AIM for Income with Loan Product Advisor (Employer Data) · AIM* for Income with Loan Product Advisor ... and warranties related to the borrower’s income, the loan must be submitted

May 2020 Freddie Mac Learning Page 1

AIM* for Income with Loan Product Advisor®

(Employer Data)

*AIM = Asset and Income Modeler

This reference document is updated to coincide with changes to requirements for AIM for Income. These recent

changes include:

Effective Date: Loan Product Advisor submissions and resubmissions on or after May 30, 2020

Versions

4.07 and

higher

Message

Category-

Code

Version

5.0.6

Message

Code

Existing Message Text

(if applicable)

New/Revised Message

LPN – VA FE10224 ~BorrowerName~’s submitted

~JobName~ income was assessed using

the Equifax report. This report dated

~ReportDate~ expires ~ExpirationDate~

and must be retained in the loan file. No

further documentation is required for

this income.

~BorrowerName~’s submitted ~JobName~

income of ~SubmittedIncomeAmount~ was

assessed using the Equifax report. This report

dated ~ReportDate~ expires ~ExpirationDate~

and must be retained in the loan file. No

further documentation is required for this

income.

Note: Vertical revision bars " | " are also used in the margin of this reference to highlight these new requirements

and significant changes.

Revision History


AIM for Income

This reference is intended to assist you with using our automated income assessment (employer

data) with Loan Product Advisor® (referred to as “AIM for Income”), a part of asset and income

modeler (AIM) – our solution for automating the manual processes of assessing borrower assets

and income, and provides the following information:

Table of Contents Pages

Introduction to AIM for Income PG 3

How it Works (high-level overview) PG 3

Eligibility Requirements PG 4

Income Representation and Warranty Relief Results Returned PG 6

Loan Product Advisor Feedback Certificate Results Returned, including Documentation

Requirements PG 7

Seller’s In-House Quality Control Program Impacts PG 11

What You Need to Know to Get Started (Initial Set-Up) PG 11

Steps for Originating Loans Using AIM for Income PG 13

Tips and Information PG 19

Where to Get Help PG 19

Loan Product Advisor Feedback Certificate Examples PG 20

COVID-19 Response Notice:

Visit our COVID-19 Resources web page for temporary guidance related to credit underwriting

and property valuations effective immediately for all mortgages in process.

https://sf.freddiemac.com/about/covid19


AIM for Income

Introduction to AIM for Income

AIM for income uses the resources of a third-party verification service provider – Equifax® Verification Services

(The Work Number®) (the “service provider”) -- to access and assess income data. The income data can help you

automate your income calculations and determine if borrower income verification requirements are met on

conventional loans. Results from the automated income assessment are displayed on the Loan Product Advisor

Feedback Certificate.

This approach provides operational efficiencies through system-driven optimization of the collection and

assessment of data relating to borrower’s income. It also allows for potential relief from Freddie Mac’s

enforcement of certain selling representations and warranties related to the borrower’s income when there is

sufficient employer data available through Equifax Verification Services (The Work Number). Income that cannot

be assessed using AIM for income can still be used to qualify the borrower, provided it is verified and meets the

requirements of Freddie Mac Single-Family Seller/Servicer Guide (Guide).

How the Assessment Works

The following process flow provides a high-level view of how AIM for income works. Details are provided under

the Details on Participating in AIM for Income section.


AIM for Income

Loan Product Advisor automatically sends a request to the service provider for income information (refer to,

Figure 1 Request Methods), however, an income verification report is only returned when:

• An income verification report was ordered, and

• A match was made to identifying information on the request.

Eligibility Requirements

To take advantage of AIM for income and potential relief from Freddie Mac’s enforcement of certain selling reps

and warranties related to the borrower’s income, the loan must be submitted to Loan Product Advisor Version

S4.7.00 or higher and meet the requirements summarized below. For complete requirements, refer to Guide

Chapter 5901.

General Eligibility Requirements

Topic Requirement

Eligible Products Conventional mortgages

Loan Purpose ▪ Purchase

▪ Refinance

Eligible Income Sources

(As described in the

Guide)

The following income sources are eligible for AIM for income:

▪ Base non-fluctuating and fluctuating hourly employment earnings

▪ Overtime income

▪ Bonus income

▪ Commission income

The following employment earnings are not eligible for AIM for income:

▪ Military pay

▪ Earnings with the following characteristics:

o Earnings of a borrower employed by a family member, the

property seller, real estate broker or other interested party to the

transaction

o Employed income from foreign sources

o Income reported on Internal Revenue Service (IRS) Form 1099

Note: Income ― such as self-employed income, rental income, alimony, child

support, etc. ― that cannot be assessed will not be eligible for income rep and

warranty relief; however, the income source may still be used as qualifying

income provided it is documented and verified in accordance with the Guide.


