I’ve heard we must use the new Uniform Residential Loan Application (URLA), or Form 1003, starting March 1, 2021. What changes have been made to the URLA and are we permitted to use it before that date?
Yes, the mandatory effective date for the new URLA is March 1, 2021, but mortgage brokers/lenders have been permitted to use it since January 1, 2021. Fannie Mae and Freddie Mac redesigned the URLA with the goal of assisting both consumers and lenders by making it easier to understand and capture relevant loan application information. Some of the key differences with the new URLA include a larger font, which makes it easier to read and enter information, as well as additional contact information and other requests from applicants. Further, the new URLA incorporates the collection of Demographic Information so that it is in line with current HMDA data collection and reporting requirements. This eliminates the need for a separate Demographic Information Addendum.
It is important to note that as part of the new URLA, if there are multiple borrowers for a loan, each additional borrower must complete an URLA – Additional Borrower Form. Below is guidance on to use the URLA and URLA – Additional Borrower Form:
• Two Borrowers with joint financial information:
- Complete the URLA plus the URLA – Additional Borrower Form, but report assets, liabilities & real estate for additional Borrower on the URLA;
- Complete a separate URLA for each Borrower and report joint assets, liabilities, and real estate on only one URLA (you do not need to duplicate them on more than one URLA);
- In cases where borrowers are not collaborating when completing the loan application, joint assets, liabilities, and real estate may be duplicated.
• Two Borrowers with separate financial information:
- Complete the URLA plus the URLA – Additional Borrower Form and report the assets, liabilities, and real estate for the additional Borrower on the URLA;
- Complete a separate URLA for each Borrower.
• Three or more Borrowers:
- Use any combination of the URLA and URLA – Additional Borrower Form in accordance with the above examples.