Freddie Mac’s ACE+ PDR: How to originate refinance loans without an appraisal
In July 2022, Freddie Mac launched its ACE+ PDR solution. This inspection-based appraisal waiver program allows lenders to originate certain Freddie Mac-eligible cash-out and rate and term refinance mortgage loans without an appraisal. Read on to discover where Freddie Mac’s ACE+ PDR fits into appraisal modernization, why it’s important to our industry, and how lenders can take advantage of this new solution.
What is ACE+ PDR?
ACE+ PDR is Freddie Mac’s automated collateral evaluation (ACE) coupled with a property data report (PDR).
ACE leverages Freddie Mac’s proprietary models along with historical data and public records to allow lenders to originate certain Freddie Mac-eligible loans without a traditional appraisal.
The PDR is collected at the property by trained data collectors who may be non-appraisers, appraisers, or appraiser trainees. Data collectors must meet certain requirements and have the appropriate qualifications. Upon receipt of the ACE+ PDR offer from Loan Product Advisor® (LPASM), a PDR can be performed for cash-out and certain rate and term refinance loans in lieu of an appraisal.
If the PDR was completed with required repairs noted, and repairs were made, the lender must obtain a Completion Report that verifies the repairs or alterations have been completed.
In some cases, upgrading to a hybrid appraisal (Freddie Mac Form 70H) or traditional appraisal may be necessary.
Why should lenders take advantage of ACE+ PDR?
ACE+ PDR saves lenders time. The PDR, collected on-site by a trained data collector in accordance with Freddie Mac requirements in lieu of an appraisal, typically takes only three days to complete.
This solution increases underwriting efficiency and reduces the time to closing with shorter valuation times. It can potentially save borrowers money with lower costs than a traditional appraisal.
How does ACE+ PDR work?
The ACE+ PDR process varies depending on the condition of the subject property. If the PDR does not identify any risky property features, the process is complete. In cases when a PDR requires repairs and the lender proceeds with requesting repairs, a Completion Report verifies the repairs have been made.
In cases when the PDR requires a professional inspection to be performed, a licensed professional in that particular field, such as a plumber or pest inspector, must perform the inspection. The lender then 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. In certain situations, the PDR may reveal that the property is not eligible for the offering or has certain characteristics or conditions that require upgrade to a hybrid appraisal (Freddie Mac Form 70H) or traditional appraisal.
ACE+ PDR is another step forward in appraisal modernization
The mortgage industry embarked on a massive digital evolution in property valuation to improve the consumer experience. Freddie Mac’s ACE+ PDR complements an array of modern appraisal methods, such as ACE appraisal waivers, Desktop Appraisals and Hybrid Appraisals.
How lenders can take advantage of ACE+ PDR
Clear Capital offers ClearInsight+™ and Hybrid Appraisal, a technology-enabled set of property valuation products to support ACE+ PDR implementation nationwide.
ClearInsight+ is a streamlined set of property valuation products – including PDR and Completion Report – to support ACE+ PDR implementation on a national scale. It is supported by Clear Capital’s network of more than 3,700 trained and background-checked real estate brokers and agents, plus our dedicated quality assurance and customer support teams.
Hybrid Appraisal uses a GSE appraisal form to deliver an opinion of value up to 50% faster than a traditional appraisal for certain purchase and refinance loans nationwide. Hybrid Appraisals submitted to the Uniform Collateral Data Portal® (UCDP®) are assessed by Loan Collateral Advisor® and the lender receives notification of the loan’s eligibility for collateral rep and warranty relief related to value.Clear
Clear Capital’s PDR
Our PDR is an efficient property data gathering service completed by our nationwide panel of trained real estate brokers and agents. Brokers and agents use our ClearInsight™ mobile app to collect property data, photos, a CubiCasa™ floor plan, and digital gross living area (GLA). All the property information is then reviewed for quality assurance and provided to the lender.
Our panel of more than 3,700 property data collectors has completed more than 235,000 data collections to support modern appraisal solutions. Our PDR to support ACE+ PDR is completed in three days on average – nearly a seven-day time savings compared to a traditional appraisal.
Clear Capital’s Completion Report
Once the PDR is completed – noting required repairs – the lender may request repairs. The lender also must obtain a completion report that verifies the repairs or alterations have been completed. Our trained real estate brokers and agents will collect data to verify if property repairs or alterations have been completed.
Clear Capital’s Hybrid Appraisal
In some cases (as defined by Freddie Mac), upgrading to a hybrid appraisal (Freddie Mac Form 70H) or traditional appraisal may be necessary. Our Hybrid Appraisal (Freddie Mac Form 70H) provides a trustworthy, accurate opinion of value up to 50% faster than a traditional appraisal. Since 2017, we’ve completed more than 235,000 hybrid and desktop appraisal orders. We have over 5,200 experienced appraisers onboarded to support the program.
Want to learn how you can take advantage of Freddie Mac’s ACE+ PDR solution with ClearInsight+ and our Hybrid Appraisal? Click here, or send us a note at sales@clearcapital.com. Our team is happy to walk you through the new program and answer any questions!
* Freddie Mac, ACE+ PDR. Loan product Advisor (LPA) are trademarks of Freddie Mac. All rights reserved.