AIM for Income

Topic Requirement

Income Verifications

Verifications must meet the following requirements:

▪ The method used to produce the income verification report must be an

automated process whereby the data for the report is accessed directly from

the service provider’s electronic database of employer-provided income

information.

▪ You must confirm that the information in the income verification report is for

the correct borrower and employer.

▪ If the borrower took a temporary leave of absence, as of the income

verification date, the borrower must have returned to work for at least 30

days following the leave.

Age of Verifications All income verifications must be dated no more than 120 days before the Note

Date, or Effective Date of Permanent Financing for Construction Conversion and

Renovation Mortgages.

Automated Underwriting You must:

▪ Ensure that the most current version of the income verification report is

used by Loan Product Advisor. If you obtain an updated report, the loan

must be resubmitted to Loan Product Advisor to make sure the most

current information is being assessed.

▪ Evaluate the income verification report, the information contained in

Form 65, Uniform Residential Loan Application, including the borrower’s

income and employment representations, and any other documentation

in the mortgage file.

▪ Submit to Loan Product Advisor the income amount you used to

underwrite the loan.

▪ Have no knowledge, information or documentation that contradicts a

reasonable expectation of continuance of income or probability of

consistent receipt of income for at least the next three years.

▪ Investigate and resolve any inconsistent or contradictory information

between the income verification report and the mortgage file, and if

necessary, update information in Loan Product Advisor based on such

information.

Delivery Loan must be delivered through Loan Selling Advisor as a Loan Product Advisor

mortgage with an LPA AUS Key Number.


AIM for Income

Income Representation and Warranty Relief Results

Loan Product Advisor assesses income on an individual borrower-level and income component-level basis (base

salary, bonus, commission and overtime). On a loan-level basis, Loan Product Advisor returns one of the

following income rep and warranty results on the Feedback Certificate. Eligible, Not Eligible, or Unavailable. The

Feedback Certificate also provides additional messages associated with the income rep and warranty relief result,

see below. To obtain relief, the data on the last complete Loan Product Advisor Feedback Certificate must be

consistent with the data delivered to Freddie Mac.

For mortgages that receive a Loan Product Advisor Risk Class of “Accept”, and an income representation and

warranty result on the Last Feedback Certificate of:

And,

A message is returned

indicating that the eligible

income sources verified by the

income verification report is

sufficient income

documentation,

Then,

all the eligible income sources

assessed by Loan Product

Advisor are eligible for relief

from enforcement of

representations and warranties

regarding:

▪ the accuracy of the income

calculation related to the

eligible income sources that

are on the income

verification report, and

▪ the accuracy and integrity of

the information on the

income verification report.

Note: Message Code UL will be

returned when there is non-

assesed and/or out of scope

income that is not required to

retain income rep and warranty

relief. In this instance you must

either, document this non-

assessed income, or remove and

resubmit.

And,

A message is returned indicating

that the eligible income sources

verified by the income verification

report is sufficient income

documentation,

Then,

all the eligible income sources

assessed by Loan Product

Advisor are eligible for relief

from enforcement of

representations and warranties

regarding:

▪ the accuracy of the income

calculation related to the

eligible income sources that

are on the income verification

report, and

▪ the accuracy and integrity of

the information on the

income verification report

However,

additional feedback message(s)

will be displayed to instruct you

to verify the non-assessed

and/or out of scope income, as

per the Guide, to retain the

income rep and warranty relief

on the eligible income source.

Note, the non-assessed and/or

out of scope income is not

eligible for income rep and

warranty relief.

And,

A feedback message indicating

that the eligible income source

verified by the income

verification report is sufficient

income documentation was not

returned,

Then,

the loan is not eligible for

income representation and

warranty relief,

However,

it may still be eligible for relief

offered through Freddie Mac’s

selling representation and

warranty framework as

described in Guide Section

1301.11.

Note: Derived income messages

will be returned. Refer to, Loan

Product Advisor Feedback

Certificate Results Returned,

including Documentation

Requirements.

Eligible Not Eligible Not Eligible


AIM for Income

Loan Product Advisor Feedback Certificate Results Returned, including Documentation

Requirements:

The following chart provides a summary of income assessment results and the messages returned to confirm income representation and warranty relief eligibility and documentation requirements.

Income Rep

and Warranty

Result/Risk

Class

Loan Product Advisor Feedback Messages Income Documentation1

Income

representation and

warranty relief

Borrower Income

Eligible Income

Sources Reported on

the Income

Verification Report2

Income Not Reported

on the Income

Verification Report

and/or Other Income

Sources

Eligible

Accept Risk

Class

Relieved from:

• Accuracy of the

income calculation

related to eligible

income sources that

are on the income

verification report,

and

• Accuracy and

integrity of the data

represented on the

income verification

report.

“Based on Loan

Product Advisor’s

overall assessment,

the loan is eligible for

income representation

and warranty relief.”

