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Freddie Mac Home Valuations

If you recently applied for a home loan or are working with your lender to refinance or modify your existing mortgage, you may have received documentation that included a home value generated by Freddie Mac Home Value Explorer® (HVE)®. HVE is Freddie Mac's automated valuation model (AVM) tool that provides the estimated value of your home based on nearby sales in the area where your home is located. AVM tools like HVE are widely used in the mortgage industry to support and streamline the home valuation process.

Your lender is providing you with the HVE value, along with all other valuations developed in connection with your loan, to comply with a new consumer disclosure law. There is no action required on your behalf. We are providing this website to help you better understand the home value information that may be used by your lender.

We encourage you to visit our most frequently asked questions and glossary of terms, below, for more information.

Frequently Asked Questions

  1. How are Freddie Mac HVE values derived?
  2. How would my lender use the data from the HVE value?
  3. How does an HVE value differ from an appraisal and why do I need both?
  4. Why did I receive multiple, yet different, HVE values?
  5. Why did my lender give me multiple value reports on my home, in addition to the HVE value?
  6. How do I know which value the lender used when processing my loan?
  7. How do I know if the value provided to me is from Freddie Mac?
  8. What if I have questions about the HVE or BPO value?
  9. The HVE value I received has "Message Codes" noted. What do these mean?
  10. Can I request that my lender use the HVE value versus the appraisal's value?
  11. How does the quality of HVE values compare to other AVM values?
  12. How often is HVE data updated?
  1. How are Freddie Mac HVE values derived?

    HVE values are based on Freddie Mac's statistical model that assumes average marketability and condition of homes. The model consists of a database of approximately 82 million property records that cover all 50 states, the District of Columbia and more than 3,100 counties. HVE is consistently rated as a top automated valuation model (AVM) for the coverage, accuracy, and reliability it offers when providing estimated property values.

    The HVE value of your home may be accompanied by:

    • A Confidence Level and Forecast Standard Deviation. These statistical measures are provided to substantiate the accuracy of the HVE value. Visit our Glossary of Terms for more information.
    • A list of nearby sales. In some cases, you may find a list of homes that recently sold within one mile of your home. These recently sold properties are not comparables as an appraiser would use to justify his appraised value.
  2. How would my lender use the data from the HVE value?

    Lenders may use HVE values for a variety of reasons to guide them during the mortgage process. Most important, however, the HVE value may provide your lender with greater confidence in the accuracy of the appraisal and identify appraisals that may need further review.

    If you are working with your lender on a Home Affordable Refinance Program (HARP) refinance or a loan modification, they may use this HVE value to process the loan.

  3. How does an HVE value differ from an appraisal and why do I need both?

    The HVE value is not an appraisal prepared by a certified or licensed appraiser, nor is it intended to replace your appraisal. Rather, it is a tool intended to help your lender review your appraisal results early in the origination process and provide them with greater confidence in its accuracy. By having both an HVE value and an appraisal, you and your lender have added assurance regarding the value of your home.

    If you are working with your lender on a HARP refinance or a loan modification, your lender may use the HVE value to process the loan without the need for an appraisal.

  4. Why did I receive multiple, yet different, HVE values?

    Your lender may have obtained multiple HVE value reports during the origination process. Because we update the HVE data monthly to ensure high-quality values that reflect changing market conditions, it's possible that your lender may have pulled an HVE value when you initially submitted your loan application and another after the monthly HVE data update if a resubmission was needed.

  5. Why did my lender give me multiple value reports on my home, in addition to the HVE value?

    Your lender is giving you this information to comply with a new law that requires all appraisals and written valuations developed in connection with your loan be provided to you. This may include valuations from sources other than Freddie Mac, such as an appraiser, another automated valuation model (AVM) tool, or a Broker Price Opinion (BPO).

  6. How do I know which value the lender used when processing my loan?

    We encourage you to talk with your lender to gain more clarity on the information they used to process your loan.

  7. How do I know if the value provided to me is from Freddie Mac?

    Any HVE value should be identified as HVE on the disclosure form or report you receive. HVE is created and distributed only by Freddie Mac. Broker Price Opinions (BPOs) can also be obtained through Freddie Mac systems, but are created by professional real estate brokers and not from Freddie Mac.

  8. What if I have questions about the HVE or BPO value?
    • If you are applying for a new loan, the HVE value does not replace your appraisal. The HVE value is our automated valuation model (AVM) tool that is intended to help your lender process your loan with a greater sense of certainty. The value provided by the appraisal is what your lender will use when underwriting your loan, not the HVE value.

