Frequently Asked Questions
AIM stands for asset and income modeler (AIM). It’s our solution for helping automate the manual processes of assessing borrower assets and income. AIM uses the expertise of third-party service providers to help reduce the burden of traditional documentation to simplify the loan origination process, drive efficiency and improve the lender and borrower’s experience.
AIM for self-employed income is Freddie Mac’s solution that leverages optical character recognition (OCR) technology through an integration with a service provider (LoanBeam) to help enable the automation of certain income calculations for self-employed borrowers.
LoanBeam simplifies the income calculation process from tax returns using OCR technology to supply qualifying income for self-employed borrowers. The software automatically reads and organizes borrower tax documents while eliminating transcription errors.
As the leader in automating qualifying income calculations, LoanBeam’s underlying OCR technology has been refined over 14 years and across millions of tax documents. Their OCR accuracy is near perfect as long as target data are in standard formats (for example, the technology can’t read notes in tax forms). This new technology, designed to automate and accelerate the income validation process, will help lenders better serve and more easily underwrite self-employed borrowers.
The following LOS vendors are currently integrated with LoanBeam.
- Black Knight Financial Services – Empower
- Ellie Mae, Inc.
- Mortgage Cadence
Other LOS vendors may also support AIM for self-employed if they are on Loan Product Advisor v4.8.01 and have the capability to pass the LoanBeam reference number. Contact your vendor technology integration representative for questions related to LOS vendors or if you need the Loan Product Advisor v4.8.01 specification.
Yes. It offers an opportunity for relief from enforcement of certain representation and warranty relief related to the accuracy of income and/or loss calculations.
The last Loan Product Advisor Feedback Certificate will indicate an income representation and warranty relief eligibility result of “Eligible.”
Please contact the following:
- If you’re not a customer yet, contact LoanBeam Sales at 855-544-2326, Ext. 3.
- If you’re already a customer, contact LoanBeam Support at 855-544-2326, Ext 1.
AIM for self-employed has been available as a limited release for a year. It became available broadly on March 6, 2019. Read our AIM for self-employed job aid for instructions on how to get started. Remember, you need to use Loan Product Advisor to benefit from this solution. If you’re not using it today, visit our Loan Product Advisor web page and follow the steps to get started.
You should be using Loan Product Advisor specification 4.8.01, as it contains the enumerations for our service-provider, LoanBeam. However, if you are using Loan Product Advisor specification 4.8, and add the enumerations, Loan Product Advisor will handle the request.
Yes. In Loan Product Advisor, you need to select the self-employed indicator and include the unique reference number issued in the Income Calculation Report (e.g., LoanBeam Excel workbook). For “Verification Type”, you will need to specify “Income” and for “Verification Company”, you will need to specify “LoanBeam”. Please read the AIM for self-employed job aid for detailed instructions.
Yes, Loan Product Advisor through the Loan Advisor portal supports submitting reference numbers.
A reference number is assigned by LoanBeam in an Excel workbook. It is located on the LoanBeam cover page in the Application Details field. The lender must submit the loan to Loan Product Advisor with the unique reference number. The reference number is in a specific format that Freddie Mac requires of all its vendor integration partners.
If you make changes to the workbook, there will still be only one reference number. Based on the reference number, Loan Product Advisor will pull the latest version of the workbook that you upload to LoanBeam. If you do not make changes to the workbook, Loan Product Advisor will use the original version generated by LoanBeam.
The loan must be delivered as a Loan Product Advisor loan with an LP AUS Key number.
Loan Product Advisor only accepts one LoanBeam reference number for the loan. The reference number relates to only one Form 1040 for each applicable calendar year and may be associated with up to two borrowers if they filed jointly.
The answer depends on whether you are accessing Loan Product Advisor through system-to-system (S2S) integration access or through the Loan Advisor portal.
If you use Loan Product Advisor S2S integration access, this will not cause a hard stop on the entire loan. Instead, the first LoanBeam reference number in the Loan Product Advisor loan file will be accepted while the other LoanBeam reference number, for other borrower(s), will be dropped from the file.
If you use the portal to access Loan Product Advisor, and you attempt to add a second LoanBeam reference number to any of the co-borrowers, you will receive a popup error when attempting to submit the loan. Clicking “OK” in the popup error, will clear the field and allow you to successfully submit the reference number, so long as there are no other issues with the submission.
Loan Product Advisor will not include the non-borrower income. Therefore, the lender should update the workbook and remove the income of the borrower not on the loan.
The cash flow/annual income begins with the same number, but the monthly income may differ based on income stability.
Note: If a business is excluded from the workbook (e.g., recently closed business), Loan Product Advisor will exclude the income from that business.
Visit LoanBeam’s training web page for more workbook resources and support.
The following sources of income/losses, as reflected on the borrower’s federal income tax returns filed with the Internal Revenue Service (“IRS”), are eligible:
- Sole Proprietorships reported on IRS Schedule C (Profit or Loss from Business)
- S Corporations reported on IRS Form 1120S (including compensation of officers reported on IRS Form W-2) and IRS Schedule K-1 (Form 1120S)
- Partnerships reported on IRS Form 1065 and IRS Schedule K-1 (Form 1065)
The following information from the tax returns are excluded:
- Wages, Salaries, Tips, etc. (1040 line 7) exclusive of self-employment wages from Partnership or S-Corporation
- Taxable and non-taxable interest (1040 line 8)
- Dividends (1040 line 9)
- Taxable refunds, credits and offsets (1040 line 10)
- Alimony (1040 line 11)
- Capital Gain/Loss (1040 line13)
- Other gains/losses (1040 line 14)
- IRA distributions (1040 line 15)
- Pensions/annuities (1040 line 16)
- Rental/Royalties (1040, line 17, Schedule E)
- Unemployment Compensation (1040, line 19)
- Social Security (1040, line 20)
- Other income (line 21)
- Farm Income
- Royalty Income
- Income from a Corporation (Form 1020, officer compensation on IRS Form W-2)
Yes. The following tax returns will be excluded:
- Tax returns filed using a fiscal year
- Hand written tax returns
- Amended returns
- Tax returns from a U.S. territory
- 2015 returns and earlier
The documentation requirements of Guide Topic 5300 apply, including, but not limited to, providing the borrower’s most recent complete federal income tax return(s) filed with the IRS, including all forms and schedules (refer to Section 5304.1(h)).
Why aren’t the regular Loan Product Advisor messages for self-employed borrowers showing up on the Feedback Certificate (e.g., verification of current business existence, tax return requirements based on years business in existence)?
The self-employed indicator must be selected in Loan Product Advisor to receive all the applicable self-employed feedback messages. Otherwise, the feedback messages will be incomplete.
When the borrower’s business has been in existence for less than five years, the borrower’s federal income tax returns must reflect at least two years of receipt of income and/or losses from the business.
If the borrower used different business names on the Schedule C in different years, LoanBeam will treat them as two different businesses. This means that it will appear as if there is only one year of tax returns for each of those businesses when submitting to Loan Product Advisor.
If this happens, you may contact LoanBeam support to request reprocessing of the tax returns as one business.
If, for any reason, the income calculation report is updated, or additional income documentation is provided, you must upload the updated report and/or income documentation to LoanBeam and resubmit the loan with the same reference number to Loan Product Advisor. Loan Product Advisor messages (e.g., borrower-level messages) will include the date and time of the workbook so you know which version was used.
After you make the manual correction in the workbook, upload the updated workbook to LoanBeam and resubmit the loan with the same reference number to Loan Product Advisor.
If you notice errors of this kind, please report them to LoanBeam support.