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What you need to know about AUS
What you need to know about AUS
 
     AUS is simply the acronym for Automated Underwriting System.  Still with me?  More commonly known in the real estate world as "DU", AUS is the program that issues automated loan approvals or rejections when a borrower's personal information is input.
 
     All AUS systems use algorithms that analyze things like borrower's total credit profile, their income, debt to income ratio, job history, asset reserves, and more.  AUS comes in some different shapes and sizes - 
 
     DU, or desktop underwriter, is Fannie Maes version and by far the most commonly used.  DU is capable of underwriting conventional, FHA, and VA loan types, and also lets a lender know what documentation they'll need to ensure Fannie Mae accepts their loan package (if there are requests beyond what's on DU, these are the "overlays" you so commontly hear about)
 
     LP is Freddie Macs version of DU.  Freddie Mac has similar guidelines to Fannie Mae with some slight differences in the algorithms used to determine approvals.  For example, Freddie Mac allows asset reserves to compensate for more shortcomings than DU, and there's no hard stop for derogatory credit events (it's possible to get an approval ... more

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