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SELLER/SERVICER
GUIDE

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SELLER/SERVICER RELATIONSHIP

This segment has content common to both Sellers and Servicers and includes
general contract terms (Series 1000 through 3000).

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1000
GENERAL CONTRACT TERMS

   
   
 * 1100: The Guide
 * 1200: General Freddie Mac Policies
 * 1300: General Responsibilities of the Seller/Servicer
 * 1400: Electronic Transactions
 * 1500: Seller Master Agreements, other Pricing Identifier Terms and Guide Plus
   Additional Provisions
   
   

2000
DOING BUSINESS WITH FREDDIE MAC

   
   
 * 2100: Seller/Servicer Institutional Eligibility
 * 2200: Additional Requirements for Doing Business with Freddie Mac
 * 2300: Disqualification or Suspension of a Seller/Servicer
 * 2400: Access to Freddie Mac Tools and Systems
   
   

3000
RISK MANAGEMENT AND REMEDIES

   
   
 * 3100: Freddie Mac Exclusionary List and FHFA Suspended Counterparty Program
 * 3200: Fraud Prevention, Detection and Reporting; Reporting Other Suspicious
   Activity
 * 3300: Mortgage File Contents and Retention
 * 3400: Quality Control
 * 3500: Freddie Mac Servicer Success Performance and File Reviews
 * 3600: Remedies (Including Repurchase and Termination of Servicing)
   
   

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SELLING

This segment includes requirements applicable to originating, underwriting, and
selling eligible Mortgages (Series 4000 through 6000).

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4000
MORTGAGE ELIGIBILITY

   
   
 * 4100: Uniform Instruments
 * 4200: General Mortgage Eligibility
 * 4300: Loan Purpose
 * 4400: Special Mortgage Eligibility Requirements
 * 4500: Affordable Mortgages and Duty to Serve
 * 4600: Special Freddie Mac Mortgage Products
 * 4700: Insurance Requirements
   
   

5000
ORIGINATION AND UNDERWRITING

   
   
 * 5100: Determining Borrower Eligibility
 * 5200: Credit Assessment
 * 5300: Stable Monthly Income and Asset Qualification Sources
 * 5400: Evaluation of Monthly Obligations
 * 5500: Assets
 * 5600: Property Eligibility and Appraisal Requirements
 * 5700: Property
 * 5800: Uniform Closing Dataset
 * 5900: Automated Income and Asset Assessment with Loan Product Advisor
   
   

6000
SELLING AND DELIVERY

   
   
 * 6100: Cash Program
 * 6200: Guarantor and MultiLender Swap Programs
 * 6300: Delivery of All Mortgages
 * 6400: Nondelivery
   
   

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SERVICING

This segment includes requirements applicable to Servicing Freddie Mac Mortgages
(Series 7000 through 9000).

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7000
TRANSFERS OF SERVICING

   
   
 * 7100: Transfers of Servicing
   
   

8000
SERVICING ALL MORTGAGES

   
   
 * 8100: General Freddie Mac Servicing Policies
 * 8200: Escrow and Insurance
 * 8300: Servicing Performing Loans – Investor Accounting and Remitting
 * 8400: Property Matters
 * 8500: Servicing for Special Mortgages
 * 8600: Servicing Requirements for Senior Subordinate Mortgages
 * 8700: Servicing Requirements for Community Land Trust Mortgages
 * 8800: Servicing Requirements for Cooperative Share Loans
 * 8900: Servicing Requirements for HeritageOne℠ Mortgages
   
   

9000
SERVICING DEFAULT MANAGEMENT

   
   
 * 9100: Delinquencies
 * 9200: Loss Mitigation
 * 9300: Foreclosure
 * 9400: Bankruptcy and Other Litigation Involving Freddie Mac-Owned or
   Guaranteed Mortgages
 * 9500: Selection, Retention and Management of Law Firms for Freddie Mac
   Default Legal Matters
 * 9600: Post-Foreclosure/Real Estate Owned
 * 9700: Reimbursement of Expenses
   
   

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Featured Resources Browse Guide Recent Bulletins Forms & Documents Upcoming
Changes Archives



BULLETIN 2024-1


SELLING

Issued 02/07/2024

   
   
   
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   Download Bulletin 2024-1 [PDF] Guide Updates Spreadsheet [XLS]
   
   
   
   



TO: FREDDIE MAC SELLERS

SUBJECT: SELLING UPDATES

This Guide Bulletin announces:

 * Adequacy and availability of insurance
   
   * Additional specificity regarding Seller/Servicer responsibilities to ensure
     that the Mortgaged Premises is covered by adequate insurance – June 1, 2024

 * Credit underwriting
   
   * Updated age of tax return requirements
   * Updated trust income requirements – May 7, 2024
   * Updated requirements for direct account verifications

 * Asset and income modeler
   
   * Enhancements to automated income assessment with Loan Product Advisor®
     using employed income data

 * Automated collateral evaluation (ACE)
   
   * The availability of ACE appraisal waivers for cash-out refinance Mortgages
     – February 19, 2024
   * New requirements for providing estimated values in Loan Product Advisor –
     June 6, 2024

 * Appraisals
   
   * Updated photo requirements for appraisal reports with interior and exterior
     inspections – June 6, 2024

 * Homeownership education
   
   * An update related to Guide Form 1103, Supplemental Consumer Information
     Form (SCIF), regarding homeownership education

 * Monthly financial reporting requirements
   
   * Updates to monthly financial reporting requirements – April 30, 2024

 * Additional Guide updates
   
   * Further updates as described in the Additional Guide updates section of
     this Bulletin

EFFECTIVE DATE

All of the changes announced in this Bulletin are effective immediately unless
otherwise noted.

