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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.

Receiving HVE Results Through Loan Prospector

Enter the property address in Loan Prospector for the transaction to receive the HVE point value estimate. 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. You’ll also receive information on the difference between the HVE point value estimate and property value submitted.

The following data elements will be provided:

The HVE variance, measured 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.

When the data is available the HVE point value estimate will be returned for the following:

  • Conventional, conforming and super conforming loan transactions.
  • 1- and 2-unit properties (single-family, condominium and townhouse property types), excluding manufactured housing.

Recommended Tips When Reviewing HVE Results

When reviewing the results on the Loan Prospector Feedback Certificate consider taking one or more of the following steps, which may include:

  • Greater than 20 percent HVE variance - If the HVE variance returned for a loan exceeds 20 percent and the excessive value message (Y6) is returned you should:
    • Escalate the appraisal for additional review by a senior underwriter or in-house appraiser, if available.
    • Obtain a review appraisal, or a second appraisal from another appraiser and reconcile two appraisals.
    • Reject the subject appraisal if you determine that the appraisal is unacceptable.
  • 20 percent or less HVE variance - If the HVE variance returned for the loan is 20 percent or less, you should perform your regular best practices for the appraisal review process.
  • No HVE point value estimate - If no HVE point value estimate is available for the subject property, you should perform your regular best practices for the appraisal review process.

Additional Guidance About Using the HVE Point Value Estimate in Loan Prospector

The HVE point value estimates 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. Because the data provided by HVE and other AVMs are estimates, expect to see a difference between the HVE point value estimate and the appraisal value.

Here is important information to keep in mind on how the HVE point value estimate is used and calculated:

  • Loan Prospector will calculate the difference between the HVE point value estimate and the submitted property value. Loan Prospector will compare the borrower's estimated value with the HVE point value estimate until an appraised value is submitted. Upon submission of an appraised value, Loan Prospector will then use the appraised value in the variance calculation and ignore the borrower's estimate value.
  • Loan Prospector will always compare the purchase price with the value used (either the estimated value or the appraised value). Whenever the purchase price is lower, Loan Prospector will use the purchase price to perform the calculation.
  • When the HVE variance is greater than 20 percent, you will receive a feedback message (Y6) indicating that the estimated/appraised value or purchase price may be excessive and warrants additional review of the appraisal information.
  • You should not share the HVE point value estimate from the Loan Prospector Feedback Certificate with the appraiser of the subject property. All HVE data must be treated as strictly confidential to maintain appraiser independence. For more information on the terms and conditions of HVE, refer to Guide Exhibits 32 and 44.3(a).

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 and updated upon each resubmission, including pipeline loans.
  • 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.

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