An automated underwrite occurs when a mortgage planner enters your application info into their loan origination system, pulls credit, etc. and then runs your particular lending scenario including pricing, loan size, closing costs, etc. thru a Fannie Mae underwriting engine. Results will come back with varying levels of approval and sometime a denial. Provided the info used to run the approval is accurate these results give the client a good idea on how to proceed with the loan structure they are seeking. These loans still have to be reviewed by an underwriter who will validate the info entered into the system and also clear other loan conditions-appraisal, title, etc.
A manual underwrite occurs when either the findings above or the particular loan program guidelines state the loan must be manually underwritten and approved by an physical underwriter. The underwriter will ensure your loan to value, debt to income, etc. meet the intended guidelines of the program.
Hope this help! Feel free to call with any questions.