# Automated underwriting

> Automated underwriting is software that weighs your credit, income, debts and assets against an agency’s risk model and gives a recommendation in minutes.

URL: https://mail.mortgage-math-us.com/glossary/automated-underwriting/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**Automated underwriting** is software that evaluates a mortgage application against an agency’s risk model and returns a recommendation within minutes. Fannie Mae’s Desktop Underwriter (DU) and Freddie Mac’s Loan Product Advisor (LPA) handle most conventional loans; FHA files are scored by FHA’s TOTAL Mortgage Scorecard, and USDA uses its Guaranteed Underwriting System.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Highest DTI with a DU approval | 50% | [Fannie Mae Selling Guide B3-6-02](https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios) | Apr 2, 2025 |
| Fannie Mae DTI limit without DU (manual) | 36% | [Fannie Mae Selling Guide B3-6-02](https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios) | Apr 2, 2025 |

## How it weighs a file

Instead of applying fixed cutoffs one at a time, the system looks at the whole file together: credit score and history, [debt-to-income ratio](https://mail.mortgage-math-us.com/glossary/debt-to-income-ratio/), loan-to-value, [reserves](https://mail.mortgage-math-us.com/glossary/reserves/), loan type and property. Strength in one area can offset weakness in another, which is why DU can approve a DTI up to 50%, while a manually underwritten Fannie Mae loan starts at 36%, and why Fannie Mae sets no fixed minimum score for DU files. The findings also list what the lender must verify before closing.

## When the answer is “refer”

A DU recommendation of Approve/Eligible means the loan meets Fannie Mae’s risk standards, subject to verification. A Refer with Caution, or a Refer from FHA’s scorecard, isn’t a denial: where the program allows, the lender can send the file to [manual underwriting](https://mail.mortgage-math-us.com/glossary/manual-underwriting/), or restructure the loan with a bigger down payment or a paid-off debt and resubmit. Since the result depends on what’s in your file, errors on your credit report matter; check them before applying, as the [pre-approval guide](https://mail.mortgage-math-us.com/buying/pre-approval/) explains.

## Related terms

- [Underwriting](https://mail.mortgage-math-us.com/glossary/underwriting/), the full review process

## Sources

- [Fannie Mae Selling Guide B3-6-02](https://selling-guide.fanniemae.com/sel/b3-6-02/debt-income-ratios) — Fannie Mae maximum DTI, Desktop Underwriter loans; Fannie Mae maximum DTI, manually underwritten loans (Apr 2, 2025)
- [Fannie Mae: Desktop Underwriter](https://singlefamily.fanniemae.com/applications-technology/desktop-underwriter-desktop-originator)

_General information, not financial advice._