Freddie Mac Single-Family Seller/Servicer Guide Section 5701.7 — Exempt From Review

Freddie Mac Single-Family Seller/Servicer Guide Section 5701.7 — Exempt From Review

5701.7: Exempt From Review (05/06/26) This section contains: ■ Eligible Mortgages ■ Condominium Project eligibility ■ General project eligibility requirements ■ Additional requirements To be eligible under Exempt From Review, the requirements below must be met. (a) Eligible Mortgages The Mortgage must be one of the following: ■ Secured by a Condominium Unit in a 2- to 4-Unit Condominium Project ■ Secured by a Condominium Unit in a 5- to 10-Unit Condominium Project that is not part of a Master Association ■ Secured by a Detached Condominium Unit ■ A Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgage; or ■ A Refi Possible® Mortgage (b) Condominium Project eligibility The Condominium Project must meet the following: ■ Not be a Condominium Hotel or similar type of transient housing, a houseboat project, a timeshare project, or a project with segmented ownership (all as described in Section 5701.3) ■ Not include Manufactured Homes, unless the Condominium Unit Mortgage is a Refi Possible Mortgage ■ For Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages and Refi Possible Mortgages, the Condominium Project is not in need of Critical Repairs and does not have an evacuation order. (See Sections 5701.3(n) and 5701.3(o) for details.) Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-56 ■ Not be the subject of any action that would cause the Condominium Project to cease to exist and not be the subject of an insolvency proceeding. (See Section 5701.3(p) for details.) (c) General project eligibility requirements The general project eligibility requirements in Section 5701.2(b) must be met. Additionally, attached and semi detached units within projects containing Detached Condominium Units may not be delivered as Exempt From Review unless: ■ They are within a 2- to 4-Unit Condominium Project ■ They are within a 5- to 10-Unit Condominium Project that is not part of a Master Association; or ■ They meet the requirements for Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages or Refi Possible Mortgages (d) Additional requirements The following table outlines additional requirements that must be met based on the type of Condominium Project or Condominium Unit Mortgage: Additional requirements by Condominium Project or Condominium Unit Mortgage type Project/Mortgage type Requirements 2- to 4-Unit Condominium Projects The Condominium Project must meet the Glossary definition of a 2- to 4-Unit Condominium Project. Note: The Glossary definitions of Established Condominium Project and New Condominium Project are not applicable. 5- to 10-Unit Condominium Projects The Condominium Project must meet the Glossary definition of a 5- to 10-Unit Condominium Project. Note: The Glossary definitions of Established Condominium Project and New Condominium Project are not applicable. Detached Condominium Units The Condominium Unit securing the Condominium Unit Mortgage must meet the Glossary definition of a Detached Condominium Unit. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-57 Additional requirements by Condominium Project or Condominium Unit Mortgage type Project/Mortgage type Requirements Freddie Mac-owned “no cash- out” refinance Condominium Unit Mortgages If the Condominium Unit Mortgage being refinanced is currently owned by Freddie Mac in whole or in part or securitized by Freddie Mac, then the Mortgage is exempt from project review provided the following requirements are met: ■ The maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio is 80% ■ If available, proof of the ULDD Data Point Related Investor Loan Identifier of the existing Condominium Unit Mortgage is provided in the Mortgage file ■ The delivery requirements in Section 6302.16(b)(ii) are met Refi Possible Mortgages If the Condominium Unit Mortgage being refinanced is currently owned by Freddie Mac in whole or in part or securitized by Freddie Mac and the Mortgage is being refinanced under the Refi Possible offering, then the Mortgage is exempt from project review provided that: ■ The Mortgage meets all applicable requirements for Refi Possible Mortgages in Chapter 4302 ■ The delivery requirements in Section 6302.46 are met Note: If the requirements for Exempt from review in this Section 5701.7 are met, then the Seller is not required to comply with the requirements for any of the other project review types in Sections 5701.4 (Streamlined review), 5701.5 (Established Condominium Project reviews), 5701.6 (New Condominium Project reviews) and 5701.9 (Reciprocal project reviews). 5701.7: Exempt From Review (Future effective date 08/03/26) Effective for Mortgages with Application Received Dates on or after August 3, 2026. This section contains: ■ Eligible Mortgages Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-58 ■ Condominium Project eligibility ■ General project eligibility requirements ■ Additional requirements To be eligible under Exempt From Review, the requirements below must be met. (a) Eligible Mortgages The Mortgage must be one of the following: ■ Secured by a Condominium Unit in a 2- to 4-Unit Condominium Project ■ Secured by a Condominium Unit in a 5- to 10-Unit Condominium Project that is not part of a Master Association ■ Secured by a Detached Condominium Unit ■ A Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgage; or ■ A Refi Possible® Mortgage (b) Condominium Project eligibility The Condominium Project must meet the following: ■ Not be a Condominium Hotel or similar type of transient housing, a houseboat project, a timeshare project, or a project with segmented ownership (all as described in Section 5701.3) ■ Not include Manufactured Homes, unless the Condominium Unit Mortgage is a Refi Possible Mortgage ■ For Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages and Refi Possible Mortgages, the Condominium Project is not in need of Critical Repairs and does not have an evacuation order. (See Sections 5701.3(n) and 5701.3(o) for details.) ■ Not be the subject of any action that would cause the Condominium Project to cease to exist and not be the subject of an insolvency proceeding. (See Section 5701.3(p) for details.) (c) General project eligibility requirements The general project eligibility requirements in Section 5701.2(b) must be met. