Ft. Lauderdale Desktop Underwriting (DU) Findings: What They Mean for Your Conventional Approval

Search Intent and Audience Fit

Ft. Lauderdale home buyers, refinancers, and investors want clarity about what Desktop Underwriter, commonly called DU, actually means for a conventional mortgage approval. You will hear lenders say we ran DU and got Approve Eligible, or DU came back with Refer With Caution, or DU requires reserves. The phrases sound technical, and they are, but they are also practical. Once you understand what DU is evaluating and how to read the Findings report, you can move faster, prepare cleaner documents, and keep your purchase or refinance on track in Broward County. This guide translates DU into plain language, with a special focus on condo heavy neighborhoods, coastal insurance realities, and the way lenders use DU alongside human underwriters to issue a final clear to close.

DU Basics for Conventional Loans

Desktop Underwriter is Fannie Mae’s automated underwriting system. Lenders use it to evaluate risk against agency guidelines and to produce a standardized Findings report that details eligibility, documentation, and conditions. DU is not the lender. It is a rules and risk engine that analyzes the data your lender enters about your credit, income, assets, property, and loan structure. Based on that data, DU assigns a recommendation such as Approve Eligible, Refer With Caution, or Ineligible. A strong DU result streamlines processing, but a human underwriter still verifies documents and solves issues that software alone cannot resolve. In short, DU is the map while the underwriter is the driver.

How DU Evaluates a Loan File

DU weighs several dimensions at once. Your credit profile contributes data such as scores, depth of trade lines, balances, and recent inquiries. Your income section includes base wages, overtime, bonus, commission, self employment income, and any deductions or business losses that may offset it. Your assets show where down payment funds come from, how long they have been seasoned, and whether reserves remain after closing. Property data covers occupancy, property type, value, appraisal requirements, and project review for condos. Finally, the loan structure defines the purpose, term, product type, and whether mortgage insurance will be present. DU pulls these threads into an overall risk grade and then generates the set of conditions a lender must clear before closing.

Reading Your DU Findings

Think of Findings as a road map. The first page shows the recommendation and eligibility. Approve Eligible means DU believes the file fits agency risk tolerances if the listed conditions are met. Refer With Caution means the risk grade did not pass on the current data and the lender must either improve the file or consider other options. Ineligible usually means a hard rule was violated, such as a waiting period after a significant credit event or a loan structure outside program limits. Below the recommendation are messages that become your task list: documentation proofs, reserve requirements, appraisal notes, or clarifications your lender must obtain. If you read the messages early with your loan officer, you can turn Findings into a simple checklist rather than a surprise late in the process.

Credit Profile Signals DU Cares About

Credit scores matter, but DU goes deeper. Thin files with only a couple of recent trade lines may receive a tougher response than thick files with years of on time history, even when scores match. Revolving utilization influences risk, and large recent balance spikes can trigger messages about verifying accounts or reducing debt. Disputed accounts may cause DU to ask for removal or additional documentation. If you have prior credit events, Findings will reference waiting periods. For example, conventional programs require set time frames after bankruptcy, foreclosure, or deed in lieu. In Broward County’s competitive condo market, buyers sometimes open new trade lines for furniture or appliances before closing. DU can react to new inquiries or new debt, so it is smart to hold off on new credit until the loan funds.

Income and Employment in DU

DU distinguishes between stable salaried income and variable income. For wage earners, Findings typically request recent pay stubs and W 2s, sometimes with a written verification of employment. For variable income such as bonus, overtime, or commission, DU often expects a multi year history so the underwriter can average and assess stability. For self employed borrowers in Ft. Lauderdale’s vibrant small business scene, DU messages guide the lender to collect business tax returns, K 1s when applicable, and year to date profit and loss statements. If recent years show declining income or significant write offs, Findings may escalate conditions or push the file to a more conservative manual review. Clear documentation early helps DU align with the true, supportable income picture.

