DU and LPA Affordable Loan Programs

Blend supports all affordable loan programs from Fannie Mae and Freddie Mac. Affordable loan types can be returned in the pricing results, but there are additional pieces of data that need to be passed to DU and LPA.

• Fannie Mae's Desktop Underwriter (DU) Program List
• Freddie Mac's Loan Product Advisor (LPA) Program List
• Updating the loan application manually for Affordable Loan Programs
  • DU Affordable Loan Programs
  • LPA Affordable Loan Programs
  • Required additional fields for LPA Affordable Loan Programs
  • LPA Loan-to-Value (LTV) Calculations for Affordable Loan Programs
• Loan Affordable Programs Configurability

Fannie Mae's Desktop Underwriter (DU) Program List

1. HFAPreferred
2. HFAPreferred Risk Sharing
3. HomeReady

Freddie Mac's Loan Product Advisor (LPA) Program List

1. CHOICEHome
2. CHOICERenovation
3. CommunityLandTrust
4. GreenCHOICE
5. HFAAdvantage
6. HeritageOne
7. HomePossibleMortgage
8. IncomeBasedDeedRestrictionsTerminate
9. IncomeBasedDeedRestrictionsSurvive
10. RefiPossible (Refis only)

Updating the loan application manually for Affordable Loan Programs

Lenders can specify if the product is an affordable loan, the GSE program type, and the loan program type.

DU Affordable Loan Programs

For DU, only one program can be selected at a time.

LPA Affordable Loan Programs

With LPA, multiple programs can be selected simultaneously, up to a maximum of 5. Once 5 programs have been selected in the dropdown menu, all other options will be disabled.

Required additional fields for LPA Affordable Loan Programs

Some conditional fields will be required depending on which program is selected.

GreenChoice - When GreenChoice is selected, the question Will finance energy-related improvements will be required. If the answer is Yes, the Energy Improvement Amount field is required.

IncomeBasedDeedRestrictionsTerminate and IncomeBasedDeedRestrictionsSurvive - When these programs are selected, the Months of deed restriction field is required.

CHOICERenovation - When CHOICERenovation is selected, the Alterations, Improvements, and Repairs field is required.

 Note: If both GreenChoice and CHOICERenovation are selected, include the sum of both energy improvements and alterations amounts in the Alterations, Improvements, and Repairs field.

LPA Loan-to-Value (LTV) Calculations for Affordable Loan Programs

LPA requires different LTV calculations for some of the loan programs.

1. In general, the "V" in LTV is the lesser of the appraised property value (estimated appraised value in Blend is also accepted) or the sum of the purchase price plus any improvements minus any seller concessions.
2. For GreenChoice, the calculation is Purchase Price + Energy Improvement Amount - Seller Concessions.
3. For ChoiceRenovation, the calculation is Purchase Price + Alterations Amount - Seller Concessions.
4. If both GreenChoice and ChoiceRenovation are selected, the calculation is Purchase Price + Alterations Amount + Energy Improvements Amount - Seller Concessions.
   However, LPA expects the sum of the alterations and energy improvements to be added together and entered only in the Alterations, Improvements, and Repairs field. This information will appear when the information icon is clicked on the Alterations, Improvements, and Repairs field.
   
5. If CommunityLandTrust is selected, then LPA uses the appraised property value. In Blend, this is the estimated property value. If this field is not filled out when this program is selected, then the LPA certificate will return an error.
6. When GreenChoice is not selected and the energy improvements amount is still filled in, LPA does not include the energy improvements amount in the LTV calculation. They only include the energy improvements amount if GreenChoice is selected.
7. DU follows different calculations than LPA. Specifically, DU does not include seller concessions and it does include the energy improvements amount regardless of the loan program chosen.
8. Given these complex calculations and the differences between DU and LPA, Blend matches DU LTV calculations in most cases and follows the LPA calculations when one of the affordable loan programs is chosen that has a different calculation methodology.
   For example, if seller concessions are filled in and no loan programs are selected, then the Blend LTV will match the DU LTV. If GreenChoice is selected, then Blend LTV will match the LPA LTV, which adds the energy improvement amounts and subtracts the Seller concessions.
   
   

    Note: As a result of the different calculations described above, the LTV between Blend, DU, and LPA may not match in some circumstances.

Loan Affordable Programs Configurability

Lenders can customize which affordable loan programs they want to include in the dropdown. For example, you can customize the LPA affordable loan program type to only offer CHOICEHome, CHOICERenovation, Community Land Trust, and GreenCHOICE as options in the dropdown menu.

If you only support DU or LPA in Blend, the GSE affordable loan programs for that AUS will be visible and selectable in this selection.

 Note: This customization is a global configuration and applies to all lender users. If you are a Blend administrator at your organization and would like to customize the list of Affordable Loan Programs in Blend, contact Blend Support.