ACE+ PDR FAQ

ACE (automated collateral evaluation) is our appraisal waiver offering and a PDR is a property data report. ACE+ PDR is an offering that allows lenders to originate eligible loans without an appraisal. With ACE+ PDR, additional property information is physically collected on-site by trained property data collectors using the Freddie Mac property dataset, in lieu of an appraisal.

Freddie Mac is committed to developing new collateral valuation options and to enhancing existing ones. Our goal is to purchase loans supported by the most credible and appropriate valuation methods available, to help mitigate risk associated with default. Including a PDR provides additional information about the condition of the subject property and allows lenders to continue to benefit from originating loans without an appraisal, while ensuring Freddie Mac purchases loans secured by properties in acceptable condition.

If a loan is eligible for ACE+ PDR it will be indicated in the Loan Product Advisor^® (LPA^®) feedback certificate under the Property and Appraisal Messages.

You may decide whom to use to collect the data for the PDR. The property data collector may be a non-appraiser, appraiser or appraiser trainee, but must meet certain requirements and have the appropriate qualifications (please refer to Guide Chapter 5603).

The property data collector may be an employee of the lender that is not a member of the lender’s loan production staff or another individual associated with the lender if the person is appropriately trained and meets the independence requirements in Guide Chapter 5603, including the Property Data Collector Independence Requirements (PDCIR).

A background check is required, but Freddie Mac does not provide specific requirements related to the background check. Lenders or their authorized third party must ensure the property data collector has passed a background check as documented in their procedures. Effective November 2, 2023, Freddie Mac is updating the background check requirement to clarify that criminal background checks must be ongoing and periodic.

Guide Section 3101.1 identifies the roles that must be screened against the Freddie Mac Exclusionary List. It’s recommended as a best practice that lenders also verify that property data collectors are not on that list.

The property data collection must be performed through an on-site interior and exterior physical data collection of the subject property.

Freddie Mac doesn’t require a specific form for the PDR. However, for mortgages with Application Received Dates on or after April 1, 2024, the PDR must be completed using the Uniform Property Dataset (UPD) and the PDF must be retained in the loan file.  The PDF must include:

• All required and conditionally required UPD data points
• All required photos
• The Limiting Conditions and Certifications
• A floor plan that meets the requirements in Section 5604.2(a)(ii)

The property data collector is the trained professional who was on-site at the property, performed the property data collection and completed the PDR.

The effective date of the PDR is the date the on-site property data collection was performed.

The effective date of the PDR must be on or before the Note Date of the loan.

If the effective date of the PDR (i.e., the date the property data is collected on-site) is more than 12 months prior to the Note Date of the loan, a new PDR must be obtained.

A PDR that was completed for a different lender may be used if the loan meets the ACE+ PDR requirements, the PDR was obtained in compliance with the Property Data Collector Independence Requirements (PDCIR) and the effective date of the PDR (i.e., the date the property data is collected on-site) is not more than 12 months prior to the Note Date of the loan. If the effective date of the PDR is more than 12 months prior to the Note Date, a new PDR must be obtained.

The lender must review the PDR and assess the information and photographs to determine whether the subject property meets Freddie Mac’s ACE+ PDR eligibility (e.g., not a 2-unit property, not a manufactured home, etc.) and the loan is eligible for sale to Freddie Mac (e.g., the subject property does not include multiple accessory dwelling units (ADUs), is not a commercial property, etc.). Additionally, the lender must confirm the property condition meets Freddie Mac’s property eligibility requirements. When the condition of the subject property meets the definition for condition rating C5 or C6 or the quality of the subject property meets the definition for quality rating Q6, the loan is not eligible for sale to Freddie Mac unless the deficiencies resulting in a C5, C6 or Q6 rating are remedied prior to delivery. Guide Exhibit 36, Condition and Quality Ratings and Level of Updating Definitions, provide condition rating definitions and quality rating definitions.

An appraisal is required when:

• The building status is “Proposed.”
• 0 bedrooms above grade and/or 0 bathrooms above grade.
• A measured finished area above grade of less than 400 square feet.
• The property is mixed-use (i.e., altered or modified specifically to support or facilitate any non-residential or income producing use).

If a PDR is completed for a Single-Family property that is later determined to be a condominium unit, the PDR must be updated to include the data elements that are specific to condominiums units.

When a lender accepts an ACE+ PDR offer, a condominium project review is still required to determine project eligibility.

A property data collector may complete a PDR and identify required repairs or require an inspection by a professional trained in the area of concern (i.e., roofing inspector, plumber, etc.) when the property data collector cannot determine whether repairs are needed. See Guide Section 5605.8 for requirements related to inspections and required repairs.

When a PDR is completed with required repairs, the lender must obtain either a PDR Completion Report or Form 400 (Warranty of Completion of Construction or Repairs/Alterations), or other substantially similar form, to verify the repairs or alterations have been completed. When using the PDR Completion Report, it must be prepared by a property data collector, unless the PDR is for a hybrid appraisal, in which case the appraiser may elect to complete either the Form 442 (Appraisal Update and/or Completion Report) or the PDR Completion Report. When using Form 400, it must be signed by the borrower(s) and include the required documentation to confirm completion of the repairs or alterations identified in the PDR.

