What Happened?
In a little-noticed, but important development, on April 8, 2026, Fannie Mae issued a governance framework for Fannie Mae Seller/Servicers’ use of artificial intelligence (AI) and/or machine learning (ML) in their origination and/or servicing practices. The requirements that Fannie Mae sets forth in this directive are considerable and apply to all approved single-family seller/servicers utilizing AI/ ML technologies within their loan origination or servicing practices. The directive becomes effective on August 6, 2026, 120 days after publication.
Why Does It Matter?
Fannie Mae observes that while AI/ML is fundamentally altering the mortgage landscape by improving efficiency, strengthening risk management, and delivering more personalized customer experiences, it warns that “as AI/ML models grow more complex and more deeply embedded in critical processes, seller/servicers must ensure these technologies are deployed safely, legally, ethically, and in alignment with Fannie Mae’s expectations.”
Toward that end, Fannie Mae directs all seller/servicers who use AI/ML in connection with the origination of loans sold to or guaranteed by Fannie Mae or serviced on behalf of Fannie to comply with applicable law and to:
- Promulgate written policies governing the development, implementation, and lifecycle of AI/ML systems.
- Review and update these policies at least annually by designated owners to align with industry best practices and legal updates.
- Ensure that system structures incorporate characteristics of trustworthy, unbiased, and ethical AI/ML.
- Subject third-party, outsourced, or subcontractor-provided AI tools to the same rigorous compliance standards as internal software.
- Disclose the types of AI deployed, its intended purpose, and active risk safeguards upon request by Fannie Mae.
What to Do Now
AI/ML is already rapidly changing the mortgage market in unimaginable ways. The Fannie Mae directive augments similar developments across the mortgage industry to supervise automated systems. Notably, on December 3, 2025, Freddie Mac issued Guide Bulletin 2025 16 which promulgated a highly prescriptive set of requirements imposing detailed governance, audit and security requirements for seller/servicers using AI and ML systems. The Freddie Mac Bulletin’s effective date was March 3, 2026.
With Fannie Mae and Freddie Mac being a bellwether for the mortgage industry, mortgage originators and servicers should heed these directives, among others issued by governmental authorities.