Mortgage quality control plan template: what Fannie Mae, Freddie Mac and HUD require
A mortgage QC plan is the written part of a lender's QC program: the standards, sampling, review procedures, reporting, corrective action and records that show how loan quality is checked. Fannie Mae, Freddie Mac and HUD each say what the written plan must cover, and they differ on sample size, report timing and retention. The outline below covers all three; fill each section from your own operations.
Key numbers
- 10% minimum random post-closing sample at Fannie Mae, or a statistical sample at 95% confidence and 2% precision (D1-3-01)
- 10% of the vendor's post-closing sample that you must re-review yourself each month if you outsource QC (Fannie Mae D1-1-02)
- 3 years minimum record retention at Fannie Mae (D1-1-01) and Freddie Mac (3402.3(c)); 2 years at HUD (4000.1 V.A.1.d.i)
- 90 days from selection to written report to senior management at Freddie Mac (3402.3(b)(i))
- 60 days from selection to initial findings report at HUD (4000.1 V.A.2.c.iii)
- 30 days to notify the agency after an ineligibility finding: Fannie Mae from the "date of confirmation" (D1-1-01), Freddie Mac from the report to senior management (3402.3(b)(ii))
How to use the outline
Give each section below its own heading in your plan. Answer the prompt in your terms and name the owner, frequency and where evidence lives. Fannie Mae says the plan must be "documented" and "establishes standards for quality"; HUD says a QC plan "is a written plan that sets forth a Mortgagee's procedures."
The plan outline
1. Purpose, standards and risks. State your QC philosophy, objectives, the specific risks you measure, and how you keep QC independent and unbiased. Set a severity scale and a target defect rate, with the rationale written down. Fannie Mae D1-1-01 requires the target for the highest severity, measured at least quarterly and reset at least annually. HUD V.A.1.a lists the program's aims, including root cause and fair lending.
2. Governance and independence. Name who owns the plan and who QC reports to. Fannie Mae D1-1-02 requires QC staff independent of production, underwriting and closing, or a written rationale and controls where that is not evident. Freddie Mac 3402.1(a) requires post-closing QC independent of origination and underwriting, but allows it to sit with them when annual production is under 5,000 Home Mortgages. HUD V.A.2.a.i bars QC employees from any reporting chain connected to loan administration.
3. Staffing and qualifications. Write minimum job qualifications, training, and who handles specialized reviews (Fannie Mae D1-1-02 names collateral risk assessments and self-employed borrowers).
4. Procedures. Detailed operating and reporting steps for everyone touched by QC (Fannie Mae D1-1-01; Freddie Mac 3402.1(a)).
5. Sampling. Say how you pick loans, how often, and how you document it. Cover random and discretionary selections across channels, products and underwriting methods (Fannie Mae). Add Freddie Mac's targeted sample of loans 60 or more days past due within six months of the Note Date (3402.2(a)(ii)). For HUD, add early payment defaults, your pre- and post-closing mix and the sample-size record (V.A.3.a).
6. Review scope and reverification. List what each review tests: eligibility, underwriting support, collateral, compliance with law, and the reverifications (income, employment, assets, credit). Freddie Mac 3402.2(b) and HUD V.A.3.c.ii set these out.
7. Findings, risk rating and corrective action. Define how you rate a loan (HUD uses Low, Moderate and Material risk; Fannie Mae and Freddie Mac leave the scale to you). Require a written action plan when trends appear, with expected resolution and timeline (Fannie Mae D1-1-01).
8. Reporting. Set the report contents, frequency and audience. Fannie Mae D1-1-03 requires written, monthly reports to management with a defect trend of at least three months, and loan-level findings sent to the responsible business unit. Say who gets external notices and how: Loan Quality Connect (Fannie Mae), the Tip Referral Tool (Freddie Mac), the Loan Review System (HUD, Title II).
9. Vendor oversight. If you outsource, require the vendor to follow your plan and describe your monthly re-review (Fannie Mae D1-1-02). Freddie Mac 3402.1(b) requires you to "monitor and evaluate" third-party QC services and take the same corrective action as for your own staff's findings.
10. Record retention and plan audit. Say what you keep, where, and for how long. Fannie Mae D1-1-01 also requires an independent audit of the QC process that assesses whether other business units influenced QC decisions, with a written statement of conclusions.
