Property Inspection Products - ACE+PDR and Value Acceptance + PDC explained

In mortgage industry, two innovative products have emerged to streamline property valuation processes: Freddie Mac's ACE+PDR and Fannie Mae's Value Acceptance + PDC. These products aim to enhance efficiency, reduce biases, and address the growing concern of appraiser capacity. Referred to as Inspection based waivers, these are inspections on properties for loans being underwritten by the GSEs. In this context, the loan

ACE+PDR: Streamlining Property Valuation with Freddie Mac

What is ACE+PDR?As a Property Data Collector for Freddie Mac, you will work with the ACE+PDR product, which combines an Automated Collateral Evaluation (ACE) appraisal waiver with a Property Data Report (PDR). This integration allows lenders to forego traditional appraisals for eligible loans by relying on data collected by trained professionals.

The Role of Property Data Collectors and AppraisersProperty Data Collectors gather detailed information about a property, which is then used to create the PDR. If additional analysis is needed beyond what the PDR can provide, a licensed appraiser may step in to complete a hybrid appraisal. This ensures that properties requiring more thorough evaluation receive the necessary attention while maintaining efficiency for standard cases​ (Home)​​ (Home)​.

Value Acceptance + PDC: Fannie Mae's Approach to Efficient Valuation

What is Value Acceptance + PDC?

‍Fannie Mae's Value Acceptance + Property Data Collection (PDC) product is designed to validate property descriptions and eligibility when a lender receives a value acceptance waiver. This process involves a comprehensive data collection effort to ensure accuracy and reliability.

Handling Eligibility and Hybrid Appraisals

‍If a loan loses eligibility for value acceptance due to changes in qualifying criteria, the collected PDC data can inform a hybrid appraisal, similar to Freddie Mac's ACE+PDR product. This approach helps maintain efficiency in the valuation process while ensuring properties are accurately assessed​ (Fannie Mae Selling Guide)​​ (Fannie Mae)​.

The Impact on the Mortgage Industry

Standardization and Consistency

‍Both Freddie Mac and Fannie Mae are Government-Sponsored Entities (GSEs) that purchase mortgages from lenders, providing liquidity to the mortgage market. They establish standards for mortgage underwriting and origination, creating consistency and uniformity in loan terms and conditions. This standardization is crucial for lenders who aim to sell their loans to these GSEs, ensuring they meet the required criteria​ (Fannie Mae)​​ (Fannie Mae)​​ (Link)​.

Addressing Appraiser Capacity Concerns

‍One of the significant advantages of these products is their ability to address the growing concern of appraiser capacity. By utilizing trained Property Data Collectors and integrating automated data with professional appraisals, these products help streamline the valuation process, reduce fulfillment timelines, and create more objective data​ (Link)​​ (Freddie Mac Learning Hub)​.

What does UPD or Universal Property Data refer to?

The two GES's have recently standardized the submission of these two products to a unified data standard. Providers and tech companies like Jaro, need to meet this standard to submit these reports. To learn more check out our blog on the UPD standard and what it means for the industry.

The introduction of ACE+PDR by Freddie Mac and Value Acceptance + PDC by Fannie Mae marks a significant step forward in modernizing property valuation. These products not only enhance efficiency and consistency but also help reduce biases and address the capacity issues within the appraiser community. Understanding and leveraging these innovative solutions can provide substantial benefits for both lenders and borrowers in the mortgage industry.

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