Freddie Mac Single-Family Seller/Servicer Guide §4405.1 — Energy conservation improvements (05/01/19)
Freddie Mac Guide §4405.1 (Energy conservation improvements). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §4405.1 — Energy conservation improvements (05/01/19) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Guide 4405.1
Effective May 1, 2019, this section is deleted. See Chapter 4606 for requirements for GreenCHOICE Mortgages®.
Freddie Mac Guide 4405.1
406-1 Chapter 4406: Mortgages Secured by Properties Subject to Resale Restrictions
Freddie Mac Guide 4405.1
Eligibility and underwriting requirements for Mortgages secured by properties subject to resale restrictions (02/04/26) Mortgages secured by properties subject to resale restrictions, including income-based resale restrictions and age-based resale restrictions (such as senior housing or units restricted to one or more occupants aged 55 and over), are eligible for sale to Freddie Mac provided they meet the requirements of this chapter and the Seller’s other Purchase Documents. Note: The requirements of this chapter do not apply to resale restrictions related to Community Land Trust Mortgages. See Chapter 4502 for requirements for Community Land Trust Mortgages. This section contains requirements related to: ■ Eligible Mortgages ■ Ineligible Mortgages ■ Underwriting (a) Eligible Mortgages For Mortgages secured by properties subject to resale restrictions, each Mortgage must be a First Lien, conventional Mortgage. (b) Ineligible Mortgages The following Mortgages are ineligible for sale to Freddie Mac if the property securing the Mortgage is subject to income-based resale restrictions: ■ CHOICERenovation® Mortgages ■ Construction to Permanent Mortgages ■ GreenCHOICE Mortgages® ■ Renovation Mortgages
Freddie Mac Guide 4405.1
406-2 Additionally, the following Mortgages are ineligible for sale to Freddie Mac if the property securing the Mortgage is subject to income-based resale restrictions that terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure: ■ Financed Permanent Buydown Mortgages ■ Freddie Mac Enhanced Relief Refinance® Mortgages ■ Government Mortgages ■ Mortgages with capitalized balances (as described in Chapter 4403) ■ Seller-Owned Converted Mortgages ■ Seller-Owned Modified Mortgages (c) Underwriting For Mortgages secured by properties subject to resale restrictions, the Mortgage must be an Accept Mortgage or a Manually Underwritten Mortgage.
Freddie Mac Guide 4405.1
Eligibility and underwriting requirements for Mortgages secured by properties subject to resale restrictions (Future effective date 07/01/26) Mortgages secured by properties subject to resale restrictions, including income-based resale restrictions and age-based resale restrictions (such as senior housing or units restricted to one or more occupants aged 55 and over), are eligible for sale to Freddie Mac provided they meet the requirements of this chapter and the Seller’s other Purchase Documents. Note: The requirements of this chapter do not apply to resale restrictions related to Community Land Trust Mortgages. See Chapter 4502 for requirements for Community Land Trust Mortgages. This section contains requirements related to: ■ Eligible Mortgages ■ Ineligible Mortgages ■ Underwriting
Freddie Mac Guide 4405.1
406-3 (a) Eligible Mortgages For Mortgages secured by properties subject to resale restrictions, each Mortgage must be a First Lien, conventional Mortgage. (b) Ineligible Mortgages The following Mortgages are ineligible for sale to Freddie Mac if the property securing the Mortgage is subject to income-based resale restrictions: ■ CHOICERenovation® Mortgages ■ Construction to Permanent Mortgages ■ GreenCHOICE Mortgages® ■ Renovation Mortgages Additionally, the following Mortgages are ineligible for sale to Freddie Mac if the property securing the Mortgage is subject to income-based resale restrictions that terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure: ■ Financed Permanent Buydown Mortgages ■ Freddie Mac Enhanced Relief Refinance® Mortgages ■ Government Mortgages ■ Seller-Owned Converted Mortgages ■ Seller-Owned Modified Mortgages (c) Underwriting For Mortgages secured by properties subject to resale restrictions, the Mortgage must be an Accept Mortgage or a Manually Underwritten Mortgage.
Freddie Mac Guide 4405.1
Resale restriction requirements for Mortgages secured by properties subject to resale restrictions (12/04/24) For Mortgages secured by properties subject to resale restrictions, there are no limits on the time period in which the resale restrictions may remain in place on the property. The resale restrictions may be in effect (i.e., survive) for a certain number of years or continue in perpetuity. The resale restrictions must be binding on current and subsequent property owners, and survive until they are formally removed or modified, or terminate automatically in accordance with their terms such as: ■ Upon completion of foreclosure, which includes the expiration of any applicable legally required foreclosure redemption period, or recordation of a deed-in-lieu of foreclosure, and ■ If necessary, upon recordation of the associated deed transferring the property to Freddie Mac or a third-party purchaser Additionally, the resale restrictions must be: ■ In compliance with all federal, State and local laws, rules and regulations, and ■ Stated in a separate covenant, restriction, easement, or condition in a deed or other instrument executed by or on behalf of the owner of the land or property and recorded against that land or property The resale restrictions may be administered by a subsidy provider or program administrator. Borrowers must meet any program eligibility requirements established by the subsidy provider or program administrator, if applicable. Note: For more information on requirements regarding foreclosure redemption periods, see Chapter 9301.
Freddie Mac Guide 4405.1
Payment of financial obligation requirements for Mortgages secured by properties subject to resale restrictions (12/04/24) If applicable, recurring monthly payments associated with the financial subsidy that was provided when the property subject to resale restrictions was purchased by the Borrower must be included in the monthly housing expense.
Freddie Mac Guide 4405.1
406-5 Any term included in the resale restricted covenants requiring the owner of a property subject to resale restrictions to make payments under certain circumstances or requiring repayment of the financial subsidy, in whole or in part, must state that the payment obligation is subordinate to the First Lien Mortgage.
Freddie Mac Guide 4405.1
Appraisal requirements for Mortgages secured by properties subject to resale restrictions (02/04/26) This section contains requirements related to: ■ Appraisal report conditions ■ Appraisal reports when resale restrictions survive foreclosure or recordation of a deed-in-lieu of foreclosure ■ Appraisal reports when resale restrictions terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure (a) Appraisal report conditions For properties subject to resale restrictions, the appraisal report must: ■ Note the existence of any resale restrictions, and ■ Include an analysis that addresses any impact the resale restrictions have on the property’s value or marketability Mortgages secured by properties subject to age-based resale restrictions may qualify for automated collateral evaluation (ACE) or ACE+ PDR. See Section 5602.3 for details regarding ACE or Section 5602.4 for ACE+ PDR. (b) Appraisal reports when resale restrictions survive foreclosure or recordation of a deed- in-lieu of foreclosure For Mortgages secured by properties subject to resale restrictions that survive foreclosure or recordation of a deed-in-lieu of foreclosure, the appraisal report must: ■ Reflect the impact the resale restrictions have on the subject property’s value, and ■ When available, be supported by comparable sales with similar resale restrictions If recent comparable sales with similar resale restrictions are not available in the Market Area, the appraiser should: