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MortgagePoint » Your Trusted Source for Mortgage Banking and Servicing News 82 J O U R N A L September 2023 Government FREDDIE MAC TO USE TAX TRANSCRIPTS AS INCOME VERIFICATION F reddie Mac has announced en- hancements to its automated income assessment tool to include tax transcripts as a new data source. This en- hancement will give lenders another tool that automates income assessments with speed and accuracy, opening the door to home- ownership for more qualified self-employed borrowers who report income on IRS Form Schedule C (sole proprietors). The new capability is available to mortgage lenders nationwide through Freddie Mac's Loan Product Advisor (LPASM) asset and in- come modeler (AIM). By offering a direct con- nection to tax transcript data—which is readily available online for every taxpayer—lenders can simplify and speed up the assessment while saving applicants time and reducing associated costs. Additionally, AIM helps min- imize risk, giving lenders confidence they are delivering loans that align with Freddie Mac's strong purchase eligibility requirements and credit underwriting standards. "The traditional underwriting process for self-employed individuals is a pain point for lenders and borrowers as it can be more complex and time-consuming," said Kevin Kauffman, Single-Family VP of Seller Engagement at Freddie Mac. "The incorpora- tion of verified tax transcript data into Loan Product Advisor's automated assessment for these individuals will help reduce risk and provide a fast, convenient and precise meth- od to expand access to credit in this tight purchase market." In 2019, Freddie Mac pioneered the auto- mation of assessing a self-employed individ- ual's tax returns. Today's latest advancement with tax transcripts will help lenders close loans faster and simplify lender underwriting for an important sector of the U.S. workforce. Approximately 16.6 million Americans are self-employed. Freddie Mac digital tools and solutions offer lenders cost-effective ways to enhance their quality control operations. Analysis shows that loans originated by lenders lever- aging Freddie Mac's automated offerings are four times less likely to produce defects than loans without these technology offerings. Process automation is especially beneficial for documenting income, both in the collec- tion and assessment process. That's vitally important because income verification issues account for nearly one-third of all purchase transaction defects. This new AIM capability will be available to Freddie Mac-approved Sellers using Loan Product Advisor beginning August 2, 2023. Halcyon is the initial service provider sup- porting Freddie Mac's AIM for income using tax transcripts. HUD AND VA LAUNCH PROGRAM TO TRANSITION VETERANS TO PERMANENT HOUSING T he U.S. Departments of Housing and Urban Development (HUD) and Veterans Affairs (VA) have launched the HUD-Veterans Affairs Supportive Hous- ing (HUD-VASH) Boot Camps—a series of workshops to help Public Housing Agencies (PHAs) and Veteran Affairs Medical Centers (VAMCs) improve their processes and more quickly transition veterans from homeless- ness to permanent housing with wraparound supportive services. The HUD-VASH program combines HUD's Housing Choice Voucher (HCV) rent- al assistance for homeless veterans with case management and clinical services provided by the VA. On April 10, 2023, HUD announced the availability of approximately $94.4 mil- lion in HUD-VASH. HUD anticipates that this funding will support up to11,000 new HUD-VASH vouchers. These vouchers are administered in partnership with the VA and enable homeless veterans and their families to access affordable housing with an array of supportive services. PHAs that registered interest and were deemed eligible will receive invitation letters this week—the official fund- ing opportunities to come.