(Message 24)

Borrower’s income

source is an eligible

income source reported

on the income


assessed by Loan

Product Advisor, which

is sufficient to support

the loan.

Document the eligible

income source with the

following:

▪ The income

verification report

received from the

service provider and

maintain in the

mortgage file.

(Message VA)

▪ 10-day pre-closing

verification of

borrower’s current

employment.

(Message CZ)

▪ IRS Form 4506-T

(or an acceptable

alternative form)3, is

not required for a

borrower if all of

that borrower’s

income is from an

eligible source and

is on the income

verification report.

Message 1K will not

be returned.

If there is an income

source submitted to Loan

Product Advisor that is

not eligible for

assessment, or is an

eligible income source

not reported on the

income verification

report, then either:

▪ Verify and document

the income per the

Guide for the applicable

income type

(various messages and

Message UL)

or

▪ Remove the income

and resubmit the loan

to Loan Product

Advisor.

(Message UL)

▪ IRS Form 4506-T (or an

acceptable alternative

form)3, is required.

(Message 1K)

Note: You do not receive

income representation

and warranty relief for

these other income

sources.


AIM for Income

Income Rep

and Warranty

Result/Risk

Class


Income

representation and

warranty relief

Borrower Income

Eligible Income

Sources Reported on

the Income


Income Not

Reported on the

Income Verification

Report and/or

Other Income

Sources

Not Eligible

with Message

Code VA

Returned

Accept Risk

Class

The loan is not eligible

for income rep and

warranty relief.

(Message 23)

However, the eligible

income source that was

assessed may be eligible

if:

Loan Product Advisor

returns Message VA,

then the eligible income

source supported by the

income verification

report is sufficient

income documentation.

Then,

You are relieved from:

• Accuracy of the

income calculation

related to eligible

income sources that

are on the income


• Accuracy and integrity

of the data

represented on the

income verification

report.

Borrower’s income

source:

• Eligible income

source reported on

the income

verification report,

and

• Income source not

eligible for

assessment but used

to underwrite the

loan.

Document the eligible

income source with the

following:

▪ The income

verification report

received from the

service provider.

(Message VA)

▪ 10-day pre-closing

verification of

borrower’s current

employment.

(Message CZ)

▪ IRS Form 4506-T (or

an acceptable

alternative form)3,

however not

required for a

borrower if all of

that borrower’s

income is from an

eligible source and

is on the income


(Message 1K)

Income other than the

derived income (e.g.,

alimony, social

security) must be

verified and

documented as

required by the Guide

in order to retain

representation and

warranty relief for

eligible income

sources.

(Various messages)

Note: You do not

receive income

representation and

warranty relief for

these other income

sources.


AIM for Income

Income Rep

and Warranty

Result/Risk

Class


Income

representation and

warranty relief

Borrower Income

Eligible Income

Sources Reported on

the Income


Income Not

Reported on the

Income Verification

Report and/or

Other Income

Sources

Not Eligible

Accept or

Caution Risk

Class

The loan is not eligible

for income

representation and

warranty relief related to

the borrower’s income.

“Based on Loan Product

Advisor’s overall

assessment, the loan is

not eligible for income

representation and

warranty relief; however,

it may be eligible for

relief offered through

Freddie Mac's selling

representation and

warranty framework.”

(Message 23)

Note: Message was not

returned indicating no

further documentation is

required for the income

reflected on the income


At the

borrower/employment

level, Loan Product

Advisor returns:

▪ The total derived

income amount

(Message 8D)

▪ The income

amount derived

by income type

(base, overtime,

bonus, etc.)

(Message 8G)

Verify and document the income per the Guide

for the applicable income type.

(Various messages)


AIM for Income

Income Rep

and Warranty

Result/Risk

Class

Loan Product Advisor Feedback Messages Income Documentation

Income

representation and

warranty relief

Borrower Income

Eligible Income

Sources Reported on

the Income


Income Not

Reported on the

Income Verification

Report and/or

Other Income

Sources2

Unavailable

Accept or

Caution Risk

Class

Loan Product Advisor

was unable to assess the

borrower’s income. This

could be due to missing

or incomplete

information from the

service provider or a

system being down.

Refer to messages

returned.

You are not eligible for

relief from enforcement

of representation and

warranties related to the

borrower’s income.

The income must be verified and documented as required by the Guide.

NOTES:

1 Keep in mind, eligibility for income rep and warranty relief applies only to eligible income sources whereby the method

used to produce the income verification report (verify the income) is an automated process in which the data for the report

is accessed directly from Equifax Verification Services (The Work Number) electronic database of employer-provided

income information. Income verified through a manual process is not eligible for automated income assessment.

2For the eligible income sources verified on the income verification report, you are not required to document the loan file

with:

▪ Employed income documentation (paystub(s), W-2(s), written verifications of employment, or tax return(s)

3Commonwealth of Puerto Rico Form 2907 or Form 4506-T, as applicable, signed by the borrower for income that is derived

from sources in Puerto Rico, Guam, or the U.S. Virgin Islands and is exempt from federal income taxation under the

Internal Revenue Code.