Assets, Reserves, and Sourcing

When DU references reserves, it is measuring how many months of the new housing payment you will have left in verified liquid or near liquid assets after closing. Primary residence files may show no reserves required, while second homes and investment properties often require more. If your bank statement shows a large recent deposit, Findings will usually ask for sourcing. That could mean a gift letter, a documented sale of an asset, or a paper trail from one of your own accounts. Automated asset verification services can satisfy some of these requests digitally. In Ft. Lauderdale, buyers often receive gift funds from family or move money between brokerage and checking accounts. Planning those transfers well in advance keeps DU messages straightforward and easy to clear.

Property and Appraisal Triggers

DU reviews property information to determine what level of valuation is required. On some files that meet strict data thresholds, DU may offer an appraisal waiver. More commonly, DU will require a standard appraisal and provide messages that the lender and appraiser must address. If the contract includes seller concessions, DU checks that they fall within allowable limits for the occupancy and product type. If a flip is involved where the seller recently acquired the property at a lower price, Findings may add conditions to review the chain of title and sales history. Appraisals in fast moving pockets of Ft. Lauderdale sometimes come in below contract price. When that occurs, your lender can re run DU with the appraised value so that the Findings reflect the updated risk and cash to close.

Ft. Lauderdale Condo and HOA Nuances

Condos are common in the Ft. Lauderdale skyline, and DU Findings intersect with the condo project review process. In addition to unit level underwriting, the lender must approve the project itself. DU will note when a limited review is possible or when a full review is required. The project review examines the budget, percentage of owner occupancy, insurance coverage, and any pending litigation or special assessments. In Broward County’s coastal buildings, wind coverage, flood coverage, and master policy deductibles are critical. If a building has a material deficiency that violates agency requirements, DU may still show Approve Eligible for the borrower while the project itself fails. That is why your lender requests condo questionnaires, master insurance certificates, and association documents early in the process.

Occupancy Types and DU

DU treats primary residences, second homes, and investment properties differently. A primary residence usually benefits from the most flexible down payment and reserve structure. Second homes require a stronger profile, and investment properties require the strongest. Findings will state when reserves are needed and whether rental income can be used to qualify. For investors who intend to rent a Broward property on a short term basis, DU messages may point the lender to verify lease terms, market rents, or restrictions in the condo documents or zoning rules. Being clear and accurate about occupancy from the start keeps DU aligned with your actual plan for the property and reduces last minute adjustments.

Loan Purpose and Product Settings

Your DU Findings change when you change the loan purpose or product. A purchase may show one reserve level and a refinance another. A rate and term refinance often has different risk signals than a cash out refinance where the balance increases to provide cash back. Fixed rate products and adjustable rate products also carry different risk weights. If you adjust the term from 30 years to 20 or 15, DU can respond favorably to the faster amortization, but the payment must still fit your debt to income ratio. Communicate with your loan officer before you change purpose or product. A quick re run of DU after a change keeps the Findings current and the disclosures accurate.

PMI and DU

On many conventional loans with less than 20 percent down, private mortgage insurance is required. DU incorporates mortgage insurance into the risk analysis and will show messages that align the MI coverage level with agency rules. Your lender can price borrower paid or lender paid mortgage insurance and then re run DU with the selected option. If you intend to remove MI later, DU does not eliminate it at closing simply because you plan to prepay principal, but strong early amortization can help you reach standard cancellation milestones sooner. For buyers targeting a fast cancellation, coordinate with your lender on down payment strategy, appraisal expectations, and MI type before finalizing the application so that DU reflects the optimal structure.

When DU Says Refer or Adds Tough Conditions

A Refer With Caution result is not the end of the road. It is a signal that something in the current data is outside the automated tolerance. Common causes include high debt to income ratios, limited credit depth, recent late payments, large recent cash deposits without a clear paper trail, or complex self employment patterns. Your loan team can often improve the result by paying down revolving debt to reduce utilization, documenting deposits, or clarifying income history. In some cases DU remains conservative even after improvements. Lenders can then consider a manual underwrite within guidelines or run Freddie Mac’s system as a second look to see if the risk view differs. Clear, timely documentation is the antidote to most Refer outcomes.

