Mortgage QC checklist: prefunding and post-closing, by agency
A mortgage QC checklist covers income, employment, assets, credit, collateral, occupancy, data and closing documents, checked against each agency's loan-level rules: Fannie Mae D1-2-01, D1-3-02 and D1-3-03, Freddie Mac 3402.2, and HUD Handbook 4000.1 V.A.3. The agencies differ on what is required before closing and what only happens after. The biggest split: FHA does not require reverification pre-closing.
Key numbers
- 10% minimum post-closing sample at all three agencies, with statistical alternatives (Fannie D1-3-01; Freddie 3402.2(a)(i); HUD V.A.3.a.iii)
- 90 days to finish the Fannie QC cycle from the disbursement month, and for Freddie to report results to senior management from selection (D1-3-01; 3402.3(b)(i))
- 30 days to notify Freddie Mac after results go to senior management, and to self-report to Fannie Mae after the date of confirmation (3402.3(b)(ii); D1-1-01)
- 60 days for FHA post-closing review after the prior one-month period, and for the initial Findings report from selection (V.A.3.a.i, V.A.2.c.iii)
- 10% or less pre-closing share of an FHA QC sample, 90% or more post-closing (V.A.3.a.iii.C)
- 60 days delinquent in the first six payments defines an FHA early payment default; Freddie's targeted sample uses 60+ days past due in the first six months (V.A.3.a.iv.B; 3402.2(a)(ii))
Fannie Mae
D1-2-01 lists what a prefunding full-file review "must include." D1-3-02 and D1-3-03 cover the post-closing file review and reverifications.
| Item | What to check | Where | Stage |
|---|---|---|---|
| AUS data | Data entered in DU is true, correct and complete; discrepancies outside tolerance mean resubmit | D1-2-01; D1-3-02 | Both |
| SSN | Consistent across the file; validation requirements met before closing | D1-2-01; D1-3-02 | Both |
| Income | Calculations and support; verbal VOE prefunding; reverify income and employment, every employer in the documentation period | D1-2-01; D1-3-03 | Prefunding review, post-closing reverify |
| Tax returns | Request IRS transcripts when returns supported income; pre-closing transcripts can be reused | D1-3-03 | Post-closing |
| Assets | Funds to close and reserves; reverify down payment, closing costs and reserves against original documents | D1-2-01; D1-3-03 | Both |
| Credit | New tri-merge (or each nontraditional reference); reconcile liabilities for undisclosed debt | D1-3-03 | Post-closing |
| Collateral | Appraisal data and CU flags reconciled; post-closing collateral risk assessment, property eligibility, LTV/CLTV/HCLTV | D1-2-01; D1-3-03 | Both |
| Mortgage insurance | Coverage adequate for the transaction | D1-2-01; D1-3-02 | Both |
| Occupancy | Review file documents; investigate red flags | D1-2-01; D1-3-03 | Both |
| Red flags | DU "potential red flag" messages and other alerts addressed | D1-3-02 | Post-closing |
| Closing | Approval conditions satisfied; final settlement statement matches final terms; documents complete and accurate | D1-3-02 | Post-closing |
Validated items change the work. Where DU validated income or assets, prefunding QC need not recalculate them, but the lender must confirm the verification report ID matches the final findings report and has not expired (D1-2-01). Post-closing, DU-validated items need no reverification only if all enforcement-relief conditions are met and the loan closed by the "Close by Date" (D1-3-03).
Freddie Mac
Section 3402.2(b) lists the reverifications; (c) and (d) the data integrity and documentation reviews; (e) the preclosing review, which "should" include the validations below rather than "must."
| Item | What to check | Where | Stage |
|---|---|---|---|
| LPA data | Data entered in Loan Product Advisor | 3402.2(c), (e)(iii) | Both |
| SSN | Validate each Borrower's number unless already validated | 3402.2(b)(ii), (e)(iii) | Both |
| Employment, income, funds | Reverify all used in underwriting; written verbal-reverification record | 3402.2(b)(i)(A), (e)(iii) | Both |
| Tax transcripts | Form 4506-C or equivalent, full years matching income used | 3402.2(b)(i)(B) | Post-closing |
| Credit | Check for additional credit granted; LPA Accept: no new report; non-LPA: new report | 3402.2(b)(iii), (e)(iii) | Both (new report post-closing) |
| Occupancy | Verify primary-residence occupancy | 3402.2(b)(iv) | Post-closing |
| Valuation | Desk review; field review if desk review is insufficient | 3402.2(b)(v) | Post-closing |
| Mortgage insurance | Commitment reflects adequate coverage | 3402.2(e)(iii) | Preclosing |
| Documentation | Compliance with law, eligibility, Exclusionary List, closing conditions; Settlement/Closing Disclosure, note, security instrument, title, hazard and flood evidence | 3402.2(d) | Post-closing |
For non-LPA loans, a new Residential Mortgage Credit Report or three-repository merged report is required on one in ten sampled loans; the rest need a new in-file report.
