How to Manage Freddie Mac® Rep & Warrant for Self Employed Income

Overview

Income Analysis provides Freddie Mac^® AIM Rep and Warrant (R&W) results for self-employed borrower income through the Freddie Mac Asset and Income Modeler (AIM) for Self-Employment Program. This enhanced loan framework reduces risk and enhances investor confidence through added protection against future repurchase demands.

To take advantage of this program, first run Income Analysis on the borrower's financials. Once the analysis is complete, take the Income Analysis Reference Number and enter it directly into Loan Product Advisor^® (LPA) to view eligibility results.  

Select the investor guideline

The Investor Guideline dropdown allows you to switch between investors and see alternative eligibility options. The Investor Guideline determines the set of investor rules that Income Analysis will use when calculating the income. When the initial order is submitted, the Investor Guideline will either have been chosen at that time or left blank. If the investor was left blank, then Income Analysis will use a conservative set of industry standard guidelines by default.

1. From the Investor Guideline dropdown menu, select FHLMC (Freddie). A guideline option confirmation popup displays.

2. Depending on the scenario, selectable options may appear in the popup. If presented with options, make your selections.

3. Review the messaging, then click Save Changes.

4. Observe the updated investor is reflected.

Submit your loan to Freddie Mac for income determination

Use this process for completed orders when Freddie Mac (FHLMC) is selected as the investor, either initially or after switching from another investor. Be sure to follow these steps every time self-employed income calculations are updated to ensure Freddie Mac receives the most current loan data for R&W evaluation.

1. Confirm that Freddie Mac is the investor selected for you Income Analysis order.

2. Locate the Freddie Report ID using one of the following options:

   1. Locate the number within the analysis report, accessible by clicking the Output Options, then select View PDF from the dropdown menu. The number is located in the report and labeled “Reissue Reference”.

      

   2. The Income Analysis Reference Number can be found on the email notifications you receive after submitting an Income Analysis order.

      

   3. You can also locate the number within the analysis report, accessible by clicking the Output Options, then select View PDF from the dropdown menu. The number is located in the report and labeled “Reissue Reference”.

   4. If you’re an Encompass®-integrated user, you can also locate the number on the GSE Additional Provider Data page of Encompass®, in the CoreLogic Income Analysis (Bor,CoBor) field.

      

3. Enter the number in LPA from your Loan Origination System (LOS) or through the Freddie Mac Gateway. LPA will evaluate the income and provide feedback in real time. Review the results presented on the LPA Feedback Certificate to inform your next steps.

   Tip: For additional instruction on LPA Feedback Certificate and examples, view the GSE Rep & Warrant Programs.

4. If additional opportunities for income are identified or changes need to be made to the income, then return to your Income Analysis order and adjust the income fields according to the feedback provided by Freddie Mac.

5. Once your updates are complete, resend the data to Freddie Mac by choosing Send Freddie (Adj) from the Output Options dropdown.

6. Return to LPA and rerun the Automated Underwriting System (AUS) to evaluate the updated figures and receive updated feedback.

7. If you’re an Encompass®-integrated user, click Update LOS in Income Analysis to send the updated information to your LOS.  

Outcome

You can submit your loan to Freddie Mac LPA and receive R&W results for self-employed borrowers.