ADEQUACY AND AVAILABILITY OF INSURANCE

Effective for Mortgages with Application Received Dates on or after June 1,
2024, but Seller/Servicers are encouraged to implement immediately

At the direction of the FHFA and in alignment with Fannie Mae, Freddie Mac is
updating Guide Sections 4703.2 and 4703.3 to provide more specificity regarding
Seller/Servicer responsibilities to ensure that the Mortgaged Premises is
covered by adequate insurance to promote sustainable homeownership. The updates
include:

 * Specifying that claims must be settled on a replacement cost basis and that
   insurance policies that provide for claims to be settled at actual cash value
   or limit, depreciate, reduce or otherwise settle losses for less than a
   replacement cost basis are not eligible
 * Specifying that the Seller/Servicer must verify the replacement cost value of
   the Mortgaged Premises as of the current insurance policy effective date and
   provide examples of acceptable replacement cost verification sources
 * Deleting coinsurance requirements and references to guaranteed replacement
   cost, extended replacement cost and replacement cost coverage for master
   insurance policies
 * Specifying that policy limits for master condominium and cooperative projects
   must be at least equal to 100% of the replacement cost value of the project’s
   improvements, including Common Elements and residential structures, as of the
   current insurance policy effective date
 * Relocating the placement of the Condominium Association Coverage Form or its
   equivalent requirement for master condominium insurance policies to the
   additional coverage section
 * Updating flood insurance requirements for Condominium Projects to reflect the
   maximum coverage amount available from the National Flood Insurance Program
   per unit, consistent with Planned Unit Development (PUD) and Cooperative
   Project requirements

Guide impacts: Sections 4703.2 and 4703.3

CREDIT UNDERWRITING

AGE OF TAX RETURNS

We have updated the age of tax return requirements as follows:

 * Updated the requirements to reflect dates specific to the 2023 tax year

 * Expanded our requirements to permit alternative documentation in lieu of the
   Internal Revenue Service (IRS) confirmation that tax transcript(s) are not
   yet available for the business tax return(s), as follows:
   
   * Confirmation business tax returns were filed after IRS filing due date for
     the prior year(s) (e.g., 2022 business tax return in file was signed later
     in the year (e.g., October)) or documentation from third-party tax return
     preparer confirming 2023 business return has not yet been filed; and
   * Documented evidence of continued income stability using at least one of the
     examples listed in Section 5304.1(d) in the row labeled “Business and/or
     individual tax return(s) – most recent calendar year not yet available”
 * Specified that for all Mortgages with Note Dates on or after November 1,
   2024, the most recent tax return(s) must be no older than 2023, regardless of
   other factors such as tax filing extension status or IRS tax filing deadline
   relief status

Guide impacts: Sections 5302.4, 5304.1 and 5903.6

Additional resources

Sellers should refer to our FAQs(opens in new window) for additional
information.

TRUST INCOME

Effective for Mortgages with Settlement Dates on or after May 7, 2024, but
Sellers are encouraged to implement immediately

We are updating the trust income requirements as follows:

Requirement type Current requirement Updated requirement History of receipt for
trust income with pre-determined fixed payment History of receipt is not
required Must document receipt of income for the most recent one-year
Documentation of continuance for all trust income types Evidence of sufficient
assets to support the qualifying income (e.g., bank statements, letter from
trustee) Specified that when the Borrower is the trustee, a letter from a
trustee is not acceptable documentation

Guide impact: Section 5305.2

Feedback messages

Loan Product Advisor feedback messages to support this change will be announced
at a future date.

Additional resources

Sellers should refer to our FAQs(opens in new window) for additional
information.

ASSET DOCUMENTATION

Based on Seller feedback, we have updated our requirements for direct account
verifications. With this update, verifications that are generated electronically
by a financial institution are not required to contain the title, signature and
phone number of a representative of the financial institution, which more
closely aligns with the requirements for third-party asset verifications.

Guide impact: Section 5501.3

AUTOMATED INCOME ASSESSMENT WITH LOAN PRODUCT ADVISOR USING EMPLOYED INCOME DATA

We have enhanced automated income assessment with Loan Product Advisor using
employed income data, which is part of asset and income modeler (AIM) and
provides Seller relief from enforcement of certain representations and
warranties related to the Borrower’s income calculation. When submitted to Loan
Product Advisor, data sourced directly from Borrower’s paystub(s) and W-2
form(s) will now be included in the assessment. Representation and warranty
relief eligibility for the income calculation will be included on the Feedback
Certificate.

