What is DU Project Review Approval?

DU (Desktop Underwriter) is Fannie Mae’s automated underwriting system, and it can determine project eligibility for certain condo loans. This helps streamline the process for borrowers buying into established, warrantable condo projects.

Here’s how it helps:

1. Saves Time: DU can indicate whether a condo project is eligible without requiring a full project review upfront.
2. Increased Clarity: DU findings will now clearly state if the project is conditionally approved—cutting down on surprises down the line.

What to Look for in the DU Findings

When a condo loan runs through DU, the approval findings will include this language when the project is eligible:

"The project appears to meet the applicable Fannie Mae project eligibility requirements for loans delivered to Fannie Mae..."

This language signals that the condo project meets the guidelines—but it’s always subject to final validation, including required documentation like the limited review or full review as needed.

Quick Reminders:

1. Approval Isn’t a Free Pass: Even with DU approval, all standard condo documentation (budget, insurance, HOA questionnaire, etc.) still needs to be reviewed and retained.
2. Check Eligibility Requirements: The DU approval assumes the property type and borrower scenario align with eligibility rules. If not, manual reviews may still be required.
3. Be Proactive: DU doesn’t eliminate the need for due diligence—it simply helps you spot eligible projects earlier in the process.

Why This Matters

For LOs and processors alike, understanding how DU evaluates condo projects means fewer delays, fewer surprises, and a smoother path to closing. This is especially helpful when working with first-time condo buyers or agents unfamiliar with the nuances of condo lending.