Freddie Mac Single-Family Seller/Servicer Guide Section 4201.12 — Second home Mortgages

Freddie Mac Single-Family Seller/Servicer Guide Section 4201.12 — Second home Mortgages

4201.12: Second home Mortgages (03/04/26) Mortgages secured by second homes are eligible for sale to Freddie Mac in accordance with the requirements of this section. This section contains: ■ Eligibility requirements ■ Special underwriting requirements ■ Uniform Instrument requirements Freddie Mac Single-Family Seller/Servicer Guide Chapter 4201 As of 03/04/26 Page 4201-9 ■ Credit Fees (a) Eligibility requirements The following eligibility requirements apply to second home Mortgages: ■ The Mortgage must be an Accept Mortgage ■ The Mortgage must be secured by a 1-unit property ■ The Borrower must occupy the second home for some portion of the year ■ The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower’s personal use and enjoyment ■ The Borrower may rent the property on a short-term basis provided that the property is not subject to any rental pools or agreements that require the Borrower to rent the property, give a management company or entity control over the occupancy of the property or involve revenue sharing between any owners and the developer or another party ■ The Mortgaged Premises must be in such a location to function reasonably as a second home ■ The second home must be suitable for year-round occupancy. Exception: A second home with seasonal limitations on year-round occupancy (e.g., lack of winter accessibility) is eligible if the appraiser includes at least one comparable sale with similar seasonal limitations to demonstrate the marketability of the subject property. See Section 5601.1 for property eligibility requirements. ■ The property must not be subject to any timesharing or other shared ownership arrangement Freddie Mac’s determination of whether a property is a second home is conclusive. A 2-unit property used as a second home is considered an Investment Property and must meet all of the requirements of Section 4201.13. (b) Special underwriting requirements (i) Maximum number of financed properties Each Borrower individually and all Borrowers collectively must not be obligated on (e.g., Notes, land contracts and/or any other debt or obligation) more than 10 1- to 4-unit financed properties, including the subject property and the Borrower’s Primary Freddie Mac Single-Family Seller/Servicer Guide Chapter 4201 As of 03/04/26 Page 4201-10 Residence. Examples of financed properties that do not have to be counted in these limitations include: ■ Commercial real estate ■ Multifamily (five or more units) real estate ■ Timeshares ■ Undeveloped land ■ Manufactured homes not titled as real property (chattel lien), unless the property is situated on the land that is titled as real property ■ Property titled in the name of the Borrower’s business if the Borrower, in their individual capacity, is not obligated on Notes, land contracts and/or any debt or obligation related to such property ■ Property titled in the name of a trust where the Borrower is a trustee if the Borrower, in their individual capacity, is not obligated on Notes, land contracts and/or any debt or obligation related to such property (ii) Asset eligibility and reserve requirements for second home Mortgages All funds used to qualify the Borrower for the Mortgage, which includes any funds required to be paid by the Borrower and Borrower reserves, must be Borrower personal funds, as described in Section 5501.3, or other Borrower funds, as described in Section 5501.4, except for the following: ■ Pooled funds ■ Gift funds received as a wedding and/or graduation gift ■ Gifts or grants from an Agency ■ Employer Assisted Homeownership (EAH) Benefits The reserves requirements in Section 5501.2 must be met. (iii) Rental income from a second home Rental income generated from the Borrower’s second home may not be used as stable monthly income. (iv) Borrower’s monthly housing expense-to-income ratio Freddie Mac Single-Family Seller/Servicer Guide Chapter 4201 As of 03/04/26 Page 4201-11 The monthly housing expense related to a Borrower’s current Primary Residence must be used in calculating the Borrower’s monthly housing expense-to-income ratio. (v) Monthly payment amount on the second home The monthly payment amount (as described in Section 5401.2(b)(8)) on the second home must be considered in calculating the Borrower’s monthly debt payment-to-income ratio. (vi) Newly constructed homes For purchases of newly constructed homes, the Borrower may not be affiliated with or related to the builder, developer or the property seller. For these purposes, “affiliated with” means that the Borrower may not have an ownership interest in or employment with the builder, developer or property seller. (c) Uniform Instrument requirements Form 3890, Multistate Second Home Rider, is required for all Mortgages secured by second homes. (d) Credit Fees The Seller must refer to Exhibit 19, Credit Fees, for Credit Fees related to second home Mortgages. Credit Fees are paid in accordance with the Credit Fee provisions stated in Chapter 6303.

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