation eliminates the need for borrowers (and lenders) to gather paper documents such as paystubs, W-2s, or bank statements.

Fannie Mae will be vetting additional vendors, Arrington said. It seeks vendors that specialize in electronically validating income, assets, or employment, especially those already serving Fannie Mae’s lender base.  

“We want to expand choice for our lenders and are seeking to add vendors to provide more options,” she said. “Many of our lenders also currently work with vendors that have agreements in place with the vendors integrated into our platform, so lenders can access Day 1 Certainty in this way, which also expands choice for our customers.”


Fannie Mae is working to make the onboarding of new vendors efficient while at the same time doing thorough due diligence on each to make sure the vendors have the right processes in place for risk management.

“We are trying to strike a balance between being efficient in getting as many vendors engaged as appropriate while ensuring they have the right structures and processes in place from a risk management perspective,” Arrington said. 

Fannie Mae has established a process for vendors that want to participate in Day 1 Certainty. Once interest is expressed, Fannie Mae will follow up with more information on the vetting process.

“We put this into place so vendors that are interested in Day 1 Certainty can learn more about the process and how to work with us,” she said.


“To date, the speed, efficiency, and freedom from reps and warrants the program offers have been popular with lenders that are looking for ways to grow their businesses in a competitive and robust housing market,” Arrington said.

“We believe automated verification is an idea whose time has certainly arrived, not just because it promotes efficiency and cost savings, but because it reduces human error in the verification process,” she added. 


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