When a PDR requires an inspection to be performed to identify whether repairs are needed, a professional licensed in that particular field (e.g., plumber, pest inspector, etc.) must perform the inspection. The lender must obtain either a signed report that states the repairs are not required or a signed report (or invoice) stating the repairs are completed and the issue has been corrected.

See Guide Section 5605.8 for complete documentation requirements.

The Form 442 cannot be used in lieu of the PDR Completion Report. The appraiser certifies on the Form 442 that they have inspected the subject property to determine whether the conditions or requirements stated in the original appraisal have been satisfied. Since no appraisal report is required in conjunction with an ACE+ PDR offer, the appraiser cannot review an appraisal to certify the conditions have been satisfied. For a hybrid appraisal, an appraiser may use the Form 442 in lieu of a PDR Completion Report when verifying that required repairs or alterations have been completed.

The date of the PDR Completion Report can be after the Note Date; however, the date of the PDR Completion Report must be prior to the Settlement Date of the loan.

A correspondent lender must review the completed PDR to ensure the property meets ACE+ PDR requirements, the loan is eligible for sale to Freddie Mac, any required repairs or inspections have been completed and the property meets Freddie Mac’s property eligibility requirements.

Freddie Mac’s Beyond ACE application programming interface (bACE API) provides feedback messaging to help lenders assess PDRs, make any necessary updates or changes and submit PDRs to Freddie Mac. PDRs for mortgages with Application Received Dates on or after April 1, 2024 must be submitted via the bACE API.

Items flagged by the bACE API as potentially needing repairs may not rise to the level of requiring a repair. The PDR reports observable data; the lender must assess the information and photographs in the PDR to determine whether the item meets Freddie Mac’s property condition eligibility requirements or requires repairs.

Our website has a list of appraisal management companies (AMCs) and collateral valuation partners that support the UPD and have integrated to bACE API. We will continue to update this list as we become aware of additional partners. Lenders must perform their own due diligence when reviewing and contracting with vendors.

Yes. The lender must assess the PDR content. Submission to the bACE API does not relieve the lender of its obligation to assess the information and photographs in the PDR to ensure the property meets ACE+ PDR eligibility requirements and the property meets Freddie Mac’s property eligibility requirements.

Freddie Mac and Fannie Mae (the GSEs) partnered to create the UPD. For Application Received Dates on or after April 1, 2024, use of the UPD is required.

The lender must include a targeted review of PDRs in its quality control program. As part of the quality control review, the lender must validate that the data submitted to LPA is accurate and the ACE+ PDR eligibility requirements are met.

For each ACE+ PDR loan delivered to Freddie Mac, the loan file must include a PDF report that uses the UPD and includes the required certifications, floor plan and photographs. The PDR must be retained in the loan file, even though the PDR is submitted to the bACE API. The PDR cannot be submitted to the Uniform Collateral Data Portal^® (UCDP^®).

Sellers must deliver the following Uniform Loan Delivery Dataset (ULDD) data points for ACE+ PDR loans:

• Property Structure Built Year (Sort ID 67) and leave blank or enter a valid value of “9999.”
• Property Valuation Method Type (Sort ID 89) and enter a valid value of “None.”
• Property Valuation Amount (Sort ID 83) and enter the “Borrower Estimated Value” that was provided in LPA for refinance loans or the “Purchase Price Amount” for purchase mortgages.
• Investor Collateral Program Identifier (Sort ID 376) and enter a valid value of “Property Data Collection.”

Lenders and TPOs must complete and submit to Freddie Mac the applicable form indicating that it has established a relationship with a given AMC or collateral valuation partner to submit PDRs to bACE API . The following forms are accessible through the Freddie Mac Access Request registration page.   

• Seller/Servicers: Click Seller/AMC Relationship
• Third Party Originators: Click TPO/AMC Relationship

Sellers must deliver the following ULDD data points for ACE+ PDR loans that have been upgraded to a hybrid appraisal:

• Property Valuation Method Type (Sort ID 89) - enter a valid value of “Other”
• Property Valuation Method Type Other Description (Sort ID 90) - enter “Hybrid Appraisal”
• Investor Feature Identifier (IFI) (Sort ID 368) - enter a valid value of “J44”

With each Texas Equity Section 50(a)(6) or Texas Section 50(f)(2) mortgage delivered to Freddie Mac, the Seller must also deliver an appraisal that meets both the Guide requirements applicable to appraisals and the requirements of the Texas Constitution. See Guide Section 4301.7.

If the lender has already received the PDR, an upgrade to a traditional appraisal (Form 70 or 465) may not be necessary. The lender has the option of using the PDR and upgrading to a hybrid appraisal (Form 70H or 465H).

