Freddie Mac Single-Family Seller/Servicer Guide 4602.3 — Two-Time Close transactions

Freddie Mac Single-Family Seller/Servicer Guide 4602.3 — Two-Time Close transactions

Effective 2026-02-04 · Freddie Mac's stamp for this section

Refer to Bulletin 2025-7, which announced the policy requirements for Uniform Appraisal Dataset (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal® appraisal reports that use UAD 3.6 before the mandatory effective November 2, 2026 version of this section. This section contains requirements related to: ■ Two-Time Close documentation structure ■ Mortgage purpose ■ Appraisal requirements (a) Two-Time Close documentation structure In a Two-Time Close transaction, the terms of the Interim Construction Financing and the terms of the Permanent Financing are documented on separate sets of loan instruments. The Mortgage file must include the Note and Security Instrument for the Permanent Financing, which must be documented on Uniform Instruments in accordance with Chapter 4101. (b) Mortgage purpose The Mortgage must be a “no cash-out” or cash-out refinance Mortgage. (i) “No cash-out” refinance Mortgage “No cash-out” refinance Mortgages must meet the requirements in Section 4301.4, except as stated below. For purposes of Section 4301.4, the amount of the Interim Construction Financing secured by the Mortgaged Premises is considered an amount used to pay off the first Mortgage as described in Section 4301.4. The proceeds of the Permanent Financing may be used to pay off a junior lien(s) secured by the Mortgaged Premises provided the lien(s) were used in their entirety for the construction or renovation of the subject property, as applicable, as documented in the Mortgage file. Paying off unsecured lien(s) or construction costs paid by the Borrower outside of the secured Interim Construction Financing is considered cash out to the Borrower, if above $2,000 or 1% of the loan amount, whichever is greater. (ii) Cash-out refinance Mortgage Cash-out refinance Mortgages must meet the requirements in Section 4301.5. Cash-out refinance Mortgages that are Construction to Permanent Mortgages and Renovation Mortgages must not be secured by Manufactured Homes. At least one Borrower must have been on the title to the land for six months or more prior to the Effective Date of Permanent Financing. Exception: The six-month minimum titling requirement does not need to be met when documentation in the Mortgage file evidences that at least one Borrower inherited or was legally awarded the land in accordance with a final judgment or decision from a legal body (e.g., court, jury, judge or arbitrator) such as in a case of divorce, separation or dissolution of a domestic partnership. (c) Appraisal requirements The Seller must obtain an appraisal report with an interior and exterior inspection. The appraisal report must include an “as completed” value of the property subject to completion of the improvements based on the plans and specifications. The Seller represents and warrants that the originating lender provided the appraiser with all the appraisal information required in Topic 5600, including plans and specifications.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4602.3 — Two-Time Close transactions · source URL · snapshot 4c94f67729042dd6

Freddie Mac Single-Family Seller/Servicer Guide 4602.3 — Two-Time Close transactions — PENDING VERSION, takes effect 2026-11-02

Not yet in force. This is the pending version of the section, which takes effect 2026-11-02. The other version on this page governs until then.

Effective 2026-11-02 · Freddie Mac's stamp for this section

■ Two-Time Close documentation structure ■ Mortgage purpose ■ Appraisal requirements (a) Two-Time Close documentation structure In a Two-Time Close transaction, the terms of the Interim Construction Financing and the terms of the Permanent Financing are documented on separate sets of loan instruments. The Mortgage file must include the Note and Security Instrument for the Permanent Financing, which must be documented on Uniform Instruments in accordance with Chapter 4101. (b) Mortgage purpose The Mortgage must be a “no cash-out” or cash-out refinance Mortgage. (i) “No cash-out” refinance Mortgage “No cash-out” refinance Mortgages must meet the requirements in Section 4301.4, except as stated below. For purposes of Section 4301.4, the amount of the Interim Construction Financing secured by the Mortgaged Premises is considered an amount used to pay off the first Mortgage as described in Section 4301.4. The proceeds of the Permanent Financing may be used to pay off a junior lien(s) secured by the Mortgaged Premises provided the lien(s) were used in their entirety for the construction or renovation of the subject property, as applicable, as documented in the Mortgage file. Paying off unsecured lien(s) or construction costs paid by the Borrower outside of the secured Interim Construction Financing is considered cash out to the Borrower, if above $2,000 or 1% of the loan amount, whichever is greater. (ii) Cash-out refinance Mortgage Cash-out refinance Mortgages must meet the requirements in Section 4301.5. Cash-out refinance Mortgages that are Construction to Permanent Mortgages and Renovation Mortgages must not be secured by Manufactured Homes. At least one Borrower must have been on the title to the land for six months or more prior to the Effective Date of Permanent Financing. Exception: The six-month minimum titling requirement does not need to be met when documentation in the Mortgage file evidences that at least one Borrower inherited or was legally awarded the land in accordance with a final judgment or decision from a legal body (e.g., court, jury, judge or arbitrator) such as in a case of divorce, separation or dissolution of a domestic partnership. (c) Appraisal requirements The Seller must obtain a Traditional Appraisal Report, which must include an “as completed” value of the property subject to completion of the improvements based on the plans and specifications. The Seller represents and warrants that the originating lender provided the appraiser with all the appraisal information required in Topic 5600, including plans and specifications.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4602.3 — Two-Time Close transactions · source URL · snapshot 4c94f67729042dd6