Freddie Mac Single-Family Seller/Servicer Guide Section 5501.7 — Lender contributions

Freddie Mac Single-Family Seller/Servicer Guide Section 5501.7 — Lender contributions

5501.7: Lender contributions (09/03/25) This section contains information related to: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-43 ■ Lender credit: definition and requirements ■ Lender incentive: definition and requirements (a) Lender credit: definition and requirements Lender credit is a contribution by the originating lender toward the Borrower’s Closing Costs. Lender credit must meet all of the following requirements: ■ The amount of lender credit must: ❑ Be derived from an increase in the interest rate (i.e., premium pricing), or ❑ Be funded directly by the lender ■ Lender credit must not require repayment ■ Third party funds must not be used to provide a lender credit ■ Lender credit may only be used as a credit towards the Borrower’s Closing Costs. In the event the lender credit exceeds the amount of the Borrower’s Closing Costs, the following requirements apply: ❑ The lender credit must be reduced so it does not exceed the amount of the Borrower’s Closing Costs, or ❑ The amount of the lender credit that exceeds the Borrower’s Closing Costs must be applied as a principal curtailment to the Mortgage and must be clearly reflected on the Settlement/Closing Disclosure Statement. (See Section 6302.32 for delivery requirements for Mortgages with principal curtailments.) ■ Lender credit derived from an increase in the interest rate (i.e., premium pricing) must not be used as a credit towards funding a temporary subsidy buydown plan on a “no cash- out” refinance Mortgage (b) Lender incentive: definition and requirements Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-44 A lender incentive is a cash or a cash-like contribution (e.g., a gift card), or other item of value that is: ■ Provided by the originating lender to the Borrower, directly or through a third party, and ■ Not a lender credit toward the Borrower’s Closing Costs Mortgages with lender incentives, as described above, are eligible for sale to Freddie Mac if they meet the following requirements, regardless of whether the incentive is provided before, on or after the Note Date: ■ No repayment of the incentive may be required ■ The cost or value of the incentive must not be funded through the Mortgage transaction (e.g., premium pricing) ■ The incentive must not be considered when qualifying the Borrower (e.g., as a source of funds for closing or reserves) ■ The lender incentive must be treated as a sales concession as described in Section 5501.6(c) if the originating lender is, or is affiliated with, an interested party to the transaction Note: A lender incentive is not considered cash out to the Borrower and does not have to be included in the calculation of the Mortgage proceeds, including the calculation of cash back to the Borrower. 5501.8: Automated asset assessment with Loan Product Advisor® using account data (09/03/25) This section contains: ■ Overview ■ Eligible and ineligible asset types and other sources of funds ■ Underwriting requirements ■ Data submission requirements, representation and warranty relief eligibility and documentation requirements Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-45 (a) Overview Representation and warranty relief eligibility is contingent on the Seller’s compliance with the requirements of this section. Asset and income modeler (AIM) automated asset assessment using account data provides Sellers with the option to use Loan Product Advisor® to determine whether a Seller is eligible for relief from enforcement of certain representations and warranties related to the Borrower’s assets. The Seller must obtain the Borrower’s account data and submit all required data and information to Loan Product Advisor. Based on the data submitted, Loan Product Advisor will assess for representation and warranty relief eligibility and return the results of the assessment on the Feedback Certificate. (b) Eligible and ineligible asset types and other sources of funds The following table describes eligible and ineligible asset types and other sources of funds for an automated asset assessment using account data: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-46 Eligible and ineligible asset types and other sources of funds for an automated asset assessment Eligible asset type Ineligible sources of funds The following asset types as described in Section 5501.3: ■ Depository accounts ■ Borrower’s business checking, savings and/or money market accounts. (See Section 5304.1(l) for additional requirements.) ■ Securities ■ Retirement accounts The Mortgage must not be a Mortgage for which any of the following are being used to qualify the Borrower: ■ Cash on hand ■ Assets that will be used by the Borrower for repayment of Borrower’s monthly obligations as described in Section 5307.1 The following other eligible sources of funds as described in Section 5501.4: ■ Gift funds or a gift of equity ■ Gift funds received as a wedding gift ■ Gift funds received as a graduation gift ■ A gift or grant from an Agency (c) Underwriting requirements (i) General underwriting requirements For each verification report obtained, the Seller must confirm: ■ Each asset on the verification report is owned by at least one Borrower and such Borrower has access to the funds in the asset account ■ All assets shown on the verification report are in U.S. dollars located in a U.S.