      If you would like more information on the HVE value and how it was assessed – or if you believe there is a significant issue with the HVE value – you can contact Freddie Mac at 1-800-FREDDIE and select Option #2.

    • If you are working with your lender on a HARP refinance, you can request an appraisal – through your lender – for added certainty. You will be responsible for all associated costs.

    • If you are working with your lender on a loan modification, we recommend you talk with your lender first to determine the value they used when processing your loan. If it was a value obtained from Freddie Mac, you may contact us at 1-800-FREDDIE and select Option #2.

    If you disagree with a valuation provided by other sources – such as your appraisal or another AVM – you will need to discuss this with your lender.

  9. The HVE value I received has "Message Codes" noted. What do these mean?

    Freddie Mac's tool used to assess the value of your home may provide "Message Codes," identified below, to further assist lenders during the underwriting process. For example, if your HVE value has a 'Y6' message code – Review for Accuracy – this may trigger your lender to review the appraisal again due to a significant difference between the appraisal and HVE values.

    The eight message codes include:

    Y0 – HVE Point Value
    Y1 – Forecast Standard Deviation
    Y2 – Confidence (Score) Level
    Y3 – No HVE Point Value Estimate description
    Y4 – HVE Point Value Estimate description
    Y5 – Percent Difference
    Y6 – Review for Accuracy
    U1– HVE Point Value Estimate description for HARP or Relief Refinance loans

    Visit our glossary of terms for more information.

  10. Can I request that my lender use the HVE value versus the appraisal's value?

    For most new loans, the answer is no. The HVE value is not intended to replace the appraisal of your home conducted by a certified or licensed appraiser. Rather, the HVE value may be used by your lender as a tool to support the quality and accuracy of your appraisal.

    If you are working with your lender on a HARP refinance or a loan modification, they may use the HVE value instead of an appraisal to expedite loan processing and cut the cost of obtaining a new appraisal.

  11. How does the quality of HVE values compare to other AVM values?

    HVE values are consistently rated among the top tools in the industry for accuracy and coverage through the results of Freddie Mac's participation in testing with third-party AVM testing companies and with large lenders. Freddie Mac uses the results of these tests to continue to improve the performance of the HVE tool. HVE is among the leading AVMs for overall geographic coverage in the United States.

  12. How often is HVE data updated?

    The HVE model is completely rebuilt each month to ensure high-quality, accurate valuations. Freddie Mac uses property data from its own portfolio of loans as well as from external data sources that capture repeat sales and tax assessment data.

Glossary of Terms

To help you better understand the HVE value, we're providing a list of commonly used terms.

Automated Valuation Model: A technology-driven tool that uses mathematical modeling to provide the estimated value of your home based on nearby sales in the area where your home is located.

Appraisal: A professional analysis, performed by a certified or licensed appraiser, used to estimate the value of your property. This includes examples of sales of similar properties.

Broker Price Opinion (BPO): An estimate of a property's fair market value as determined by a real estate professional.

Confidence (Score) Level: A measure providing information about the accuracy of an automated valuation model's value. Home Value Explorer (HVE) derives the confidence levels from the Forecast Standard Deviation and summarizes within high, medium, and low value ranges.

Date/Time Assessed: The date on which the Loan Prospector transaction was run and the HVE value generated from the HVE database.

Estimated Value of Property: The estimated or appraised value of the property provided by the lender.

Forecast Standard Deviation (FSD): A statistical measure of the accuracy of the HVE Point Value Estimate. The lower this number, the smaller the error in predicting actual market value.

Home Value Explorer (HVE): Freddie Mac's proprietary automated valuation model, which provides an estimate of property value.

HVE Excessive Value Message: The presence of the following message indicates an increased probability that the appraised value may be inflated: "Review for Accuracy: The Estimated Value of Property for this transaction may be excessive for the local market. The appraisal should be carefully reviewed for this transaction."

HVE Point Value Estimate: An estimate of property value based on a Freddie Mac statistical model that assumes average marketability and condition of the property.

Loan Prospector®: Freddie Mac's automated underwriting tool used by lenders to assess a loan's eligibility for sale to Freddie Mac.

Loan Prospector Key Number: The number Loan Prospector has assigned to your loan.

Percent Difference / HVE Variance: The difference between the Estimated Value of Property or Purchase Price provided by your lender and the HVE Point Value Estimate expressed as a percentage.

Purchase Price: The purchase price provided by the lender.

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