Where the agencies differ
| Item | Fannie Mae | Freddie Mac | HUD (FHA) |
|---|---|---|---|
| Sample | Random plus discretionary; 10% or statistical (D1-3-01) | Random, targeted and discretionary; 10% of a chosen population (3402.2(a)) | 10% at 3,500 or fewer loans a year; above that 10% or a stratified sample (V.A.3.a.iii) |
| Report timing | Monthly to management; cycle done in 90 days (D1-1-03, D1-3-01) | In writing to senior management within 90 days of selection (3402.3(b)(i)) | Initial findings in 60 days; final report 60 days after senior-management reporting (V.A.2.c.iii) |
| Notice to the agency | 30 days from date of confirmation | 30 days after reporting to senior management | Fraud immediately; other unmitigated Material Findings within 90 days of the initial findings report (V.A.2.c.iv) |
| Retention | 3 years | 3 years from the review date | 2 years |
| Severity scale | You define it; top level is ineligible as delivered | Not prescribed in the sections read | Low, Moderate, Material |
Brokers and small lenders
The sources address lenders that sell or insure loans, not brokers as a class. Fannie Mae D1-1-01 says a lender with 100 or fewer third-party originations a year "is not required to have a stratified sample or separate reporting" for them. Freddie Mac 3402.1(a) lists broker-sourced loans among the origination sources your program must reflect. HUD requires the Mortgagee to monitor loans from sponsored third-party originators (V.A.2.c.ii) and sets a one-loan monthly pre-closing minimum for lenders that close nine or fewer loans (V.A.3.a.iii(D)). If you originate as a broker, ask the lender you deliver to what it requires of you; these sections do not say.
How Flightline checks this
A plan describes what is reviewed and reported, and Flightline works from that. Review basis is the Fannie Mae Selling Guide, Freddie Mac Seller/Servicer Guide, HUD Handbook 4000.1, VA Lenders Handbook and USDA HB-1-3555, plus "your overlays and QC plan." Flightline reviews the whole loan file and returns, in the loan audit report, "every finding with its evidence, requirement, effect on the loan and the lender's response, sealed when it is issued." Those findings feed the monthly QC report and corrective action your plan calls for. Flightline is "independent of the process that made the loan," but the lender owns the plan and stays accountable to the agencies.
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FAQ
What is a quality control plan in mortgage lending?
It is the written element of a lender's QC program. HUD defines it as "a written plan that sets forth a Mortgagee's procedures for ensuring quality control." Fannie Mae requires a documented plan with standards, procedures, sampling, reporting, corrective action, vendor review, retention and an audit.
Is there a mortgage quality control plan PDF I can copy?
The three agencies' guides describe required contents, not a form. Use the outline above as your table of contents and write each section from your operations.
What does an FHA quality control plan need?
Pre-closing and post-closing reviews, a statistically valid sample, early payment default reviews, a loan sample risk assessment, independence rules, reporting to senior management and FHA, and retained records (4000.1 V.A). Title II Mortgagees and Title I Lenders must also submit a copy of the plan (4000.1 I.A.3, Quality Control Plan).
Can a vendor write and run our QC plan?
A vendor can run reviews. Fannie Mae holds you "fully accountable" and says a contract "is not a substitute" for your own plan, and HUD says the same about contractors.
Does a small lender have to follow the same rules?
The exceptions are narrow and agency-specific: Fannie Mae's 100-or-fewer third-party exemption, Freddie Mac's under-5,000 independence allowance, and HUD's nine-or-fewer-loans pre-closing rule.
Sources
- 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, D1-1-02, Lender Quality Control Staffing and Outsourcing of the Quality Control Process (04/01/2026): https://selling-guide.fanniemae.com/sel/d1-1-02/lender-quality-control-staffing-and-outsourcing-quality-control-process
- 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
- 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
- Freddie Mac Seller/Servicer Guide, 3402.1 (effective 05/06/2026): https://guide.freddiemac.com/app/guide/section/3402.1
- Freddie Mac Seller/Servicer Guide, 3402.2 (effective 09/02/2026): https://guide.freddiemac.com/app/guide/section/3402.2
- Freddie Mac Seller/Servicer Guide, 3402.3 (effective 05/06/2026): https://guide.freddiemac.com/app/guide/section/3402.3
- HUD Handbook 4000.1, Update 18 (last revised 8/12/2026), Section I.A.3 (Quality Control Plan) and Section V.A: https://www.hud.gov/sites/default/files/Housing/documents/40001-hsgh-Update-18.pdf
- HUD Mortgagee Letter 2026-09 (June 23, 2026): https://www.hud.gov/sites/default/files/hudclips/documents/2026-09hsgml.pdf
This guide summarizes agency requirements as of the date above. It is not legal advice.