Note: An Income R&W shield on the Feedback Certificate will be available in a future Loan Product Advisor release so you can

quickly identify if the loan is eligible for income rep and warranty relief. For more information refer to Loan Product Advisor

v5.0.06 specifications.

Refer to the Loan Product Advisor Feedback Certificate Examples section for a summary of Loan Product Advisor

income assessment results and applicable messages.


AIM for Income

Seller’s In-House Quality Control Program

Notwithstanding the requirements of Guide, for mortgages selected for pre-closing and/or post-closing quality

control review that receive an income rep and warranty result of either “Eligible” or “Not Eligible” with a

feedback message indicating that no further documentation is required for the income reflected on the income

verification report, you are not required to do the following for eligible income sources that are on the income


▪ Reverify or recalculate the income

▪ Obtain IRS income information using Form 4506-T or acceptable alternate form for the assessed

income, or

▪ Obtain income information using Commonwealth of Puerto Rico Form 2907 or Form 4506-T or

acceptable alternate form for the assessed income

Details on Using AIM for Income

The next several sub-sections cover details to use AIM for income, including the initial setup process and steps for

using Loan Product Advisor’s automated income assessment.

Initial Setup

To benefit from AIM for income, you must first have an agreement for verification services with the service

provider -- Equifax Verification Services (The Work Number) or an authorized Equifax reseller -- that authorizes

the service provider to share the employment data with Freddie Mac. You are not required to use the automated

income assessment.

The service provider must produce the income verification report using an automated process whereby the data

for the report is accessed directly from the service provider’s electronic database of employer-provided income

information.

You must also be enrolled in Audit by Loan Number (ABLN) with Equifax. To enroll in ABLN, you will need to sign

an ABLN addendum for Equifax to release their audit copies of their completed verifications to Freddie Mac. Your

account representative from Equifax will be able to provide this required addendum. If you do not know your

account representative, send an email to [email protected] to request ABLN.

Note: If using an authorized Equifax reseller, you will need to follow the process outlined by that reseller.

https://www.equifax.com/business/income-verification/

mailto:[email protected]


AIM for Income

After setup is complete with the service provider, Loan Product Advisor offers various request methods, refer to

Figure 1, to receive the income verification data from the service provider. You may choose to:

1. Opt-in to the automated income assessment with Loan Product Advisor, which authorizes Loan Product

Advisor to automatically obtain income verification reports you have ordered from the service provider for

each loan submission using the loan number; or,

2. Opt-in, as described above, and provide Loan Product Advisor with the service provider’s unique loan

identifier (Report Number) in the Report ID data field to ensure that the report obtained is for that Report

Number provided, or,

3. Not opt-in*, provide Loan Product Advisor with the service provider’s Report Number in the Report ID data

field to automatically obtain the income verification report you have ordered from the service provider for

that Report Number provided.

*As a Seller/Servicer, even though you did not initially complete and submit the Loan Product Advisor

Automated Income Assessment-Equifax Opt-in Form, your subsequent provision of the Report Number, like

the earlier formal opt-in process, will constitute your authorization for Loan Product Advisor to automatically

obtain income assessment reports from Equifax as part of the automated income assessment capability.

Figure 1: Request Methods

Automated Income Assessment with Loan Product Advisor Request Methods

If, and, then,

Opt-in Report Number is not provided

Loan Product Advisor will automatically

request the income verification report(s)

using the lender loan number (Loan

Number) and borrower(s) social security

number (SSN).

Opt-in Report Number is provided

Loan Product Advisor will request the

income verification report(s) using the

Report Number and borrower(s) SSN.

Note: The loan number will not be used.

Did not opt-in* Report Number is provided

Loan Product Advisor will request the

income verification report(s) using the

Report Number and the borrower(s) SSN(s).

Note: This will allow lead numbers, TPO

loan numbers, or the Loan Product Advisor

ID to be used rather than the lender loan

number.

Did not opt-in* Report Number is not provided

Loan Product Advisor will not request any

income verification report(s) for that

submission.

http://www.freddiemac.com/loanadvisorsuite/loanproductadvisor/income_assessment_form.html


AIM for Income

Steps for Originating Loans Using AIM for Income

To originate loans that may be eligible for income rep and warranty relief, you must complete the steps outlined

below. Based on your organization’s business processes, the order in which you complete the steps may vary.

Step 1: Order the Income Verification Report from the Service Provider

As part of your process for gathering loan application data and authorizations, also obtain the borrower’s

authorization to receive the borrower’s income information from the service provider and to share the

information with Freddie Mac. After you have obtained the borrower’s authorization, order the income

verification report from the service provider.

