What Is DU In Mortgage?

Through this article, you will find out what is DU in mortgage and why it is essential.

Desktop Underwriter (DU) is an automatic underwriting framework for mortgage guaranteeing created by Fannie Mae that helps mortgage lenders by computing whether a credit meets endorsement prerequisites. This is for both regular and government loans. At times, It is also utilized by the Federal Housing Authority (FHA). But what is DU in mortgage? Read this article and figure out how desktop underwriter functions and how it can assist you with contending in the real estate market.

What Is Desktop Underwriting?

Fannie Mae utilizes its Desktop Underwriter program to assess whether a borrower is a good enough risk for a loan. This is done by taking a look at various elements, such as:

  • Price
  • Salary
  • Resources
  • Employment Information
  • Debt

These sources of info are utilized to compute whether a borrower meets the capabilities for a specific loan. On the off chance that the prerequisites are met, it will give a mechanized endorsement.

Desktop Underwriter sets the business standard in guaranteeing mortgages. Since it is computerized, it permits credit originators to settle on capability choices utilizing rationale and calculations. It consequently eliminates contemplations, for example, race, sexual orientation, or other prohibited factors.

In the event that you can’t get mechanized approval through Desktop Underwriter, you may require manual guaranteeing to secure your credit.

Alternate name: Desktop Originator (utilized by sponsored mortgage brokers to get a hold of Desktop Underwriter)

Acronym: DU (or DO)

How Does Desktop Underwriting Work?

Mortgage loan originators request that borrowers complete an advance application, usually alluded to as a Form 1003. Some types of data you can expect to see on a Form 1003 are:

  • Type of mortgage and terms of the loan
  • Borrower information
  • Details of transaction
  • Property address and purpose of the loan
  • Monthly income
  • Real estate owned
  • Employment information
  • Assets
  • Declarations
  • Liabilities

The contributions to Desktop Underwriter relate to these areas of Form 1003. The program at that point utilizes this data, in addition to more than 75 outsider sellers, to decide if the borrower is an adequate financial risk and can be affirmed.

Desktop Underwriter is just in the same class as the data provided to the program; off base or missing data can harm your odds of endorsement. Likewise, DU does not address whether a loan consents to government guidelines; that part is up to the lender.

DU And LP Mortgage

Desktop Underwriter (DU) and Loan Prospector (LP) are automated underwriting systems (AUS) crucial for mortgage approval. Lenders rely on these systems to determine if a loan meets Fannie Mae or Freddie Mac’s criteria, making DU or LP endorsement essential for closing a mortgage.

To initiate a mortgage application, the loan officer collects borrower information including income, employment history, credit history, and assets.

Once entered into a loan origination system, the data is fed into either DU or LP. These systems then analyze the information against Fannie Mae or Freddie Mac guidelines.

Depending on integrations with third-party data providers, the system automatically verifies additional information.

The AUS then issues an automatic approval or denial, along with instructions on required documentation for verification. It also indicates the success of auto-approval, if applicable.

While credit history is always verified, income may be auto-approved if reported by the employer to an external service, and assets if the borrower opts to include bank information.

Armed with initial AUS approval, the loan officer submits the loan for underwriting, along with borrower documentation.

The mortgage underwriter verifies the submitted information and reruns DU or LP. Based on the documentation and AUS guidelines, the underwriter issues conditions. Once these conditions are met, the loan is ready for closing.

It’s important to note that initial DU or LP approval does not guarantee final mortgage approval. While it’s a positive sign, the lender still needs to verify documentation before granting final approval.

DU Underwriting Recommendations

DU Underwriting Approve/Ineligible Recommendations

These recommendations do not contemplate any extra credit hazard or different elements that may be related with the reason the advance is ineligible for conveyance to Fannie Mae. The lender must decide whether the reason behind the ineligibility makes an extra layering of credit risk that ought to be considered as the loan specialist settles on the guaranteeing choice.

DU Underwriting Approve/Eligible Recommendation

This recommendation fulfills Fannie Mae’s credit risk principles/evaluation and furthermore Fannie Mae’s mortgage loan qualification measures. Besides, it is also qualified for Fannie Mae’s restricted waiver of certain mortgage loan qualification and underwriting portrayals and guarantees, as long as the mortgage loan fulfills the material necessities identified with restricted waivers.

How To Read DU Findings?

  1. Click on the hyperlink in the Underwriting Recommendation section for the loan casefile.
  2. The Desktop Underwriter Findings will be shown. You can directly explore each segment of the Underwriting Findings report through the right-side menu.
  3. To distinguish messages that have been added, erased or changed since your last submission, switch Show Changes ON at the top left of the page. This component is just accessible in reports that have at any rate two entries
  4. The Filtering capacity permits you to filter messages to just see the ones identified with Day 1 Certainty. To filter messages, select Day 1 Certainty in the View drop down menu.
  5. You can move to and fro between the Underwriting Findings report and the Credit report by tapping the links at the top of the page. For instance, on the off chance that you are as of now seeing the Findings report and you need to see the credit report, click Credit Report.
  6. The Underwriting Analysis report shows up toward the end of the Underwriting Findings. To see the Underwriting Analysis Report, click the related link in the right-side menu.
  7. To print the report you are right now seeing, click the PRINT button.
  8. At the point when you are finished exploring the Underwriting Findings report and Underwriting Analysis report, click the Loan Information button to revisit the Loan Information screen.


In the competitive housing markets of Southern California, securing a home loan approval can be challenging. However, leveraging the expertise of a skilled home loan credit official ensures that borrowers provide the necessary documentation upfront. Moreover, integrating an automated underwriting system acts as a crucial double-check, reducing the risk of missing vital information before submission to the underwriter.

Furthermore, for prospective homebuyers navigating competitive markets like Southern California, obtaining an LP or DU advance approval can be a game-changer. This advanced approval not only sets them apart from other buyers but also provides comprehensive insights, surpassing the basic pre-approval process.

Charles Bains

Charles Bains

Charles Bains started his insurance career as a marketing intern before pounding the pavement as a commercial lines agent in Orlando, FL. As an industry journalist, his articles have appeared in a variety of trade publications. His insurance television career, short-lived but glorious, once saw him serve as the expert adviser on an insurance-themed infomercial (yes, you read that correctly). Having recently worked for various organizations, coupled with his broader insurance knowledge, Charles is able to understand our client’s needs and guide them accordingly. He is a gem for Insurance Noon as his wide area of expertise and experience have been beneficial in conducting further researches to come up with solutions and writing them in a manner which is easy for everyone including beginners to comprehend.