HUD (FHA)
V.A.3.c lists the case binder review areas with separate pre-closing and post-closing columns.
| Item | What to check | Where | Stage |
|---|---|---|---|
| Appraisal, underwriting documents, disclosures, origination documents | Completeness and accuracy | V.A.3.c.i | Both |
| Credit report and outstanding debt | New report in the same form as the original; compare for adverse discrepancies | V.A.3.c.ii.A | Post-closing (new report not required pre-closing) |
| Employment, income, assets, gift funds, source of funds, housing payments | Reverify in writing or electronically; telephone if no reply | V.A.3.c.ii.B | Post-closing only |
| Self-employed Borrowers, compensating factors | Underwriting accuracy | V.A.3.c.i | Both |
| Borrower occupancy | Confirm | V.A.3.c.i | Post-closing |
| Flipping, restrictive covenants, QM, Loan Estimate, condition clearance | Compliance | V.A.3.c.i | Both |
| Closing procedures, Closing Disclosure, pre-endorsement, timely submission for insurance | Complete and compliant | V.A.3.c.i | Post-closing |
| Participants | Check SAM, LDP list and NMLS | V.A.3.f | Origination review |
| Data | Validate all AUS and FHA Connection data elements | V.A.4 | Both |
HUD states it plainly: "Reverification is not required for pre-closing reviews." Pre-closing discrepancies must be resolved before closing.
File-level process and timelines
| Step | Fannie Mae | Freddie Mac | HUD |
|---|---|---|---|
| Selection | Monthly; random plus discretionary (D1-3-01) | Random, targeted, discretionary (3402.2(a)) | Monthly; random, EPD, discretionary (V.A.3.a) |
| Review | Cycle ends within 90 days of disbursement month | Every loan can be selected within 90 days of Note Date | Post-closing within 60 days of the prior one-month period |
| Findings and rebuttal | Rebuttal is inside the 90-day cycle | Document discrepancies (3402.3(a)) | Discuss with responsible parties (V.A.2.c.iii.C) |
| Management report | Monthly (D1-1-03) | Within 90 days of selection | Initial report 60 days from selection; to senior management within 30 days; final within 60 days after that |
| Agency notice | 30 days from date of confirmation | 30 days from management report | Fraud: immediately; other unmitigated Material Findings within 90 days of the initial report |
The sections cited set no separate rebuttal period. Retention: three years at Fannie and Freddie (D1-1-01; 3402.3(c)).
How Flightline checks this
Flightline reviews the whole loan file, follows the evidence when something doesn't add up, and returns defensible findings the same day. It runs hundreds of tests across 12 review areas on each file they apply to, and which tests apply depends on the program, the property and the transaction. Most of this checklist maps to those areas: income, assets, credit and undisclosed debt, appraisal, program eligibility, AUS reconciliation, compliance and closing. Every finding comes with evidence by page and the requirement cited to its section. Your QC plan and the decisions in it stay yours; Flightline supports the review.
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FAQ
Does FHA require reverification before closing?
No. HUD 4000.1 V.A.3.c.ii.B states "Reverification is not required for pre-closing reviews." It is required on post-closing reviews, and a new credit report is not required pre-closing.
Does Fannie Mae require a new credit report in prefunding QC?
D1-2-01 does not list one. D1-3-03 requires reverified credit history, a new tri-merge for traditionally scored loans, in post-closing random reviews.
Is the Freddie Mac preclosing review mandatory?
The program must include one on a sampling of Mortgages (3402.2(e)), but the validations listed are what an effective process "should" include.
How much of an FHA QC sample can be pre-closing?
10% or less, with 90% or more post-closing. A lender closing nine or fewer loans in the prior month must pre-close review at least one.
Which agency has the shortest deadline to notify it?
HUD for fraud: report "immediately." For other items, Fannie and Freddie give 30 days from the trigger date, HUD 90 days from the initial Findings report.
Sources
- Fannie Mae Selling Guide, D1-2-01, Lender Prefunding Quality Control Review Process (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-2-01/lender-prefunding-quality-control-review-process
- Fannie Mae Selling Guide, D1-3-01, Lender Post-Closing Quality Control Review Process (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-3-01/lender-post-closing-quality-control-review-process
- Fannie Mae Selling Guide, D1-3-02, Post-Closing QC Review of Approval Conditions, Underwriting Decisions, Data, and Documentation (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-3-02/lender-post-closing-quality-control-review-approval-conditions-underwriting-decisions-and
- Fannie Mae Selling Guide, D1-3-03, Lender Post-Closing Quality Control Reverifications (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-3-03/lender-post-closing-quality-control-review-data-integrity
- Fannie Mae Selling Guide, D1-1-01, Lender Quality Control Programs, Plans, and Processes (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-1-01/lender-quality-control-programs-plans-and-processes
- Fannie Mae Selling Guide, D1-1-03, Lender Quality Control Reporting (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-1-03/lender-quality-control-reporting
- Freddie Mac Seller/Servicer Guide, 3402.2, Quality control processes (effective 09/02/2026): https://guide.freddiemac.com/app/guide/section/3402.2
- Freddie Mac Seller/Servicer Guide, 3402.3, Documenting and reporting (effective 05/06/2026): https://guide.freddiemac.com/app/guide/section/3402.3
- HUD Handbook 4000.1, Section V.A, Quality Control of Lenders and Mortgagees (Update 18, last revised 8/12/2026): https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
This guide summarizes agency requirements as of the date above. It is not legal advice.