markus41 AUS Integration Workflow Design
Design the integration workflow between a mortgage LOS and Automated Underwriting Systems (AUS): Fannie Mae Desktop Underwriter (DU), Freddie Mac Loan Product Advisor (LP), and USDA Guaranteed Underwriting System (GUS). Covers submission setup, findings interpretation, documentation requirements, and resubmission workflows.
AUS System Overview
| AUS | Owner | Programs | Access Method |
|---|---|---|---|
| Desktop Underwriter (DU) | Fannie Mae | Conventional Fannie, FHA, VA (via integration), USDA (via integration) | Fannie Mae Connect API + Selling & Servicing Guide |
| Loan Product Advisor (LP) | Freddie Mac | Conventional Freddie, FHA (via integration) | Freddie Mac API + Selling & Servicing Guide |
| GUS | USDA Rural Development | USDA Section 502 Guaranteed Rural Housing | GUS portal (direct entry or LOS integration) |
Section 1: Connection Setup
DU connection configuration:
| Configuration Item | Required Value |
|---|---|
| Fannie Mae Seller/Servicer ID | [Client's Seller/Servicer number] |
| DU API credentials | Obtained through Fannie Mae Connect; stored securely in LOS credential vault |
| Submission format | MISMO 3.4 XML (current standard) |
| Response format | DU findings XML + PDF findings report |
| Environment | Production (separate from test/sandbox) |
| Network access | Fannie Mae whitelists IP addresses — provide production IPs to Fannie Mae |
LP connection configuration:
| Configuration Item | Required Value |
|---|---|
| Freddie Mac Seller/Servicer ID | [Client's Seller/Servicer number] |
| LP API credentials | Obtained through Freddie Mac Loan Advisor Suite portal |
| Submission format | MISMO XML or ULDD format |
| Response format | LP feedback certificate XML + PDF |
| Environment | Production |
GUS connection configuration:
| Configuration Item | Description |
|---|---|
| USDA GUS access | GUS web portal or LOS-GUS integration (not all LOS have native GUS API) |
| USDA Business Partner ID | Client's USDA lender ID |
| If LOS integration not available | Manual GUS submission with copy of findings stored in LOS document management |
Credential management:
- AUS credentials stored in LOS encrypted credential vault (never in plain text config files)
- Credentials rotated per AUS provider policy (typically annually)
- Separate sandbox/test credentials for pre-production testing
- Service account credentials (not tied to individual employee)
Section 2: Submission Workflow
When to submit to AUS:
| Event | Action |
|---|---|
| Borrower has expressed intent to proceed and application is complete | Initial AUS submission |
| Any of the following data changes | Resubmission required (see Section 4) |
| Final submission before underwriting | Submit current AUS run; findings in file |
Loan setup before AUS submission:
- Confirm loan program (Conventional Fannie / Conventional Freddie / FHA / VA / USDA / other)
- Map program to AUS: Conventional → DU or LP (client's choice or program eligibility); FHA → DU or LP (FHA accepts both); USDA → GUS; VA → DU (VA-approved lender with DU access)
- Confirm all 1003 data is complete in LOS — AUS submission pulls from 1003 data
- If both DU and LP are being run: submit to both; use more favorable findings
LOS-to-AUS data mapping:
The LOS MISMO XML export must correctly map 1003 data to AUS fields. Critical mappings to validate:
| 1003 Field | AUS Field | Common Mapping Error |
|---|---|---|
| Borrower SSN | BorrowerSSN | Dashes stripped correctly |
| Property address (all components) | PropertyStreetAddress, City, State, ZIP | ZIP+4 if required |
| Loan amount | BaseLoanAmount | Must match LE; not purchase price |
| Property value / sales price | PropertyEstimatedValue (lower of appraised or sales) | Using purchase price before appraisal |
| Monthly income — all types | MonthlyIncome by income type | Bonus/overtime — 24-month average required |
| Monthly obligations | MonthlyLiability — each installment/revolving debt | Missing liabilities from credit report |
| Housing expense | HousingExpense (PI + taxes + insurance + HOA) | Escrow estimate must be included |
| Loan purpose | LoanPurposetype | Cash-out vs. rate-term distinction |
| Occupancy | PropertyUsageType | Investment property inputs differently |
Section 3: Findings Interpretation
3a: DU Findings
DU recommendation types:
| DU Recommendation | Meaning | Workflow |
|---|---|---|
| Approve/Eligible | Loan meets Fannie Mae guidelines; DU has determined it is eligible for delivery | Proceed to processing using DU findings documentation requirements |
| Approve/Ineligible | DU approves the risk but loan is ineligible for delivery to Fannie for some reason (e.g., loan limit exceeded, property type) | Cannot deliver to Fannie; explore other options (Freddie, portfolio) |
| Refer | DU cannot approve; manual underwriting may be performed per Fannie guidelines | Manual UW required; more conservative documentation standards |
| Refer with Caution | DU has identified elevated risk factors; manual UW very unlikely to approve | Explore alternative programs or restructure |
| Out of Scope | Loan type not supported by DU (e.g., construction, reverse, HELOC) | Use appropriate AUS for loan type |
DU Approve/Eligible documentation requirements (Documentation Type matrix):
| Asset/Liability | DU Documentation Level | What to Collect |
