You have a few different threads going on this, but this is likely what the lender means. See below.
There are two ways that your FHA loan can be underwritten (approved).
The easiest way is to run your application through the 'Automated Underwriting' software that is now available through all major lenders. If your overall credit history and income are sufficient for 'automated' approval, then we will certainly make every attempt to run your loan through the automated software. Automated approval is preferred simply because it allows the lender to basically skip the traditional underwriting process. In other words, if we have automated approval, then the lender simply has to verify that the information we listed in your application is accurate.
However, the fact is that the vast majority of my clients do NOT have sufficient credit to be approved by the automated software, and therefore most of my FHA loans require "traditional underwriting" - also known as manual underwriting. Traditional underwriting simply is the way underwriters had to review files BEFORE we had computers .... and they are still doing exactly this same process for many FHA loan files to this day.