The 1003 loan application form, also known as the Uniform Residential Loan Application, was developed by the Federal National Mortgage Association or Fannie Mae as a standardized form for the industry. Fannie Mae and her siblings, the Federal Home Loan Mortgage Corp. or Freddie Mac, lend to companies created by the U.S. Congress to maintain liquidity in the mortgage market. Mortgage Application Form 1003 is the industry standard form used by almost all mortgage lenders in the United States. This basic form or its equivalent is filled out by a borrower when applying for a mortgage. While some lenders use alternative forms or simply accept borrowers` basic information about their identity, type of ownership and value, the vast majority of lenders rely on Form 1003. Form 1003 contains all the information a mortgage lender needs to determine whether a potential borrower is worth the risk of the loan. This also includes information about the identity of the borrower. While some lenders do not need employment information to consider a new mortgage, Form 1003 provides for up to two years of employment history for each borrower. This provision is used as a means of determining the borrower`s financial security and reliability.
In addition, lenders must be aware of all debts for which the borrower may be responsible (in addition to mortgages), such as auto loans, credit card debts, student loans or open collection accounts. Form 1003 also requires a borrower to disclose all monthly household income as well as regular monthly expenses. In addition, the form requires a broken down list of the borrower`s assets and liabilities to determine if they can afford monthly mortgages. Mortgages must be documented as dictated by Fannie Mae and Freddie Mac. Since both companies need to use Form 1003 – or its Freddie Mac equivalent, Form 65 – for each mortgage they plan to purchase, it is easier for lenders to use the corresponding form early than to try to transfer information from a proprietary form to a Form 1003 when it is time to sell the mortgage. Fannie Mae and Freddie Mac purchase mortgages from individual lenders and hold the loans in their own portfolios or sell the loans to other businesses as part of a mortgage guarantee (MBS).