Run with Opportunity
Don't miss a homeownership opportunity. Top ways to clear Cautions in Loan Product Advisor® (LPA®).
Getting a Caution risk class in Loan Product Advisor is not rejection. It’s a redirection to uncover missed opportunities that are more tailored for your borrower. Check back frequently for updated tips and resources.
Feedback, Evolved
A redesigned feedback certificate helps speed up your intake of essential information -- giving you more opportunities to make home possible.
Updates include:
- Prioritizing actionable information first and reducing white space
- Updating labels to align with industry terms
- Standardizing feedback messages to improve readability
- Additional enhancements coming soon
Note: Adoption of LPA specification v6.0 is required to take advantage of these updates.
Better Prepare Your Borrower with Early Insights
Have a borrower interested in buying a home but isn’t ready to complete a full loan application? LPA check helps provide an early look into whether a loan may receive an “Accept” risk class and appraisal waiver eligibility with the fewest data points required.
Loan Status
Make sure the loan has a “Prequalification” status in LPA.
Guidance for Next Steps
If an Accept risk class is received, proceed with confidence knowing you have an early view of all your borrower’s options, including whether they may qualify for an appraisal waiver.
If a Caution risk class is received, look for LPA ChoiceSM messages to help identify areas where you may be able to provide information to turn the Caution risk class into an Accept risk class.
How This Helps Get to Accept
LPA check gives an early indication of whether the loan may receive an Accept risk class for conventional purchases, refinances and ARMs.
Please note that a full LPA submission is still required before delivering the loan to Freddie Mac.
Identify R&W Relief Eligibility Faster
A new indicator shield helps you determine right away whether a loan is eligible for employment representation and warranty (R&W) relief. New corresponding loan-level messages will also indicate eligibility.
Locate the Shield
Look in the Representation & Warranty Relief section of the feedback certificate for a new indicator shield noting that the loan is eligible for employment R&W relief.
Guidance for Next Steps
Check the feedback certificate to see if your borrower is eligible for any additional R&W relief. Additional opportunities include collateral, income and asset.
How This Helps Get to Accept
R&W relief helps lenders streamline the underwriting process and close with confidence.
Getting to Accept Just Got Easier
LPA ChoiceSM: feedback messages that provide unprecedented, actionable information, giving you opportunities to make faster, more informed decisions to turn Cautions to Accepts. Messages offer dynamic data points for DTI, LTV and reserves.
Locate the Message Code
Look in the Credit and Liabilities section for messages FCL0434, FCL0435 and/or FCL0436 that provide the specific additional qualifying income, down payment or reserves required.
Guidance for Next Steps
Help the borrower fulfill the requirement and ask them:
- Have they disclosed all income sources?
- Are there any gifts, grants or additional cash they can put towards the down payment?
- Have they disclosed all their available reserves?
How This Helps Get to Accept
Lowering the DTI, LTV/TLTV or adding additional reserves may help you meet underwriting guidelines.
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Ensure All Reserves Are Reported
You get an LPA Choice Caution message stating that submitting additional qualifying assets can help get the loan to Accept.
Locate the Message Code - Look in the Credit and Liabilities section for message FCL0436 that provides the specific amount of reserves required.
Guidance for Next Steps - Questions to consider:
- Have they disclosed all their available reserves (e.g., investments, retirement, securities, joint accounts, eligible gifts, etc.)?
How this Helps Get to Accept - Adding additional reserves may help you meet underwriting guidelines.
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Find the Key to a Lower LTV
You get an LPA Choice Caution message stating that lowering the loan amount with additional down payment can help lower the loan-to-value/total loan-to-value (LTV/TLTV). See if your borrower can increase their down payment to get the loan to Accept.
Locate the Message Code - Look in the Credit and Liabilities section for message FCL0435 that provides you the specific additional down payment requirement.
Guidance for Next Steps - Questions to consider:
- Are there any gifts, grants or additional cash they can put towards the down payment?
- Are there any down payment assistance programs they could qualify for? DPA One® can help identify available programs.
How this Helps Get to Accept - Lowering the LTV/TLTV may help you meet underwriting guidelines.
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Account for All Streams of Income
You get an LPA Choice Caution message stating that adding qualifying income can help lower the debt-to-income (DTI) ratio. Check with your borrower to see if they have additional income to submit to get the loan to Accept.
Locate the Message Code - Look in the Credit and Liabilities section for message FCL0434 that provides you the specific additional qualifying income requirements.
