The 1003 mortgage application form is the industry standard form used by nearly all mortgage lenders in the United States. This basic form, or its equivalent, is completed by a borrower when applying for a mortgage loan. While some lenders may use alternative forms or simply accept basic borrower information about their identity, property type, and value, the vast majority of lenders rely on the 1003 form.
Generally, the 1003 form is completed twice during a mortgage transaction: once during the initial application, and again at closing to confirm the terms of the loan. Some lenders allow borrowers to complete the form at home, while others assist borrowers in person or over the phone. In either case, a potential borrower should understand the 1003 format and the information required before completing the form.
The 1003 Loan Application Form
The 1003 loan application form, also called 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 its sibling, the Federal Home Loan Mortgage Corp., or Freddie Mac, are lending enterprises created by U.S. Congress to maintain liquidity in the mortgage market.
- Form 1003 is the standard form completed by borrowers when applying for a mortgage loan.
- Also known as the Uniform Residential Loan Application, the document was developed by Fannie Mae.
- Form 1003 is typically completed twice in the application process: once during the initial application and again at closing.
- A borrower lists all assets and liabilities on the form when attempting to secure a mortgage loan.
- Form 1003 also includes a section for income, including two years of employment history and monthly household income.
Fannie Mae and Freddie Mac purchase mortgages from individual lenders and hold the loans in their own portfolios or sell the loans to other entities as part of a mortgage-backed security (MBS). By selling consumer mortgage debt to these federally-backed entities, lenders maintain the liquidity necessary to continue offering new loans.
Mortgages need to be documented in the way dictated by Fannie Mae and Freddie Mac. As both entities require the use of Form 1003—or its Freddie Mac equivalent, Form 65—for any mortgage they consider for purchase, it is simpler for lenders to use the appropriate form at the outset rather than to try to transfer information from a proprietary form to a 1003 form when it comes time to sell the mortgage.
Income, Assets, and Liabilities
The 1003 form includes all the information a mortgage lender needs to determine whether a potential borrower is worth the risk of the loan. This includes information about the borrower’s identity. While some lenders do not require employment information to consider a new mortgage, the 1003 form calls for up to two years of employment history to be entered for each borrower. This is used as a means of establishing the financial security and reliability of the borrower.
The 1003 form also requires a borrower to disclose total monthly household income, as well as regular monthly expenses. In addition, the form requires an itemized list of the borrower’s assets and liabilities to determine whether he or she can afford monthly mortgage payments.
Borrowers have to complete the 1003 form twice during a mortgage transaction—once during the initial application and again at closing—to confirm the terms of the loan.
Borrower assets include anything that could be used or liquidated to cover loan payments:
- Life insurance policies
- Checking and savings accounts
- Stocks, bonds, mutual funds, or other investments
- IRA, 401(k), or similar retirement accounts
Additionally, lenders need to be aware of any and all debts for which the borrower may be liable (in addition to mortgage payments), such as car loans, credit card debt, student loans, or open collection accounts.
If the borrower owns any other property, either as an investment or a second home, the 1003 form requires the disclosure of these assets and any mortgages that are tied to them.