The Uniform Residential Loan Application can be complicated for both the borrower and the lender, especially when it comes to staying up-to-date on the new changes to the application and what they mean. In this blog post, we’ll explore what the Uniform Residential Loan Application is, the recent updates to the application, and what these changes mean for lenders receiving and reviewing residential mortgage loan applications. 

What is a Uniform Residential Loan Application?

A Uniform Residential Loan Application (URLA), also known as a Fannie Mae Form 1003 or just a 1003 form, is a standard form that collects all the information necessary for a mortgage lender to establish the risk profile of a borrower. The application is designed to help lenders establish all the information needed to accurately determine a borrower’s risk level by examining the type and terms of the loan, property information, borrower income and expenses, and more.

How Has the Uniform Residential Loan Application Changed?

While the previous iteration of the Uniform Residential Loan Application 1003 was in use by mortgage lenders for over two decades, an updated design of the application was officially launched on March 1, 2021. A wide range of changes were made to the application to create an easier and more user-friendly process for both the borrower and the lender.

Going digital

Up until this point, the Uniform Residential Loan Application was completed in-person at the financial institution. By transferring the application to a completely online environment, the process is much more streamlined and user-friendly for the borrower. Rather than setting up an appointment with a mortgage lender, borrowers can now initiate the application on their own time and are intuitively prompted through the process.

The new URLA includes 94 new data points, bringing the total up to 236. While this may sound lengthy, the new digitized process has streamlined the completion of the application, and even allows borrowers to easily indicate sections that may not apply to them.

Modernized fields

Any financial documentation that had been utilized since the 1990s would require some changes to reflect the needs of the modern borrower. The new version of the Uniform Residential Loan Application form now includes updated fields to collect borrower data such as email address, international address, cell phone number, and military services. 

The new 1003 form also includes a standardized Unmarried Addendum. While only certain states previously required the collection of a Civil Union/Domestic Partnership Addendum in the case of an unmarried borrower, this is now standard and required in any indication of an unmarried borrower. This addendum requests information regarding any other person in the household that has property rights, such as a partner or individual in a common-law marriage.

Along with the addition of some essential fields for today’s loan borrower, the updated URLA also eliminated some data collection fields that are now considered obsolete or no longer necessary to accurately establish a borrower risk profile, such as “years of schooling.”

What Does the New URLA Mean for Lenders?

Not only does the updated Uniform Residential Loan Application benefit the borrower, but it also makes borrower risk assessment much easier for the mortgage lender in four invaluable ways.

1. Digital data collection

The digital overhaul of the application is much less subject to human processing error than the prior entirely in-person application process. As a result, it allows lenders to collect the most accurate information about the borrower and create the most thorough risk evaluation.

2. Financial history

The application now includes some more in-depth financial history questions. Questions like these are invaluable to mortgage lenders, as they ensure fewer surprises down the line as lenders learn more crucial financial information about the borrower.

3. Government tracking

Borrower information is reported for the purposes of government tracking. The new Uniform Residential Loan Application form collects more comprehensive borrower demographic details, which makes government tracking and reporting much easier for the lender.

4. Time saving

As mentioned earlier, the digital URLA application allows borrowers to indicate sections that may not apply to them. With this feature, mortgage lenders only collect borrower data that is relevant in each application rather than weeding through irrelevant collected information, saving lots of time and energy.

Stay Ahead with Asurity

Keeping up with regulatory changes in the mortgage industry can be confusing and time-consuming. But with the right processes and solutions in place, you can stay ahead of the curve. Learn about Asurity’s compliant loan packages for all mortgage programs.