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APPROVE ELIGIBLE PER DU FINDINGS
WHAT DOES APPROVE ELIGIBLE PER DU FINDINGS MEANS?
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Approve/Eligible” means that Fannie Mae’s DU (Desktop Underwriter) has found that the loan application is eligible for the program applied for. An approve/eligible per automated underwriting system findings shows that the borrower’s credit profile, income, and assets fit with what is acceptable under automated approval guidelines. So, standard documentation should suffice to move forward. Generally, an “approve eligible” finding is regarded as positive. An approve/eligible per AUS FINDINGS is viewed favorable because it suggests that if everything checks out okay during verification. This type of mortgage will usually be approved. Basically, “Approve Eligible per DU Findings” relates to conventional mortgages. Conventional loans, often called conforming loans, are home loan products often obtained by people who need to borrow large sums over long periods at fixed rates. The mortgage loan is secured against their property, such as houses or apartments; let us now examine these words separately.
DU (Desktop Underwriter):
- Fannie Mae’s automatic underwriting system was created to simplify and streamline mortgage lending processes.
- Lenders can use this software when they want quick results without much human input.
“Approve Eligible”: These words from the system meet Fannie Mae’s requirements.
Definition: It has passed initial underwriting based on certain criteria specified under different sections within Fannie Mae’s guidelines.
Implication:
- Normally, this indicates a strong possibility for approval.
- This may lead to faster processing times because some steps may not have to be performed manually.
Not final decision:
- Though favorable, it is still subject to further review and verification by the lender.
- Requires confirmation through documentation provided for every aspect stated therein.
Next step:
Upon receipt of these findings, lenders should carefully study all conditions indicated thereunder and seek clarification where necessary prior to seeking additional documents from the borrower.
Advantage:
It saves time taken during the manual evaluation process, especially compared with other types of loans whose assessments require more paperwork.
Conditions:
Various requirements stated under each sub-section must be met before final approval can be granted, but some examples include:
Lender’s prerogative:
Even if recommended as “approve eligible,” lenders can still decline applications based on their overlays, which are additional criteria they set over and above those provided by Fannie Mae.
Comparison with FHA:
There are similarities between this term and one called “Accept” under FHA’s TOTAL Scorecard system.
How long is it valid?:
These findings usually remain valid within a given period, like 120 days. Hence, applicants may need to rerun their application through the same system after expiry.
What does “Approve Eligible per DU Findings” mean in mortgage language?
This implies that your initial level of automated underwriting has been passed according to Fannie Mae’s guidelines. AUS approval signifies a positive indication of loan approval. Still, some requirements need to be fulfilled before the final decision is made by a lender who may also have extra conditions apart from those set forth by FNMA. Therefore, this step provides an industry-standard evaluation of creditworthiness for borrowers seeking conventional loans where financial institutions try to identify whether or not they should buy these mortgages.