Under Fannie Mae's Selling Guide, a lender's final DU submission on January 10 produced a value acceptance offer, and no appraisal was obtained. The note and mortgage are dated May 20. May the lender exercise the offer?
Correct Answer
B) No, because the offer is more than four months old on the date of the note
Fannie Mae lets a lender exercise value acceptance only if the final DU submission produced the offer, no appraisal was obtained, and the offer is not more than four months old on the date of the note and mortgage. From January 10 to May 20 is more than four months, so the third condition fails. Meeting the first two conditions or including SFC 801 does not cure a stale offer, and the age is measured on the note date.
Why This Is the Correct Answer
Option B is correct because a value acceptance offer may be exercised only if it is not more than four months old on the date of the note and the mortgage. January 10 plus four months is May 10, so on May 20 the offer is too old even though the other two conditions are met.
Why the Other Options Are Wrong
Option A: Yes, because the final submission produced the offer and no appraisal was obtained
Option A is wrong because it checks only two of the three conditions. The offer must also be no more than four months old on the note date, and on May 20 it is more than four months past January 10.
Option C: Yes, as long as the lender includes SFC 801 when the loan is delivered
Option C is wrong because SFC 801 is a delivery requirement for loans where value acceptance is properly exercised. Including the code does not make an offer that is more than four months old usable.
Option D: Yes, because the offer's age is judged as of the final DU submission, not the note date
Option D is wrong because the Selling Guide measures the offer's age on the date of the note and the mortgage, not on the date of the final DU submission. Measured that way, the January 10 offer is more than four months old on May 20.
Final, no appraisal, four months
Three gates to exercise value acceptance: the final DU run made the offer, no appraisal was ordered, and the offer is no more than four months old at the note date.
How to use: Use this checklist whenever a question asks whether a lender may still exercise a value acceptance offer.
Exam Tip
Count the months from the offer date to the note date, not to the delivery or submission date.
Common Mistakes to Avoid
- -Measuring the offer's age at the DU submission or delivery date instead of the note date
- -Treating SFC 801 as curing an eligibility problem
- -Checking only some of the three exercise conditions
Concept Deep Dive
Analysis
This question tests the three conditions for exercising value acceptance and requires a date calculation. The candidate must see that two conditions are met but the offer's age on the note date, January 10 to May 20, exceeds four months.
Background Knowledge
Under value acceptance, Fannie Mae accepts the lender's value estimate without an appraisal. Because market conditions change, the Selling Guide limits how old the offer may be when the loan closes, and it requires the offer to come from the final DU submission.
Real-World Application
A purchase is delayed by repairs, and closing slips from April to late May. The lender's value acceptance offer from early January is now more than four months old on the note date, so the lender cannot exercise it and must look at its other options, such as resubmitting to DU or obtaining an appraisal.
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