- or State-regulated financial institution ■ There are no outstanding loans secured by any of the asset accounts included on the verification report Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-47 (ii) Age of documentation For the age of the documentation, the expiration date of the verification report reflected on the Last Feedback Certificate complies with the requirements in Section 5102.4. (d) Data submission requirements, representation and warranty relief eligibility and documentation requirements (i) Data submission requirements For Mortgages with an automated asset assessment using Loan Product Advisor, the Seller must: ■ Submit the most current account data to Loan Product Advisor. If, after the initial submission, the Seller obtains an updated verification report, the Seller must resubmit the account data to Loan Product Advisor. ■ Investigate and resolve any inconsistent or contradictory information between the verification report, information contained in Form 65, Uniform Residential Loan Application (including the Borrower’s asset representations), and the Mortgage file and, if applicable, resubmit to Loan Product Advisor with the correct information ■ Verify any funds required for the Mortgage transaction that are not included in the “Total Funds to be Verified” amount (e.g., Borrower is selling a property and needs to bring funds to the closing) and maintain the documentation in the Mortgage file (ii) Representation and warranty relief results on Feedback Certificate If multiple Loan Product Advisor submissions are made, Seller’s eligibility for representation and warranty relief will be based on the results on the Last Feedback Certificate. When asset representation and warranty eligibility results are provided on the Last Feedback Certificate, the representation and warranty relief available is described in the following table: Asset representation and warranty relief based on Feedback Certificate result Eligibility result Representation and warranty relief Eligible The Seller is relieved from enforcement of the following representations and warranties: 1. Sufficiency of the Borrower’s assets to cover the “Total Funds to be Verified” amount indicated on the Last Feedback Certificate, and Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-48 Asset representation and warranty relief based on Feedback Certificate result Eligibility result Representation and warranty relief 2. Accuracy and integrity of the data on the verification report Partial The Seller is relieved from enforcement of the following representations and warranties contingent on Seller documenting additional requirements as indicated in feedback messages and the documentation requirements in Section 5501.8(d)(iii) below: 1. Sufficiency of the Borrower’s assets to cover the “Total Funds to be Verified” amount indicated on the Last Feedback Certificate, and 2. Accuracy and integrity of the data on the verification report Not eligible The Seller is not eligible for relief from enforcement of representations and warranties related to the Borrower’s assets. Unavailable The Seller is not eligible for relief from enforcement of representations and warranties related to the Borrower’s assets. (iii)Documentation requirements based on representation and warranty relief result on Feedback Certificate When asset representation and warranty eligibility results are provided on the Last Feedback Certificate, the documentation requirements are described in the following table: Documentation requirements based on representation and warranty relief result on the Feedback Certificate Eligibility result Asset documentation requirements Eligible The verification report must be maintained in the Mortgage file. Partial The verification report must be maintained in the Mortgage file. Gift funds, grant funds, securities and retirement accounts must comply with the documentation requirements in Sections 5501.3 and 5501.4. The verification report is acceptable documentation to identify evidence of receipt of gift funds and grants from Agencies. Not eligible The assets must be verified and documented as required by the Guide. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-49 Documentation requirements based on representation and warranty relief result on the Feedback Certificate Eligibility result Asset documentation requirements Unavailable The assets must be verified and documented as required by the Guide. (iv) “Large deposits” verification requirements For purchase transactions, Loan Product Advisor will issue feedback messaging identifying the amount of “large deposits” for which the Seller must document the source of funds. When a “large deposit” is identified by Loan Product Advisor but is composed of multiple items, the Seller must evaluate each item to determine whether it meets the definition of a “large deposit” (as described in Section 5501.1). If an item is not a “large deposit”, the Seller does not need to document the source of funds. For “large deposits” identified in the Borrower’s business checking, savings and/or money market accounts, the requirements in Section 5501.3(m) apply. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-1 Chapter 5601: Property Eligibility

Source: Freddie Mac Single-Family Seller/Servicer Guide Section 5501.7 — Lender contributions · source URL · snapshot 5869ee9e606cd4ae