Home Value Explorer Point Value Estimate Results in Loan Prospector
To help you review appraisal results early in the origination process, Loan Prospector provides a point value estimate for the property address from Home Value Explorer® (HVE®), Freddie Mac's automated valuation model (AVM).
This free service can help you more easily identify potentially inflated appraisal values that may need additional review early in the origination process. The HVE point value estimate should be used to identify which appraisals may need additional review.
When Freddie Mac has a point value estimate for the property, Loan Prospector will return the HVE information in the feedback certificate for the following types of loan transactions:
- Conventional, conforming and super conforming loan transactions.
- 1- and 2-unit properties (single-family, condominium and townhouse property types), excluding manufactured housing.
Receiving HVE Results Through Loan Prospector
The HVE results are informational and have no impact on the risk class assessed. You will receive the HVE point value estimate when assessing new loans and on resubmissions in Loan Prospector. The HVE value is an estimate of the property value so you should expect to see a difference between the HVE point value estimate and the appraisal value.
Loan Prospector will return the HVE point value estimate on the Loan Prospector Feedback Certificate, along with additional related feedback data elements that provide information on the accuracy of the HVE results.
The following data elements will be provided:
The HVE variance, measured as a percentage, is the difference between the HVE point value estimate and the submitted property value. The HVE variance is calculated as follows:
|(Lesser of appraised value/estimated value or purchase price) – HVE point value estimate
Lesser of appraised/estimated value or purchase price
|= HVE Variance %|
Note: A negative HVE variance indicates that the HVE point value estimate is higher than the appraised/estimated value or purchase price.
Using HVE Feedback in the Appraisal Underwriting Process
A careful evaluation of each appraisal is a key component of an effective appraisal management process. The HVE results provide you with information that makes it easier for you to identify the appraisals that may require additional information. Be sure to review our updated guidance to help you understand how to use the HVE feedback information during the appraisal underwriting process to:
- Review the HVE variance
- Assess property condition and marketability
- Evaluate local market trends and conditions
- Determine model accuracy by reviewing the confidence level and FSD
- Establish escalation criteria for additional appraisal evaluation based on the HVE variance
Resubmissions Using the HVE Point Value Estimate
If you resubmit a transaction, keep in mind the following:
- The HVE point value estimate, FSD, confidence score and HVE variance will be included on the Loan Prospector Feedback Certificate.
- The HVE database is updated monthly. As a result, the HVE point value estimate may change after resubmission if the HVE data has been updated. The HVE variance may also change if the HVE point value estimate changes.
- The HVE variance may change when the appraisal value is initially submitted because the appraised value will be used in place of the estimated value in the calculation of the HVE variance. Any subsequent changes to the appraisal value will result in the HVE variance being recalculated.
For More Information:
Check out the
- HVE Point Value Estimate Results in Loan Prospector fact sheet
- Home Value Explorer Web page
- Home Value Explorer Fact sheet
- Review appraisal best practices guidance outlined in Single-Family Seller/Servicer Guide Bulletin 2009-18 issued July 10, 2009