Step 2: Reconcile the Income Verification Report(s)

Using an automated process, the service provider generates the income verification report from their

database if the data is available. The automated process can be used to verify income employers who

currently provide information to The Work Number database. If income data is not available from The Work

Number database, the service provider will notify you.

After you receive the report(s), review the information and address any inconsistent or contradictory

information between the report(s) and the mortgage file. For example:

▪ Does the borrower’s identifying information match the loan application (employee name, SSN,

address)?

▪ Do the employer and dates of employment match the loan application?

▪ Does the borrower’s income type match the loan application?

▪ Does the borrower’s payment frequency match the loan application?

▪ Is the borrower’s income amount consistent with the amount disclosed on the loan application?

Note: All income verifications must be dated no more than 120 days before the Note Date, or Effective Date of

Permanent Financing for Construction Conversion and Renovation Mortgages and may contain up to three

years of data.

Deliver to

Freddie

Mac

6

Review

Results

5

Submit to

Loan

Product

Advisor

4

Complete

data

entry

3

Reconcile

the

income

verification

report

2 Order

the income

verification

report from

the service

provider

1


AIM for Income

The following is an example of an income verification report that will be provided to you from the service

provider:

Tracking Number: The

Report Number for Equifax

Verification Services


AIM for Income

Step 3: Complete Loan Product Advisor Loan Data Entry

Once you have reviewed the report(s) and addressed inconsistencies, complete loan data entry in Loan

Product Advisor. Keep the following in mind when entering data:

1. Income must be entered in Loan Product Advisor by income type for each borrower for Loan Product

Advisor to make an accurate assessment. Enter the borrower’s gross monthly income amount used to

underwrite the loan.

2. Loan Product Advisor cannot assess income entered under secondary employment income when

assessing the borrower’s income. Secondary employment income must be added to the borrower’s

primary income earnings to be included in the income calculations. Applicable primary and secondary

income must be included in the following primary income fields to be assessed:

- Base employment income (include both fluctuating and non-fluctuating employment earnings)

- Bonuses

- Overtime

- Commission

For example,

If Borrower Earns… Enter…

$5,000 from primary employment (base

earnings)

$1,000 from secondary employment (base

earnings)

$6,000 in the primary Base Employment Income

field


earnings)

$1,000 from secondary employment

(commission)

$6,000 in the primary Base Employment Income

field

$1,000 in the primary Commission field


earnings)

$1,000 from primary employment (bonus)

$2,000 from secondary employment (base

earnings)

$10,000 in the primary Base Employment

Income field

$1,000 in the primary Bonuses field


AIM for Income

Step 4: Submit to Loan Product Advisor

▪ For System-to-system integration users:

From your system, provide the Report ID and submit the loan to Loan Product Advisor to begin the

assessment. Loan Product Advisor sends a request based on the applicable information provided,

refer to the Initial Set-up.

▪ For direct access Loan Product Advisor users when providing the Report Number:

- On the Request Services page in Loan Product Advisor, select the Request an Automated

Underwriting Assessment check box (refer to Figure 2).

- Select the Request Verification Report checkbox, the borrower, verification type, and verification

company and enter the Reissue ID/Report ID located on the service provider’s income verification

report (refer to Figure 2).

- Click Add Request, Submit and then Confirm Submit (refer to Figure 3).

The service provider must match the information provided in the request to release the report data to Loan

Product Advisor.

If a match is made, Loan Product Advisor receives the report and completes an analysis on the income as a

part of its assessment. Income is derived on an income component-level (base, bonus, commission and

overtime) basis. If a match is not made, you will receive a message indicating Loan Product Advisor was

unable to process the report for an individual borrower.


AIM for Income

Figure 2: Direct Entry - Request Services Page

Select the applicable

borrower from the drop

down.

Select Income.

Select the

applicable Service

Provider.

To delete a request

from the Order

Summary, click on the

trash can.

Select Request

Verification Report.

The Order Summary section

displays the order history,

including prior Reissue Key(s).

Enter the Report Number

provided in the Income

Verification Report from the

Service Provider.

After you have entered all

the information, click

Submit.

Select Add Request to add

the request information to

the Order Summary.


AIM for Income

Figure 3: Direct Entry - Confirm Submission Page

When you click Confirm Submit, Loan Product Advisor sends the request to the service provider’s

system.

Step 5: Review the Loan Product Advisor Results

Messages from the automated income assessment are returned in the Employment & Income section of the

Loan Product Advisor Feedback Certificate regarding eligibility for income rep and warranty relief.:

Review the messages and reconcile them against the information in the income verification report(s). Keep in

mind, after you review the messages and determine what, if any action is needed, you may choose to

resubmit the loan.

Refer to Loan Product Advisor Feedback Certificate Examples for more details.

