The Milliman Mortgage Repurchase Index (MMRI) is a lifetime repurchase rate estimate calculated at the loan level for single-family mortgages within each quarterly origination vintage. MMRI defines the repurchase rate as the likelihood that a loan will ever be bought back by the seller from the secondary market agencies, Fannie Mae or Freddie Mac. The results of the 2025 Q4 study reflect the most recent acquisition data available from Fannie Mae and Freddie Mac, with measurement dates starting from January 1, 2024.
Key findings
The value of the MMRI for government sponsored enterprise (GSE) acquisitions decreased slightly for Fannie Mae (from 0.181% to 0.173%) and for Freddie Mac (from 0.277% to 0.260%).1
Figure 1: MMRI 2025 Q4 dashboard for GSE loans
This reduction, though modest, is part of a broader trend and a positive signal for lenders and the larger market. It suggests that recent efforts by the GSEs and lenders to improve underwriting quality and income verification are having an effect, and that overall credit quality remains strong even in a dynamic rate environment.
Summary of trends
For the 2025 Q4 origination cohort, our latest MMRI results indicate that repurchase risk has decreased marginally for both Fannie Mae (−0.8 bps) and Freddie Mac (−1.7 bps). This continues the trend of generally stable or improving repurchase risk over the past several quarters. Notably, Freddie Mac’s repurchase risk remains somewhat higher than Fannie Mae’s, which is consistent with historical patterns. This may be attributable to differences in loan mix, borrower profiles, or underwriting practices between the two GSEs.
Freddie Mac’s most recent defect report2 (data through Q4 2025) shows that income-driven defects accounted for roughly a third of repurchases, with collateral-related issues also being significant. Fannie Mae3 also reports that a similar share of repurchases is income driven.
Defects related to income are common since the GSE selling guides provide absolute requirements on allowable DTI ratios. If an underwriting defect is found and the loan then exceeds the guideline DTI threshold, a loan repurchase is triggered. Figure 2 breaks down the origination volume by DTI for existing loans by origination quarter.
Figure 2: Distribution of DTI by origination cohort ($UPB)
| Freddie Mac | Fannie Mae | |||||||
|---|---|---|---|---|---|---|---|---|
| [0,45) | [45,48) | [48,50) | [50,100] | [0,45) | [45,48) | [48,50) | [50,100] | |
| 2024 Q1 | 67.6% | 14.1% | 11.7% | 6.6% | 70.8% | 13.6% | 10.5% | 5.1% |
| 2024 Q2 | 66.8% | 14.3% | 11.8% | 7.1% | 70.5% | 13.6% | 10.9% | 5.0% |
| 2024 Q3 | 69.0% | 14.0% | 11.1% | 5.9% | 71.3% | 13.5% | 10.4% | 4.7% |
| 2024 Q4 | 68.6% | 13.8% | 11.1% | 6.6% | 70.6% | 13.6% | 10.5% | 5.2% |
| 2025 Q1 | 67.7% | 14.2% | 11.5% | 6.7% | 69.8% | 13.9% | 11.0% | 5.4% |
| 2025 Q2 | 69.3% | 13.7% | 10.9% | 6.1% | 70.4% | 13.6% | 10.7% | 5.3% |
| 2025 Q3 | 70.0% | 13.5% | 10.7% | 5.8% | 70.5% | 13.7% | 10.7% | 5.1% |
| 2025 Q4 | 72.9% | 12.6% | 9.6% | 4.9% | 72.8% | 12.8% | 9.7% | 4.6% |
DTIs have gradually been decreasing over time, with larger shares in the [0, 45) bin relative to the underwriting threshold of 50. This trend has been observed for both Freddie Mac and Fannie Mae originations.
The continuing decline in tail share (DTI ≥ 48) is attributable to gradually declining mortgage rates, a trend that has been evident since 2023. When interest rates fall, the monthly mortgage payment used in the DTI calculation also decreases, all else being equal. The prevailing rate dropped from 6.55% in 2025 Q3 to 6.23% in 2025 Q4. Early numbers from 2026 Q1 indicate the 30-year mortgage rate declined to 6.11%.
Figure 3: Average 30-year U.S. mortgage rates
Mortgage rates, as a function of the 10-year Treasury bill, started to reverse course in early March of 2026 in response to market uncertainty surrounding military conflicts overseas and the resulting oil price shock. The impact on mortgage rates and whether they will continue the declining trend in Q2 will depend on the duration this shock has on financial markets.
