Fannie Mae’s requirements for governing AI and machine learning take effect Tuesday, Aug. 6, and they bind every approved seller and servicer that does business with the GSE. This is an enforceable mandate, not guidance.

The rules apply whenever a seller/servicer uses AI or ML in connection with loans that Fannie Mae buys, guarantees, or services. The framework originates from an April 8 lender letter with a 120-day runway that expires this week.

By the deadline, covered firms need written policies covering AI risk management, compliance with applicable law, ethical and trustworthy use, employee communication, and at least an annual program review. Fannie Mae also reserves the right to demand, on short notice, a disclosure of what AI systems a firm runs, why, and what safeguards are in place.

The mandate also enforces vendor parity. Firms must hold the AI used by their vendors and subcontractors to protections no weaker than those applied to their own internal systems. That pushes the mandate down the entire housing-finance supply chain.

For security and compliance leaders, the precedent matters beyond mortgages. Fannie Mae is enforcing audit-ready AI controls on its counterparties and their subcontractors. Freddie Mac has run its own AI/ML governance framework since March 3. Lenders, servicers, and their tech vendors that have treated AI oversight as optional have two days to close the gap.

Source: nationalmortgageprofessional.com