Chapter 4: Uniform Residential Loan Application (Form 1003)
Overview
The Uniform Residential Loan Application (URLA), also
known as Form 1003, is the foundational document used in the mortgage
loan process. It captures all essential borrower information for loan approval.
Both Fannie Mae and Freddie Mac use this form to collect data
consistently.
1. Purpose of Form 1003
- Acts
as a formal loan request by the borrower.
- Helps
underwriters evaluate the borrower’s financial picture.
- Collects
personal, financial, employment, income, asset, liability, and property
details.
2. Structure of the URLA (New Redesigned Format as of
March 2021)
Form 1003 is structured into the following sections:
Section 1: Borrower Information
- Personal
details: Name, SSN, DOB, marital status
- Citizenship/residency
status
- Language
preference (optional)
Section 2: Financial Information — Assets and Liabilities
- Asset
accounts: Checking, savings, investments
- Liabilities:
Credit cards, auto loans, student loans
Section 3: Financial Information — Real Estate
- Details
of properties owned
- Monthly
income, expenses, and mortgages on other properties
Section 4: Loan and Property Information
- Loan
amount, purpose (purchase/refinance), and type
- Property
address, intended occupancy (primary/secondary/investment)
Section 5: Declarations
- Details
on financial obligations
- Past
bankruptcies, foreclosures, judgments, lawsuits
Section 6: Acknowledgments and Agreements
- Legal
agreements signed by borrower
- Understanding
of loan terms and consent to verify information
Section 7: Military Service (if applicable)
- Military
status and eligibility for VA loans
Section 8: Demographic Information
- Government
monitoring info (ethnicity, race, gender) for HMDA compliance
Section 9: Loan Originator Information
- Details
about the loan officer and their company
3. Key Considerations for Underwriters
- Cross-verify
with supporting docs: W2s, paystubs, bank statements.
- Confirm
no inconsistencies in liabilities or assets.
- Verify
occupancy intent for property.
- Pay
attention to red flags (e.g., assets don’t match income level).
4. Common Issues Found in Form 1003
|
Area |
Red Flag |
|
Employment info |
Gaps in employment, unverifiable employer |
|
Income vs. Assets |
High income but very low/no savings |
|
Declarations |
Not disclosing legal judgments or debts |
|
Property Use |
Marked as primary residence but lives elsewhere |
|
Signature Issues |
Unsigned or undated URLA |
5. Best Practices
- Always
cross-check with credit report, income, and asset docs.
- Ensure
borrower signs and dates the form.
- Review
all schedules if borrower owns businesses or rentals.
- Update
1003 if material changes occur before closing.
6. Digital 1003
- Many
lenders now accept e-1003 via digital portals.
- Reduces
errors, speeds up processing.
- Auto-integrates
data into underwriting systems.
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