The share of adjustable-rate mortgages (ARMs) as a proportion of all mortgage loans declined in Q4, the first time in 2025 for both Fannie Mae and Freddie Mac. The ARM share is relevant to loan repurchase given the differences in the DTI calculation. This makes the repurchase risk outlook for ARM borrowers more sensitive to shifts in the mortgage rate.
Figure 4: Arm volume as share of acquisition volume, 2012 Q1–2025 Q4
Recent expansions to the appraisal waiver programs announced in 2024 for Fannie Mae and 2025 for Freddie Mac continue to show up in the data for new originations. Figure 5 shows that the trend of increasing mortgage origination volume and the share of loans with appraisal waivers has continued through 2025 Q4.
The appraisal share has continued to increase for both Fannie Mae and Freddie Mac and now constitutes almost a quarter of newly originated conventional mortgages purchased by the GSEs.
Figure 5: Volume with an appraisal waiver by percentage of originations
Loans need to qualify to receive an appraisal waiver based on more rigorous credit standards. As a result, repurchase rates on appraisal waivers tend to be lower relative to other property valuation methods. Given that the appraisal was waived, it is also not possible to have an appraisal related defect. All else equal, the volume with an appraisal waiver is expected to increase with the expanded eligibility standards. We will monitor these loosened credit guidelines to determine whether they result in an increase in repurchase rates.
Both Fannie Mae and Freddie Mac have continued to develop tools to allow for streamlined quality control at mortgage underwrite. Fannie Mae recently announced additions to its Desktop Underwriter system to offer rep and warrant relief for defects related to undisclosed liabilities outside the mortgage payment.4 Freddie Mac has also released its Quality Control Advisor Plus platform to help automate traditionally error prone aspects of the underwriting process for lenders.5 Both programs could help reduce the cost and incidence of actual repurchase risk.
Another trend to monitor will be the introduction of Vantage Score 4.0 and FICO 10T for underwriting new mortgages. As of April 2026, Vantage Score 4.0 was approved on a limited rollout basis for loan delivery.6 The implementation and final approval of FICO 10T are expected following the publication of historical conventional mortgage data appending retro-scored FICO 10T data this summer. It is unknown how introducing modernized credit scores to mortgage underwriting will affect loan repurchase activity.
About the MMRI
Milliman is an expert in analyzing complex data and building transparent, intuitive, and informative econometric models. We have used our expertise to assist multiple clients in developing econometric models for evaluating mortgage risk, both at the point of sale and for seasoned mortgages.
The MMRI uses econometric modeling to develop a dynamic model that clients can apply in multiple ways. Because the MMRI produces a lifetime repurchase rate estimate at the loan level, clients use it as a benchmarking tool in loan defect pricing. The repurchase scoring methodology is constructed separately for repurchases that occurred, whereas loans were either performing or delinquent. For new origination cohorts, Milliman applies these scoring methodologies and weights them using the probability the loan will roll into serious delinquency. In addition, Milliman uses a mix of borrower attributes and loan characteristics to identify trends most associated with loan repurchase.
1 Please note the MMRI reflects Milliman’s proprietary model-based estimates and not actual mortgage repurchase results.
2 QC & Operation Risk Management. (n.d.). Freddie Mac loan delivery & repurchase trend reporting. Freddie Mac. Retrieved May 10, 2026, from https://sf.freddiemac.com/docs/pdf/loan-reporting-data-trends-q4-2025.pdf.
3 Fannie Mae. (n.d.). Dedicated to building better loan quality. Retrieved May 10, 2026, from https://singlefamily.fanniemae.com/originating-underwriting/loan-quality.
4 Fannie Mae. (2025, November 17). Enhancing efficiency: Undisclosed liabilities in Desktop Underwriter. Retrieved May 10, 2026, from https://singlefamily.fanniemae.com/originating-underwriting/loan-quality/quality-insider/november-2025.
5 National Mortgage Professional. (2025, November 19). Freddie Mac announces QC enhancement tool. Retrieved May 10, 2026, from https://nationalmortgageprofessional.com/news/freddie-mac-announces-qc-enhancement-tool.
6 U.S. Federal Housing. (2026, April 22). Homebuying advances into new era of credit score competition [News release].Federal Housing Finance Agency. Retrieved May 10, 2026, from Homebuying Advances into New Era of Credit Score Competition | FHFA.