T4 FANNIE_MAE High Confidence Guidance

Lender Letter LL-2025-03 Impact of Federal Government Shutdown

Government shutdown disrupting normal verification and validation processes for mortgage lending operations

LOW

Impact Level

Top: Compliance (2)

Advisory Assessment

Impact. This guidance provides temporary flexibility for mortgage origination and servicing during the federal government shutdown, allowing lenders to use alternative documentation when standard verification processes are unavailable and requiring additional reserve requirements for affected borrowers.

Risk. Quality control teams face the highest exposure if they fail to properly document alternative verification methods or miss the reserve requirement triggers, particularly since examiners will scrutinize whether institutions maintained appropriate underwriting standards despite the accommodations.

Recommended Action. Operations should immediately update loan processing workflows to flag government employee borrowers and establish clear documentation protocols for verbal employment verification when standard channels are unavailable. Ensure underwriting teams understand the two-month reserve requirement kicks in if the shutdown extends past November 3rd.

Watch. Monitor shutdown duration closely, as guidance automatically expires when government operations resume, and track whether the November 3rd reserve requirement threshold is triggered for any loans in your pipeline.

Classification

Regulatory Program: GSE Mortgage Lending
Doc Type: Guidance
Effective Date: 2025-10-01
Days to Action: -288
Comment Deadline: —
Published: 2025-10-01

Urgency Basis

Temporary guidance that automatically expires when government shutdown ends; no ongoing compliance obligations beyond the shutdown period

Operational Context

Flags

Consumer Harm Risk

Affected Functions

Compliance Operations Customer Facing

Institution Applicability

All

Impact by Category

Compliance

Operational

Data Governance

Model Risk

Reporting & Disclosure

Capital & Liquidity

Consumer Protection

Third-Party Risk

Key Requirements

- Document loan files with written statements when verbal VOE cannot be obtained due to shutdown - Continue attempting to obtain most current paystub reflecting year-to-date earnings despite age waiver - Ensure borrowers have minimum two months reserves if shutdown extends past November 3, 2025 - Evaluate affected borrowers for forbearance plans under existing servicing guidelines - Maintain warranty that borrower is employed at loan delivery unless validated by DU service

Scoring Rationale

This is temporary operational guidance providing flexibility during a government shutdown rather than permanent regulatory change. Scores are kept low (1-2) because these are temporary accommodations to existing processes, not new substantive requirements. The guidance automatically expires when normal government operations resume, making this a short-term operational adjustment rather than a lasting compliance obligation.

Scored: 2026-05-19T05:01:20.436Z Model: claude-sonnet-4-20250514 Confidence: High Aggregate Score: 1.8

AI Analysis Disclosure — This record, including its scores, impact assessments, and Advisory Assessment (impact, risk, and recommended actions), was generated by an AI model and may contain errors or omissions. The Advisory Assessment is a starting point for analysis, not a substitute for professional judgment. Effective dates, applicability determinations, impact assessments, and any recommended actions should be independently verified against primary regulatory source documents and reviewed by qualified compliance or legal personnel before taking compliance action. This output does not constitute legal or compliance advice.