Step 6: Deliver the Loan to Freddie Mac

When you are ready to deliver the loan to Freddie Mac, you must deliver it through Loan Selling Advisor with

the LP AUS Key Number. Loan Selling Advisor confirms that the data from the last Loan Product Advisor

Feedback Certificate is consistent with the data delivered in Loan Selling Advisor, and when applicable,

provides rep and warranty relief from certain selling reps and warranties related to the borrower’s income.

Prior to delivery, Loan Quality Advisor may be used as a supportive tool for managing the income rep and

warranty relief eligibility that was determined in Loan Product Advisor. After delivery, Loan Coverage Advisor

may be used to track income rep and warranty relief.


AIM for Income

Additional Tips and Information

Where to Get Help

For questions related to the automated income assessment, please contact your

Freddie Mac representative or Freddie Mac’s Customer Support Center at 800-FREDDIE.

Also, visit the Asset & Income Modeler (AIM) web page. For questions related to your

service provider’s system, contact your respective representative(s).

Employment Verifications:

The 10-day pre-closing employment

verification must be completed

outside the income assessment

capability offered by Loan Product

Advisor. Loan is not eligible for

representation and warranty relief

for the 10-day pre-closing

employment verification.

Employment Verification: Inconsistent or Contradictory

Information:

Loan Product Advisor submits a request

to the service provider on every

submission, however, new data will not

be returned unless you order a new

report. For example, if the borrower

received a raise and you want Loan

Product Advisor to consider the raise in

its assessment, you need to order a

new income verification report and

resubmit to Loan Product Advisor.

Verification Report

https://sf.freddiemac.com/tools-learning/loan-advisor/content/aim


AIM for Income

Loan Product Advisor Feedback Certificate Examples – AIM for Income

The following Feedback Certificate Employment & Income section examples display messages you may see in

your results.

The following examples received a Risk Class of “Accept”

Example 1 – Loan is Eligible for Loan-Level Relief

In this example, the loan was submitted with the following income sources:

Eligible Income Sources on a

third-party report

Eligible sources not on a third-party report

and/or other income sources

• Jess Freddie: Base employment

income (Enterprise USA)

• N/A

Employment & Income

Code Messages

24 Based on Loan Product Advisor’s overall assessment, the loan is eligible for income representation and warranty relief.

VA JESS T FREDDIE’s submitted Enterprise income of $3,700.00 was assessed using the Equifax report. This report dated 3/24/2020 expires 7/22/2020 and must be retained in the loan file. No further documentation is required for this income.

CZ A 10-day pre-closing verification (10-day PCV) for JESS T FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.

Reminder Effective March 29, 2020: Derived income messages are no longer returned when Message

Code VA is returned.


AIM for Income

The Results from Example 1 indicate:

Income Rep and Warranty Results

Topic

Eligible

income

source on a

third-party

report

Eligible

income NOT

on a third-

party report

and/or other

income

source

Feedback Messages

Loan Level

Eligible? Message Code 24: Based on the assessment, the loan is

eligible for income rep and warranty relief. The borrower’s

submitted eligible income source is sufficient to support the

loan. Source level

Eligible?

Documentation Requirements

Third-party

Report

Message Code VA: The income verification report is

sufficient documentation to support the submitted eligible

income for Jess Freddie. Maintain in the mortgage file.

Paystub/

W-2(s)

Message Code VA: No further documentation is required for

this income source (e.g. paystub(s), W-2(s), or written VOE).

10-day PCV

Message Code CZ: Traditional documentation for obtaining

the 10-day pre-closing verification (10-day PCV) from the

employer is required for Jess Freddie.

4506-T

If all the borrower’s income is an eligible income source

assessed by Loan Product Advisor, you are not required to

obtain a 4506-T, therefore, Message Code 1K is not returned.

Other

documentation

Not applicable


AIM for Income

Example 2 – Loan is Eligible for Loan-Level Relief for Income on the Third-Party Income Verification Report



third-party report



• Jess Freddie: Base employment


• Mary Freddie: Base employment income,

not reported on a third party report

Employment & Income

Code Messages


VA JESS T FREDDIE’s submitted Enterprise USA income of $3,700.00 was assessed using the Equifax report. This report dated 3/24/2020 expires 7/22/2020 and must be retained in the loan file. No further documentation is required for this income.

UL MARY FREDDIE’s submitted Employment/base income is not required. Either remove this income and resubmit or document this income in accordance with Freddie Mac Single-Family Seller/Servicer Guide Topic 5300.

1K Signed IRS Form 4506-T: Any borrower, whose income is used to qualify, is required to sign IRS Form 4506-T no later than the Note Date.

CZ A 10-day pre-closing verification (10-day PCV) for JESS T FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.

CZ A 10-day pre-closing verification (10-day PCV) for MARY FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.

CV Employment/base income for MARY FREDDIE for base non-fluctuating earnings or fluctuating hourly earnings must be supported by a YTD paystub documenting all YTD earnings and W-2(s) for the most recent calendar year, OR a written VOE documenting all YTD earnings and earnings for the most recent calendar year.




