© 2022 Fannie Mae. Trademarks of Fannie Mae.

Fannie Mae Refinance Application-Level Index (RALI): Methodology

Summary

The Fannie Mae Refinance Application-Level Index (RALI) is a weekly index of refinance application activity 

based on incoming data to Fannie Mae’s proprietary Desktop Underwriter® (DU®) application engine.1

Fannie Mae created the RALI to provide sharper insights around future prepayments to the mortgage 

markets and to improve transparency into the overall size of the refinance mortgage market. The index 

leverages DU loan application data to provide market participants with near real-time insights into the 

direction and scope of market refinance and prepayment activity, by leveraging actual incoming data from

refinance applications. The RALI leverages DU’s broad market footprint and provides a real-time and 

historical view of refinance application activity. DU was the most widely used underwriting engine based 

on Home Mortgage Disclosure Act (HMDA) data from 2018 through 2020.2 This additional transparency

into market-wide, real-time refinance and prepayment trends can potentially support more accurate 

tracking, modeling, and planning by mortgage market participants.

Index Methodology

In creating the index, DU applications (or casefiles) are first filtered to include only refinance applications3

that could result in prepayments of existing loans and future refinances. We apply the following filters: 1) 

include only applications for refinance of existing mortgages; 2) include only applications that meet DU’s 

underwriting criteria (e.g., loans that are approved and eligible for delivery to Fannie Mae, as well as loans 

that are approved but ineligible for delivery to Fannie Mae because they have balances in excess of local 

conforming loan limits); 3) include only first liens; 4) exclude test cases that do not represent actual 

queries for refinance credit; 5) exclude duplicate applications of the same borrower with the same lender4; 

and 6) include only refinance applications created in the defined week that meet the rest of the above 

criteria.5

The week of application activity starts at 12:00 a.m. Eastern Time (ET) the Saturday of that week and lasts 

through 11:59 p.m. ET the following Friday. We sum all refinance applications that meet our criteria for 

each week and create summed values of requested loan origination amount (unpaid principal balance or 

UPB) and summed values of loan counts. We created a weekly series for data beginning with 2004, at 

which time the DU data is deemed reliable for RALI purposes and apply the same filters to the historical 

data as to the real-time data so that weekly releases come from the same data-generation process as the 

1

For additional background material on RALI, including historical time series of the data, Perspectives blog, and 

FAQs, please visit our Research & Insights page.

2 HMDA only began including the underwriting system information in 2018, so corresponding data prior to 2018 is 

not available.

3 Because the RALI includes withdrawn or denied applications, users should follow standard methodology by 

considering potential changes in the “pull-through” rate, or the percentage of applications that result in origination 

and prepayment, to arrive at the appropriate estimate of refinance and prepayment volumes.

4

For purposes of consistency across the historical time series and comparability with lender-based based survey 

methodologies (e.g., Mortgage Banker Association’s weekly application index), we do not exclude duplicates 

involving the same borrower with applications at multiple lenders.

5 Please note that applications representing pre-qualifications are implicitly excluded as a part of this filtering 

approach.
© 2022 Fannie Mae. Trademarks of Fannie Mae.

historical series. This is a critical requirement for consumers of the RALI to be able to use the product in 

their own analytic and modeling processes.

The data are then adjusted to an index of RALI ($), based on UPB, and RALI (count), based on loan count, 

with the index from the first week of 2004 (ending January 9) equaling 100, with proportional adjustments 

to the entire respective weekly values for both indices. Creating the indices this way allows users to track 

growth rates of loan counts and UPB but not identify the actual underlying values. The interpretation of 

the index is thus relative to the value observed in the first week of January 2004. For instance, a RALI loan 

count value of 120 can be interpreted as having loan application counts that are 20 percent higher for the 

observed week relative to what was observed in the first week of January 2004. The complete weekly 

indexed series dating back to January 2004 for count and UPB will be provided to the market and 

appended with weekly releases. As small adjustments may be necessary to correct the data over time, we 

plan to refresh the historical weekly time series on an annual basis and notify users through our website 

to ensure transparency and clarity.

The RALI is published to the public each Tuesday morning, except when Monday or Tuesday is a holiday,

for the week ending the previous Friday. In the event of a holiday occurring on a Monday or Tuesday, the 

index will be published on Wednesday for that week. Consistent with industry practice, we label the 

weekly index by the date the week ends (i.e., the corresponding Friday). For instance, the index values 

created for data captured between March 19 and March 25 would be labeled as March 25 and referred 

to as “the index for the week ending March 25.” The underlying data used in creation of the RALI is a direct 

reflection of what is observed in Fannie Mae’s DU environment, and because of this no adjustments are 

made for holidays or for seasonality, although our commentaries will note when the RALI is impacted by 

a holiday.