ACE: A Free Appraisal Alternative for a Faster Close
October 5, 2017
Automated Collateral Evaluation (ACE) is a new free capability in Freddie Mac Loan Advisor Suite® that allows you to underwrite a loan without a traditional appraisal. It helps you get your borrowers to closing faster and − since there’s no appraisal fee − saves them money.
Here’s how it works: Submit your loan to Loan Product Advisor®, specifying an estimate of the value or the sales price for the mortgaged property. ACE’s proprietary automated valuation model determines the acceptability of the value (or sales price) as the basis for underwriting the loan, and uses available data − like existing appraisal data, Multiple Listing Service data, and public records − to assess the condition and marketability risks associated with the property.
Have ACE questions?
Refer to the ACE FAQs for answers related to:
- Eligible loans
- Delivery requirements
- Property value limits
- Correspondent lenders
- Impacts to appraisers
- Other topics
If the analysis determines the risk is acceptable, the Loan Product Advisor Feedback Certificate will indicate that the loan is eligible for ACE. That means you can originate the loan without an appraisal and you’re relieved of the representations and warranties related to the value, condition, and marketability of the property.
While ACE was originally only available for no cash-out refinances, we recently expanded eligibility to include purchase transactions. That means even more borrowers can benefit from ACE.
As of September 1, 2017, purchase loans can be submitted to Loan Product Advisor and assessed for ACE eligibility. Additionally, purchase loans that were submitted to Loan Product Advisor prior to September 1, 2017 can be resubmitted and assessed for ACE eligibility, but only if a traditional appraisal has not been obtained.
To take advantage of ACE, you need to use Loan Product Advisor 4.3 or higher. So submit your loans to Loan Product Advisor, find out if they’re eligible, and start passing on the benefits to your borrowers. If you don’t already have access to Loan Product Advisor, get started now.
Look for other enhancements to Loan Product Advisor coming soon.
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