Run DU/LP (AUS)
Submit to AUS, review findings, troubleshoot if needed.
Overview
AUS is the decision gate for the pre-approval. You're submitting the application to the agencies' automated underwriting engines — DU (Desktop Underwriter, Fannie Mae) and LP (Loan Product Advisor, Freddie Mac) — and what comes back determines whether a pre-approval letter goes out, what documentation the file will need, and sometimes which agency the loan should be run through.
Our default: run dual AUS — both engines at once. There's no cost per run, and the two engines evaluate differently; a file that refers on DU can accept on LP and vice versa. Running both from the start means you see the whole board immediately instead of discovering the LP path three days later.
Before you run
- Hard pull on file. AUS cannot run on soft pull credit — no exceptions. If the borrower is still on a soft pull, get the fresh hard pull first.
- 1003 reviewed and accurate. If the application came in online, the LO review from the previous step is done — every section verified against your qualifying-call notes.
No credentials or sponsorship setup is needed — DU/LP access works company-wide through Arive. A brand-new LO can run AUS on day one.
Running dual AUS in Arive
Scribe walkthrough pending — running dual AUS and where findings land in the file.
Reading the findings
The results you're looking for: Approve/Eligible from DU, Accept from LP. Either one is a green light for the pre-approval.
Findings reports auto-save to the Arive file — no manual filing needed. Read the highlights:
- The decision — Approve/Eligible, Accept, Refer, or ineligible, per engine
- Documentation requirements — the findings spell out what the file must contain (income docs, asset verification, reserves). This drives what gets collected during intake, so know what's on the list.
- Anything unusual — reduced doc relief (e.g., one paystub instead of two), reserve requirements, red flags the engine surfaced
The full deep-read of findings happens again at UW submission — at this stage you need the decision and the doc picture.
When it refers: the iteration loop
Refer or ineligible findings are the start of a process, not the end of the deal. Runs are free — iterate as many times as the file needs. There's no single dominant cause of refers; all of these show up regularly, so diagnose in this order (cheapest fix first):
- Data entry errors. Wrong income figure, missing asset account, mis-keyed liability, wrong property type. Re-verify the 1003 against your notes and the credit report. This fixes more refers than anything else.
- DTI too high. Restructure the deal: different price point, bigger down payment, paying off a debt at or before closing, adding acceptable income you missed.
- Assets/reserves insufficient. Are all accounts entered? Gift funds available? Reserve requirements met for the property type?
- Credit event seasoning. BK, foreclosure, short sale timing against agency seasoning requirements. Check the actual dates — the engine calculates from discharge/completion dates, and a mis-entered date can fail a file that actually qualifies.
Adjust, re-run, read the new findings, repeat until Approve/Eligible — or until you've honestly exhausted the structure.
What iteration means — and what it never means. Iterating is correcting data errors and restructuring the deal (price, down payment, debts paid at closing, program). It is NEVER adjusting income, assets, or liabilities away from reality to force an approval. Every AUS run must reflect the borrower's true situation — the findings become the basis of the underwritten file, and misrepresented inputs on a 1003 are mortgage fraud, full stop. If the truth doesn't qualify, the answer is restructuring or denial, not creative data entry.
When both engines still refer
If you've iterated honestly and both DU and LP still won't approve, the sequence is:
- Tell the borrower why. Plainly and specifically — what's blocking the approval (DTI, credit history, seasoning, reserves).
- Consider non-QM — only if the file genuinely fits. Non-QM is a real tool for the right profiles (self-employed with strong bank statements, real estate investors, recent credit events with strong compensating factors). It is not a dumping ground for files that simply don't qualify. If the parameters don't fit, don't force it.
- Credit-related failures: coach, then deny. If the blocker is credit, give the borrower a concrete path — what to pay down, what to let season, roughly when to come back. A denied borrower who gets real coaching becomes a funded loan in 12 months and a referral source after that. Then process the denial.
Denials have compliance requirements. A formal denial at application stage triggers adverse action notice obligations. Follow the adverse/denial process in Arive so the required notices go out. If you're unsure of the mechanics, ask Bryce before closing out the file.
Urgency doesn't change the process
Under-contract file or pre-approval shopper — same effort, same dual-run, same iteration discipline. The only difference is the clock: an under-contract refer needs same-day attention because the option period is burning.
Who to ask if you're stuck
Findings you can't interpret, refers you can't diagnose, restructuring ideas: Bryce or Dean.
Non-QM program fit: Bryce or Dean before pitching it to the borrower.
Denial/adverse action mechanics: Bryce.