AIM for Income


Income Rep and Warranty Relief Results

Topic

Eligible

income

source on a

third-party

report

Eligible

income NOT

on a third-

party report

and/or other

income source

Feedback Messages

Loan Level

Eligible?

Message Code 24: Based on the assessment, the loan is

eligible for income rep and warranty relief. The submitted

eligible income source reported on the third-party report for

Jess Freddie is sufficient to support the loan. For Mary Freddie

refer to Message Code UL below.

Mary Freddie’s income is an eligible income source not

reported on a third-party report, therefore, it is not eligible

for income rep and warranty relief.

Source level

Eligible?


Third-party

Report

Message Code VA: The income verification report is

sufficient documentation to support the submitted eligible

income source for Jess Freddie. Maintain in the mortgage

file.

Mary Freddie’s income is not reported on a third-party report.

Paystub(s)/

W-2(s)

Message Code VA: No further documentation is required for

Jess Freddie (e.g. paystub(s), W-2(s) or written VOE).

*

Message Code UL and CV: The submitted eligible income

source reported on the third-party report for Jess Freddie is

sufficient to support the loan. Mary Freddie’s income is not

required, therefore, you have the *option, for Mary Freddie’s

income source, to:

• Verify and document the income, Message Code CV, or

• Remove the income and resubmit the loan to Loan

Product Advisor, Message Code UL.

10-day PCV **

Message Code CZ: Traditional documentation requirement

for obtaining the 10-day pre-closing verification from the

employer is required for both borrowers. **However, not

required for Mary Freddie if you remove her income and

resubmit the loan to Loan Product Advisor (refer to Message

Code UL).

4506-T

Message Code 1K: Obtain a 4506-T.


AIM for Income

Other

documentation Not applicable

Example 3 – Loan is Not Eligible for Loan-Level Income Rep and Warranty Relief, Eligible for Rep and Warranty

Relief for Income on the Third-Party Income Verification Report



third-party report



• Sonny Freddie: Base employment


• Sonny Freddie: child support

Employment & Income

Code Messages

23 Based on Loan Product Advisor’s overall assessment, the loan is not eligible for income representation and warranty relief, however, it may be eligible for relief offered through Freddie Mac’s selling representation and warranty framework.

VA SONNY FREDDIE’s submitted Enterprise USA income of $4,377.00 was assessed using the Equifax report. This report dated 4/22/2020 expires 8/20/2020 and must be retained in the loan file. No further documentation is required for this income.

CZ A 10-day pre-closing verification (10-day PCV) for SONNY FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.

4V Alimony or child support income for SONNY FREDDIE must be supported by documentation evidencing receipt of the income for the most recent six months and signed court order, legally binding separation agreement and/or final divorce decree verifying the payor’s obligation for the previous six months, including the amount and the duration of the obligation. Proof of the ages of the children for which child support is received.

1K Signed IRS Form 4506-T. Any borrower, whose income is used to qualify, is required to sign IRS Form 4506-T no later than the Note Date.




AIM for Income



Topic

Eligible

income

source on a

third-party

report

Eligible

income NOT

on a third-

party report

and/or other

income

source

Feedback Messages

Loan Level

Eligible?

Message Code 23: Based on the assessment, the loan is not

eligible for income rep and warranty relief.

Source level

Eligible?

Mortgages that receive a Not Eligible with Message Code VA

the submitted eligible income source (Sonny Freddie) supported

by the third-party report is eligible for income rep and warranty

relief, as long as, the child support is documented and verified

per the Guide.

The child support income is not eligible for income rep and

warranty relief.


Third-party

Report

Message Code VA: The income verification report is sufficient

documentation to support the submitted eligible income

source for Sonny Freddie. Maintain in the mortgage file.

Paystub(s)/ W-

2(s)

Message Code VA: No further documentation is required for this

income source (e.g. paystub(s), W2(s) or written VOE).

10-day PCV

Message Code CZ: Traditional documentation requirement for

obtaining the 10-day pre-closing verification from the

employer is required for Sonny Freddie.

4506-T


Other

documentation

Message 4V: The traditional documentation requirements must

be obtained for the child support income to retain the income

rep and warranty relief for the submitted eligible income

source.


AIM for Income

Example 4 – Loan is Not Eligible for Loan-Level Income Rep and Warranty Relief



third-party report



• Sonny Freddie: Base employment


• Sonny Freddie: Commission income

(Enterprise USA)

Employment & Income

Code Messages

23 Based on Loan Product Advisor’s overall assessment, the loan is not eligible for income representation and warranty relief, however, it may be eligible for relief offered through Freddie Mac’s selling representation and warranty framework.

8D For SONNY FREDDIE, the total derived income is $9,166.67.

8G SONNY FREDDIE’s gross base income of $9,166.67 at Enterprise USA was derived using Employment – Equifax report.