The appraiser must ensure the information they present on the hybrid appraisal is accurate and credible. If the appraiser notes any areas of concern or inconsistencies, the appraiser is permitted to contact the property data collector to discuss and verify the information in the PDR. The appraiser may provide adjusted information on the hybrid appraisal based on their research. If the appraiser cannot reconcile the information sufficiently to produce a credible report, the lender must obtain an interior and exterior inspection appraisal (Form 70 or 465).

The appraiser must be geographically competent. More specifically, the appraiser must be able to certify that they have experience appraising the same type of property in the same market area.

Certification #11 on Form 70H and 465H states that the appraiser has knowledge and experience in appraising the specified property type in the specified market. If the appraiser has not previously performed appraisal services in the area in which the subject property is located, the appraiser may not complete the assignment. This requirement applies to all appraisals performed on loans sold to Freddie Mac.

Please refer to Guide Section 5604.2 for additional requirements pertaining to hybrid appraisals.

The effective date on Form 70H or 465H is the date the appraiser developed their opinion of value.

For a hybrid appraisal, the Seller may use Form 442 or Form 400 in lieu of a PDR Completion Report to verify required repairs or alterations have been completed. See Guide Section 5605.8 for documentation requirements.

If the lender has received a PDR and subsequently makes changes in LPA that cause the loan to lose ACE+ PDR eligibility when resubmitted to LPA, so long as the LPA property data type remains Single-Family or Condominium, the lender may use the PDR to obtain a hybrid appraisal.

After the PDR is submitted to the bACE API, a resubmission to LPA is required for the rep and warranty relief status to be displayed in Loan Selling Advisor^®.

The Seller must upgrade to a Uniform Residential Appraisal Report (traditional appraisal or hybrid appraisal).

The Seller may use the messages returned from the bACE API to aid their underwriting; however, the Seller must always review the PDR, including the photos, to independently determine whether and what repairs are needed to ensure the property meets Guide property eligibility requirements.

The Seller may use the messages returned from the bACE API to aid their underwriting; however, the Seller must always review the PDR, including the photos, to independently determine whether and what repairs are needed to ensure the property meets Guide property eligibility requirements.

The Seller must review the PDR to confirm the property meets Guide property eligibility requirements. If the Seller confirms the property has more than four units, as indicated by the message, the mortgage is not eligible for sale to Freddie Mac. If the indication is not accurate, an upgrade to a Uniform Residential Appraisal Report (traditional appraisal – 2- to 4-unit property) is required.

Question: [NEW June 12, 2024] What does the Seller need to do when the collateral rep and warranty relief message indicates the property has more than one accessory dwelling unit (ADU) and upon review of the PDR, the Seller confirms the property is in fact a single-family dwelling with only one ADU?

Answer: The PDR must be corrected and the Seller must resubmit the updated PDR to the bACE API to determine whether the loan is eligible for delivery to Freddie Mac using ACE+ PDR.

Question: [NEW June 12, 2024] What does the Seller need to do when the collateral rep and warranty relief message indicates the property has more than one ADU and upon review of the PDR, the Seller confirms the property does not have more than one ADU, but is a 2- to 4-unit property?

Answer: The Seller must review the PDR to confirm the property meets Guide property eligibility requirements; if the property is eligible, an upgrade to a Uniform Residential Appraisal Report (traditional Appraisal – 2- to 4-unit property) is required.

If a previously submitted PDR is revised, the Seller must submit the updated PDR to the bACE API.

Question: [NEW June 12, 2024] What should the Seller do if the collateral rep and warranty relief message in LPA, Loan Quality Advisor or Loan Selling Advisor states the PDR must be submitted to the bACE API even though the PDR has already been submitted to the bACE API?

Answer: If the rep and warranty message in LPA, Loan Quality Advisor or Loan Selling Advisor states the PDR must be submitted to the bACE API, this may be an indicator of a potential address mismatch. The Seller must ensure the property address identified on the PDR that was submitted to the bACE API is accurate and matches the Freddie Mac Gateway (LPA, Loan Quality Advisor, Loan Selling Advisor) property address and the Seller has received a complete submission status from the bACE API. If an address is incorrect please resubmit the corrected address to the appropriate tool or the bACE API, as applicable.

The Seller will know that a PDR has been submitted to bACE API based on the LPA returned messages identified here.

The PDR must be submitted to the bACE API prior to delivery of the loan.

For ACE+ PDR and hybrid appraisal-eligible loans, submitting the PDR prior to closing is encouraged so the Seller may use the bACE API feedback messages to aid in its PDR review process.

The PDR must be submitted to the bACE API prior to submission of the loan to Loan Quality Advisor for the rep and warranty relief status to be displayed in Loan Selling Advisor.

A property data identifier is a unique 36-character ID returned by Freddie Mac’s bACE API once a PDR is submitted to the bACE API. The bACE API returns a unique property data identifier for each bACE API submission.

The Seller should include the most recent property data identifier on each submission to LPA, as this provides an additional method for obtaining feedback messages related to collateral R&W relief for ACE+ PDR eligible loans.

The Seller must include in its LPA submission the property data identifier associated with the most recent bACE API submission.