Guide impacts: Sections 1301.11, 3402.7, 5102.4, 5201.1, 5302.3, 5302.5 and
5901.1 through 5901.5

FEEDBACK MESSAGES

Loan Product Advisor has been updated to incorporate the changes related to AIM,
including feedback message updates(PDF 5mb opens in new window).

ADDITIONAL RESOURCES

We encourage Sellers to access our AIM training resources(opens in new window)
to learn more about AIM for Loan Product Advisor using employed income data.

AUTOMATED COLLATERAL EVALUATION (ACE)

ACE ELIGIBILITY

Effective for Mortgages with Loan Product Advisor submission or resubmission
dates on or after February 19, 2024

Loan Product Advisor will begin offering automated collateral evaluation (ACE)
appraisal waivers for cash-out refinance Mortgages. The maximum loan-to-value
(LTV)/total LTV ratios will be 70% for a cash-out refinance Mortgage secured by
a Primary Residence and 60% for a cash-out refinance Mortgage secured by a
second home.

Guide impact: Section 5602.3

REQUIREMENTS FOR PROVIDING ESTIMATED VALUES IN LOAN PRODUCT ADVISOR

Effective June 6, 2024

For refinance Mortgages, we are updating the Guide to require Sellers to have
written procedures in place that prohibit changes to the estimated property
value in Loan Product Advisor for the purpose of obtaining ACE, ACE+ PDR or more
favorable mortgage terms.

Guide impacts: Sections 5602.3 and 5602.4

APPRAISALS

Effective for Mortgages with appraisal effective dates on or after June 6, 2024

We are updating the photo requirements for appraisal reports with interior and
exterior inspections to include additional interior photos of the subject
property. This update will require more detailed photographs of all living
areas, including all gathering rooms and finished and unfinished basement areas.

Guide impacts: Sections 5604.2 and 5605.8

HOMEOWNERSHIP EDUCATION

In Bulletin 2022-15, we added Form 1103 to the Guide. Because the “Homeownership
Education and Housing Counseling” section of the form must be completed for any
transaction where homeownership education is required, we have added to Section
5103.6, which contains our homeownership education requirements, a reference to
the form.

Guide impact: Section 5103.6

MONTHLY FINANCIAL REPORTING REQUIREMENTS

Effective April 30, 2024; the first report (reflecting data as of April 2024) is
due on May 31, 2024

We are updating Section 2101.5 to require Large Non-Depository Institutions (as
defined in Section 2101.2) and Seller/Servicers separately identified by Freddie
Mac to provide monthly reporting in addition to the quarterly submission of Form
1055, Mortgage Bankers' Financial Reporting Form. The new Form 1055A, Monthly
Mortgage Bankers’ Financial Reporting Short Form, must be electronically
submitted no later than the last day of the month following the end of the
reporting month for the first and second months of each fiscal quarter. The
first submission of Form 1055A, reflecting April 2024 data, is due on May 31,
2024. The form must be certified by the Seller/Servicer’s chief executive
officer, the chief financial officer or equivalent. Seller/Servicers are not
required to provide a monthly report (Form 1055A) for each third month of any
fiscal quarter, as the data will be captured in the quarterly report (Form
1055).

Guide impacts: Section 2101.5 and Form 1055A (new)

ADDITIONAL GUIDE UPDATES

GUIDE CHAPTER 5703 REORGANIZATION

In response to Seller feedback, we have reorganized Chapter 5703, Manufactured
Homes and revised some of the Guide language for added clarity and specificity.
There are no requirement updates associated with this announcement.

Guide impacts

We have reorganized existing Sections 5703.1 through 5703.10 and added new
Sections 5703.11 through 5703.16. In addition, we have updated Sections 1301.11,
3301.2, 3302.2, 4101.2, 4203.4, 4204.2, 4301.6, 4501.3, 4501.6, 4501.10, 4502.5,
4504.5, 4602.4, 4607.3, 4607.6, 4701.1, 5102.1, 5601.2, 5605.7, 5605.9, 5706.4,
5706.7, 6301.6, 7101.7, 8101.12, 9210.3, 9301.9, Exhibits 19 and 25.

GLOSSARY DEFINITION OF “HOME EQUITY LINE OF CREDIT (HELOC)”

We have updated our Glossary definition of “Home Equity Line of Credit (HELOC).”

Guide impact: Glossary

IRS FORM 4506-C

We have specified that the signed IRS Form 4506-C must be retained in the
Mortgage file.

Guide impact: Section 5302.5

GUIDE UPDATES SPREADSHEET

For a detailed list of the Guide updates associated with this Bulletin and the
topics with which they correspond, access the Bulletin 2024-1 (Selling) Guide
Updates Spreadsheet via the Download drop-down available at
https://guide.freddiemac.com/app/guide/bulletin/2024-1.

CONCLUSION

If you have any questions about the changes announced in this Bulletin, please
contact your Freddie Mac representative or call the Customer Support Contact
Center at 800-FREDDIE.

Sincerely,

Kevin Kauffman
Vice President, Single-Family Seller Engagement

[object Object]



Need Help?

Please contact your Freddie Mac Account Representative or the Customer Support
Contact Center

+1-800-FREDDIE

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