78 Unable to assess commission income for SONNY FREDDIE at Enterprise USA because missing or insufficient years of income was received on the Equifax income verification.

1K Signed IRS Form 4506-T. Any borrower, whose income is used to qualify, is required to sign IRS Form 4506-T no later than the Note Date.

CZ A 10-day pre-closing verification (10-day PCV) for SONNY FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.

CV Employment/base income for SONNY FREDDIE for base non-fluctuating hourly earnings must be supported by a YTD paystub documenting all YTD earnings and W-2(s) for the most recent calendar year, OR a written VOE documenting all YTD earnings and earnings for the most recent calendar year.

X3 Commission income for SONNY FREDDIE must be supported by YTD paystub(s) documenting all YTD earnings and W-2s for most recent two calendar years OR a written VOE documenting all YTD and most recent two calendar year earnings.


AIM for Income



Topic

Eligible

income

source on a

third-party

report

Eligible

income NOT

on a third-

party report

and/or other

income source

Feedback Messages

Loan Level

Eligible?

Message Code 23: Based on the assessment, the loan is not

eligible for income rep and warranty relief.

Source level

Eligible?

Message Code 78: When the income rep and warranty result is

Not Eligible and Message Code VA is not returned, Loan

Product Advisor will return feedback messages related to the

derived income. In this case, Loan Product Advisor was unable

to assess the commission income on the income verification

report.


Third-party

Report

Message Code 8D is returned for the total Loan Product

Advisor derived income for Sonny Freddie using the Equifax

report. Message Code 8G is returned to display the source of

the Loan Product Advisor derived income for Sonny Freddie.

Maintain in the mortgage file.

Paystub(s)/

W-2(s)

Message Code CV: For the Employment Income for Sonny

Freddie obtain YTD paystub documenting a YTD earnings and

W-2(s) for the most recent calendar year, OR written VOE

documenting all YTD earnings and earnings for the most

recent calendar year.

10-day PCV

Message Code CZ: Traditional documentation requirement

for obtaining the 10-day pre-closing verification from the

employer is required for Sonny Freddie.

4506-T


Other

documentation

Message Code X3: Loan Product Advisor derived income is

less than the submitted income. The traditional

documentation requirements must be obtained for the

commission income not reported on the income verification

report.


AIM for Income

Example 5 – Loan is Eligible for Loan-Level Relief for Income on the Third-Party Income Verification Report

This example is provided to illustrate instances of when Message Code 8V is returned, in lieu of Message Code VA.

Message Code 8V is returned when one borrower has multiple employers and each one is documented on an

income verification report (third-party report).



third-party report



• Alice Freddie: Primary income

source/Enterprise USA: Base

employment income

• N/A

• Alice Freddie: Secondary income

source/Park Run Co: Fluctuating

hourly employment income

Employment & Income

Code Messages


30 Loan must close within 120 days of the report date.

8V The third-party report from (Equifax) is sufficient documentation to support the income and must be retained in the loan file. The third party report dated 12/30/2019 expires 4/28/2020.

CZ A 10-day pre-closing verification (10-day PCV) for ALICE FREDDIE is required for each source of employment income used to qualify. The 10-day PCV must be dated no more than 10 business days prior to the Note Date or after the Note Date but prior to the Delivery Date.


Code 8V is returned.


AIM for Income


Income Rep and Warranty Results

Topic

Eligible

income

source on a

third-party

report

Eligible income

NOT on a third-

party report

and/or other

income source

Feedback Messages

Loan Level

Eligible?

Message Code 24: Based on the assessment, the loan is

eligible for income rep and warranty relief. The borrower’s

eligible income source is sufficient to support the loan. Source level

Eligible?


Third-party

Report

Message Code 8V: Multiple third-party reports per borrower.

The third-party reports, for each employer, are sufficient

documentation to support the eligible income sources for

Alice Freddie. Maintain in the mortgage file.

Paystub/

W-2(s)

Message Code 8V: When this message is returned no further

documentation is required for each employed income source

(e.g. paystub(s), W-2(s) or written VOE).

10-day PCV

Message Code CZ: Traditional documentation for obtaining

the 10-day pre-closing verification from each source of

employment income used to qualify (Enterprise USA and

Park Run Co) is required for Alice Freddie.

4506-T

If all the borrower’s income is an eligible income source

assessed by Loan Product Advisor, you are not required to

obtain a 4506-T, therefore, Message Code 1K is not returned.

Other

documentation

Not applicable

This document is not a replacement or substitute for the information found in the Freddie Mac Single-Family Seller/Servicer

Guide or terms of your Master Agreement or other Pricing Identifier Terms.

© 2020 Freddie Mac

Documents

AIM for Income with Loan Product Advisor (Employer Data) · AIM* for Income with Loan Product Advisor ... and warranties related to the borrower’s income, the loan must be submitted