Governance Framework for AI and Machine Learning Use

This document is a Lender Letter that establishes a governance framework for Fannie Mae Seller/Servicers regarding the use of artificial intelligence (AI) and machine learning (ML) in their loan origination and servicing practices. It outlines the necessity for compliance with applicable laws and the Lender Contract when utilizing AI/ML technologies. The framework emphasizes the importance of having transparent policies and procedures that govern the development, implementation, and maintenance of AI/ML systems. These policies must ensure ethical use, reflect legal and regulatory requirements, and incorporate risk management activities aligned with the lender's risk tolerance. Additionally, it mandates that seller/servicers manage risks associated with subcontractors and vendors using AI/ML. The document also stipulates that seller/servicers must disclose information about their AI/ML usage upon request from Fannie Mae, including the purpose, safeguards implemented, and any other relevant details.