|---|---|---|
| Salaried income (stable employment 2 years) | Full documentation | 30-day pay stubs + W-2s (2 years) |
| W-2 only | W-2 waiver (DU may waive returns for W-2 employees) | Verify DU findings message for waiver |
| Self-employed | Full documentation — always | 2 years tax returns (personal + business) + YTD P&L |
| Bank accounts | Standard (2 months statements) | Most loans: 2 months most recent statements |
| Retirement accounts | If needed for reserves | 2 months or quarterly statement |
| Gift funds | Gift letter + donor bank statement | DU findings will specify if gift is acceptable |
Reading DU findings for required verifications:
The DU findings report lists specific verifications required. These override general Selling Guide requirements. Process:
- Print or save DU findings report to loan file immediately upon receipt
- Processor creates conditions checklist based on DU-listed verifications (not generic checklist)
- If DU says "No income documentation required" — document this finding; do not require documentation anyway
- If DU requires a verification not expected — research Selling Guide for explanation; do not override DU
3b: LP Findings
LP feedback certificate types:
| LP Recommendation | Meaning | Workflow |
|---|---|---|
| Accept | LP recommends the loan for purchase; reduced documentation applies | Use LP-specified documentation requirements |
| Caution | LP is unable to recommend; elevated risk; manual UW may be considered | LP Seller/Servicer Guide manual UW criteria apply |
LP Accept documentation requirements:
Similar to DU but with Freddie Mac-specific variations. Key differences from DU:
- LP uses the term "feedback certificate" for findings
- LP "ACE" (Automated Collateral Evaluation): if LP issues ACE, appraisal may be waived — verify in feedback certificate before ordering appraisal
- LP "LPA" verification messages differ in wording from DU — use Freddie Seller/Servicer Guide as reference
- For FHA loans run through LP: LP findings are for risk only; FHA program guidelines still apply for eligibility
LP Accept — property eligibility notes:
LP feedback certificate identifies property eligibility (e.g., condo project approval status, manufactured housing eligibility). If LP flags a property eligibility condition, resolve before submission to UW.
3c: GUS Findings (USDA)
GUS recommendation types:
| GUS Recommendation | Meaning | Workflow |
|---|---|---|
| Accept | USDA accepts the loan; proceed with standard USDA documentation | Standard USDA processing |
| Refer | Manual underwriting by USDA-approved lender required | Follow USDA HB-1-3555 manual UW guidelines |
| Refer with Caution | Significant risk factors; manual UW unlikely to succeed | Discuss with USDA underwriter; restructure or explore other programs |
USDA-specific eligibility requirements (GUS will flag these):
- Property is in an eligible rural area (USDA Rural Development map — verify address before application)
- Borrower income does not exceed USDA income limits for the area (adjusted for household size and county)
- Guarantee fee calculated correctly (upfront guarantee fee: 1% of loan amount; annual fee: 0.35% of remaining principal)
- Conditional commitment from USDA obtained before closing
GUS conditional commitment workflow:
- GUS Accept received
- Loan packaged per USDA requirements and submitted to USDA Rural Development (state office or national processing center, depending on state)
- USDA issues Conditional Commitment (Form RD 1980-18)
- Conditional commitment received and stored in file
- Any conditions on commitment cleared before closing
- Final loan closing package submitted to USDA post-closing for issuance of Form 1980-17 (Loan Note Guarantee)
Section 4: Resubmission Triggers
Any of the following changes requires AUS resubmission before final underwriting approval:
| Change | Resubmission Required |
|---|---|
| Loan amount change | Yes |
| Property address change | Yes |
| Borrower added or removed | Yes |
| Income change (new employer, loss of employment, change in income amount) | Yes |
| New liability added or removed | Yes |
| Credit score change (new credit report pulled) | Yes — if new score materially different |
| Occupancy change | Yes |
| Property type change | Yes |
| Loan program change | Yes — new AUS appropriate for new program |
| Rate lock (if rate affects fees run through AUS) | May require resubmission if DTI changes |
| 120 days elapsed since prior AUS run | Resubmission strongly recommended; some investors require it |
Resubmission workflow:
- Update LOS with corrected data
- Run new AUS submission
- Store new findings in loan file; note date and reason for resubmission
- If DU recommendation improved: use new findings as basis for documentation
- If DU recommendation worsened: discuss with UW before proceeding; may need to restructure or switch programs
Output Format
Deliver two artifacts:
AUS Submission Workflow — Step-by-step process for initial submission, findings interpretation decision tree, and resubmission workflow for DU, LP, and GUS
Findings Interpretation Guide — Reference document for processors and underwriters covering all recommendation types, documentation requirements by DU/LP recommendation, GUS-specific eligibility requirements, and common AUS error resolutions