Re runs and Timing

Any meaningful change should trigger a new DU run before closing. Locking your rate, updating the appraisal value, changing the product, adjusting down payment, or adding a borrower can all alter Findings. Most lenders will refresh DU at conditional approval, again after appraisal, and once more just before issuing the final clear to close. That final run aligns data with the Closing Disclosure and prevents last minute surprises. If you are shopping for a condo in Ft. Lauderdale, ask your loan officer to re run DU when you go from a single family target to a condo under contract. The project review items will populate so you can start collecting documents from the association quickly.

Local SEO: Ft. Lauderdale Specific Realities

Broward County property taxes have defined payment windows that affect escrow projections. Bills are mailed around November 1 each year, discounts apply for early payments in the following months, and taxes become delinquent on April 1. If DU leads you to a refinance structure that resets escrows, your cash to close will include initial deposits to build the tax and insurance cushions. Coastal insurance is another local lever. Wind coverage and flood coverage, when required, influence the escrow line and can also generate DU messages about documentation of policies. Neighborhood mix matters too. Downtown and beachfront condos rely on association master policies, townhomes may mix master and unit policies, and single family homes vary widely by roof age and wind mitigation features. Plan for this variation so that your DU run and your insurance quotes tell the same story.

Investor Focus in Ft. Lauderdale

Investors use DU to pressure test portfolio acquisitions and refinances. Findings will note reserve requirements based on the number of financed properties and the occupancy type. Lenders often ask for lease agreements or market rent reports to support rental income. If you are executing a 1031 exchange, make sure your documentation connects the dots from sale proceeds to purchase funds so that asset sourcing messages are easy to clear. If DU remains conservative due to property count or credit layering, your loan officer can compare rate and term versus cash out options, adjust MI structures on purchases with less than 20 percent down, or look at different terms to improve the debt to income ratio. DU becomes a planning tool when you iterate rather than a verdict you receive once.

First Time Buyer Perspective

First time buyers in Ft. Lauderdale benefit from reading Findings alongside their loan officer on day one. Approve Eligible is encouraging, but it still lists specific documents. Gather pay stubs, W 2s, bank statements, and any gift documentation early. Avoid opening new credit, moving large sums without a paper trail, or changing jobs mid process unless you have discussed it with your lender. If DU shows reserves, include that target in your savings plan so there are no last minute surprises. Buyers considering condos should also ask for the condo questionnaire and master insurance early, since project review can influence timing even when the borrower side of DU is strong.

Refinancers in Broward County

When you refinance, DU recalculates risk with current balances, income, and credit data. A rate and term refinance may reduce your payment without changing your cash position much, while a cash out refinance adds proceeds and can tighten risk factors. If your goal is to remove private mortgage insurance, your lender can order a new appraisal and re run DU with the updated value to see if MI can be waived on the new loan. Escrows will usually reset at refinance, so plan for prepaid interest, tax deposits, and insurance funding at closing. Reviewing the Loan Estimate line by line keeps expectations aligned with DU messages and prevents last minute funding holds.

How Premier Mortgage Associates Uses DU Findings

Our team runs DU early, explains the message set in plain English, and turns it into a clean document list. For Ft. Lauderdale condos we coordinate with your HOA or management company to collect the budget, insurance certificates, and any special assessment disclosures before they can slow down underwriting. We also model MI options and payment scenarios side by side using the Premier Mortgage Associates Mortgage Calculator so you can choose the structure that fits your goals. Start your modeling here: https://www.premiermtg.com/calculators/ and visit our Home Page at https://www.premiermtg.com/ to request a DU driven pre approval or a refinance review.

FAQ for Ft. Lauderdale DU Findings

Why did I get Approve Eligible but still have conditions DU validates risk, but documents still need to prove the data. Conditions are the proof list.
Can DU accept bonus or commission income with limited history Usually not. DU expects a history long enough to establish stability and a reasonable average.
What if my condo has a pending special assessment Your lender will review association documents and budgets. DU may allow the loan, but the project review must approve the building.
Do I need reserves if DU does not list them If DU does not require reserves, most lenders will not add them unless an overlay is in place, but cash buffers always help.
How often should we re run DU during my home search Re run when terms change, when you go under contract, after appraisal, and before final approval so that Findings match the file that will close.