Guidance for Next Steps - Questions to consider:
- Have they disclosed all income sources? Don't forget about other income sources like bonuses, alimony, child support, retirement benefits, pensions, etc.
- Are they able to add a co-borrower?
- Are they able to reduce/payoff any current debts?
How this Helps Get to Accept - Lowering the DTI may help you meet underwriting guidelines.
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No Credit Score? No Problem
To help expand access to credit for more qualified borrowers, we’ve enhanced LPA to no longer require a credit score for LPA to consider the borrower’s cash flow in the credit risk assessment. LPA can automatically assess your submission for positive cash flow with just the asset verification report and potentially turn a Caution to an Accept.
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Boost Access to Credit with Rent Payment History
You get a feedback message associated with a Caution based on LPA’s credit risk assessment using traditional credit reporting for your first-time homebuyer. Check if the borrower’s rent payment history qualifies to be used in the risk assessment.
Locate the Message Code - Look in the credit section for message FCL0421, which indicates if the loan may benefit from a positive rent payment history.
Guidance for Next Steps - Order an asset verification report and submit the loan to LPA – be sure to include the reference number with your submission.
How this Helps Get to Accept - Leveraging the rent payment history can only positively impact the risk assessment.
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Keep Your Eyes On AMI
Don’t let the numbers hold you up. The feedback certificate automatically shows you the area median income (AMI) and the borrower’s total qualifying income as a percentage of AMI to help identify more affordable loan opportunities.
Locate the Message Code - Use the feedback certificate’s Affordable Product Information section or identify message FAL0011 to get the AMI and the borrower’s total qualifying income as a percentage of AMI (AMI%).
Guidance for Next Steps - Use the AMI% to see if the loan is eligible for an affordable program and resubmit.
How this Helps Get to Accept - Qualifying for an affordable program provides more affordable opportunities for the loan, increasing the likelihood of acceptance.
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Factor in Caution Details
Got a Caution? Not a problem. LPA’s Caution messages provide opportunity. Address these messages first and use the messages’ primary factor flagging, now with additional details and supplementary loan data to quickly identify reasons for the Caution risk class.
Locate the Message Code - Look in the Credit and Liabilities Messages section of the feedback certificate. Caution message codes begin with “FCL” and the text begins with “Caution Factor” to indicate the Caution reason.
Guidance for Next Steps - Use the information in primary factor (reason) flagging, additional details and any supplementary loan data in the messages to edit the loan submission.
How this Helps Get to Accept - By understanding the reasons for the Caution, you may not need to abandon the loan or restructure it. This information can help you quickly work to remediate potential blockers for an Accept.
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Match Your Clients to an Affordable 3% Down Payment Solution
In today’s market, homebuyers are shopping for a lender that can provide them with low down payment offerings. The Freddie Mac Home Possible® mortgage offers unique flexibility and a low, 3% down payment option.
Locate the Message Code - Identify message FAL0037 which indicates the loan meets Home Possible income limits.
Guidance for Next Steps - Resubmit the loan with the Home Possible loan program identifier in LPA or your loan origination system.
How this Helps Get to Accept - Utilizing Home Possible’s credit fee cap and MI coverage levels can lower your client’s DTI, increasing the likelihood of acceptance.
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Go with the Borrower Cash Flow
You get a feedback message associated with a Caution based on LPA’s credit risk assessment using traditional credit reporting. Check if the borrower’s cash flow qualifies to be used in the risk assessment.
Locate the Message Code - Look in the credit section for message FCL0421, which indicates if the loan may benefit from a positive cash flow.
Guidance for Next Steps - Order an asset verification report and submit the loan to LPA – be sure to include the reference number with your submission.
How this Helps Get to Accept - Leveraging the cash flow assessment can only positively impact the risk assessment.
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Tip the Scales to Lower DTI
You get a feedback message (PUR0020) associated with a Caution that indicates the debt-to-income (DTI) ratio is too high. Check if reserves could help lead the way home.
Locate the Message Code - Look for message FAR0083 on additional reserves.
Guidance for Next Steps - Enter all asset accounts for the borrower. Include retirement accounts (IRA, 401k).
How this Helps Get to Accept - Reserves may not be required on every loan, but they could help strengthen loan quality.
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Expand Credit Opportunities with ECO® Data and Insights
Uncover more opportunities for an Accept and expand credit for your borrower. Use the Expanding Credit Opportunities dashboard in ECO to help identify your LPA submissions that could benefit from the borrower’s positive cash flow or rent payment history.