On May 29, 2015, Freddie Mac has stated that, beginning June 1, 2015, the use of Loan Prospector will be free for all new loan submissions. Loan Prospector is Freddie Mac’s automated underwriting system which provides feedback to lenders on loan eligibility as well as minimum documentation requirements for underwriting the loan transaction.
Fannie Mae rolled out its Collateral Underwriter (CU) appraisal risk assessment tool for approved lenders on January 26, 2015. CU provides lenders with a risk score, flags and messages upon submission of an appraisal report through Fannie Mae’s Uniform Collateral Data Portal (UCDP). For an in-depth appraisal report analysis, the full CU application is available to Fannie Mae Sellers via a web-based user interface. Best of all – the use of CU is free to Fannie Mae Sellers and Non-seller correspondents.
In order to obtain FHA mortgage insurance on a condominium unit – the condominium project in which the condo unit is located must be on HUD/FHA’s listing of approved condo projects. In this regard, HUD has published detailed instructions and documentation requirements for lenders (refer to ML 2009-46 B) on how to go about obtaining HUD/FHA project approval. Unlike Fannie Mae, HUD does not charge entities for their review and approval of condo project application packages. This service continues to be free of charge to all applicants.
Veterans Administration (VA)
Probably the best bargain of all for prospective homebuyers is the 100% financing offered by the VA for eligible Veterans or their surviving spouses (provided they do not remarry). In fact, the VA allows its VA funding fee to also be included in the loan amount. This essentially allows Veterans to purchase properties free of any minimum required investment.
Let’s hope that these policies and services remain free going forward.