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-59 Additionally, attached and semi detached units within projects containing Detached Condominium Units may not be delivered as Exempt From Review unless: ■ They are within a 2- to 4-Unit Condominium Project ■ They are within a 5- to 10-Unit Condominium Project that is not part of a Master Association; or ■ They meet the requirements for Freddie Mac-owned “no cash-out” refinance Condominium Unit Mortgages or Refi Possible Mortgages (d) Additional requirements The following table outlines additional requirements that must be met based on the type of Condominium Project or Condominium Unit Mortgage: Additional requirements by Condominium Project or Condominium Unit Mortgage type Project/Mortgage type Requirements 2- to 4-Unit Condominium Projects The Condominium Project must meet the Glossary definition of a 2- to 4-Unit Condominium Project. Note: The Glossary definitions of Established Condominium Project and New Condominium Project are not applicable. 5- to 10-Unit Condominium Projects The Condominium Project must meet the Glossary definition of a 5- to 10-Unit Condominium Project. Note: The Glossary definitions of Established Condominium Project and New Condominium Project are not applicable. Detached Condominium Units The Condominium Unit securing the Condominium Unit Mortgage must meet the Glossary definition of a Detached Condominium Unit. Freddie Mac-owned “no cash- out” refinance Condominium Unit Mortgages If the Condominium Unit Mortgage being refinanced is currently owned by Freddie Mac in whole or in part or securitized by Freddie Mac, then the Mortgage is exempt from project review provided the following requirements are met: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-60 Additional requirements by Condominium Project or Condominium Unit Mortgage type Project/Mortgage type Requirements ■ The maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio is 80% ■ If available, proof of the ULDD Data Point Related Investor Loan Identifier of the existing Condominium Unit Mortgage is provided in the Mortgage file ■ The delivery requirements in Section 6302.16(b)(ii) are met Refi Possible Mortgages If the Condominium Unit Mortgage being refinanced is currently owned by Freddie Mac in whole or in part or securitized by Freddie Mac and the Mortgage is being refinanced under the Refi Possible offering, then the Mortgage is exempt from project review provided that: ■ The Mortgage meets all applicable requirements for Refi Possible Mortgages in Chapter 4302 ■ The delivery requirements in Section 6302.46 are met Note: If the requirements for Exempt from review in this Section 5701.7 are met, then the Seller is not required to comply with the requirements for any of the other project review types in Sections 5701.5 (Established Condominium Project reviews), 5701.6 (New Condominium Project reviews) and 5701.9 (Reciprocal project reviews). 5701.8: Condominium appraisal and underwriting requirements (01/26/26) 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 Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-61 reports that use UAD 3.6 before the mandatory effective November 2, 2026 version of this section. This section contains: ■ Appraisal requirements for Condominium Units ■ Underwriting considerations for Condominium Projects with mixed uses and Condominium Projects with live-work Condominium Units ■ Underwriting considerations for Common Elements and Amenities ■ Financing of Limited Common Elements (a) Appraisal requirements for Condominium Units (i) General appraisal requirements The appraiser must report: ■ The project name ■ The assessments, including special assessments; and ■ The property rights for each comparable sale and compare them to the subject project The appraiser must also identify the Common Elements including the Amenities available to the unit owners, comment on their condition and analyze how they compare to the Common Elements and Amenities of competing projects. Comparable sales must be from similar Condominium Projects in the same market and compete for the same purchasers. (ii) Comparable sales selection Refer to Section 5605.6(g) for specific requirements applicable to units in Established Condominium Projects or in recently converted or New Condominium Projects. (iii) Additional appraisal requirements for Detached Condominium Units The appraiser should use similar Detached Condominium Unit comparable sales from the same project or from the same Market Area. The appraiser may use other types of 1-unit detached comparable sales that are not located in a Condominium Project if the appraiser supports the use of such sales in the Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-62 appraisal report and reflects any effect that the condominium form of ownership has on the market value and marketability of the subject property. Each appraisal report must comply with the appraisal requirements in Sections 5604.1 and 5604.2 and Chapter 5605. (b) Underwriting considerations for Condominium Projects with mixed uses and Condominium Projects with live-work Condominium Units (i) Condominium Projects with mixed uses Freddie Mac will purchase eligible Condominium Mortgages in Condominium Projects with a combination of residential, commercial, industrial, office and/or institutional uses provided that the Condominium Mortgages comply with all applicable Freddie Mac requirements, including the Condominium Project review and general Condominium Project eligibility requirements of Section 5701.2 and the project with excessive commercial or non-residential space requirements in Section 5701.3(d). (ii) Live-work Condominium Units Freddie Mac will purchase eligible Condominium Mortgages in Condominium Projects with live-work Condominium Units provided that: ■ The Condominium Mortgage complies with all applicable Freddie Mac requirements, including the Condominium Project review and general Condominium Project eligibility requirements of Section 5701.2; and ■ The primary use of the live-work Condominium Unit is residential and the non- residential use of such Condominium Unit is secondary (c) Underwriting considerations for Common Elements and Amenities The project’s Common Elements, including Amenities and Limited Common Elements, must be consistent with the nature of the project and similar to those found in competing Condominium Projects within the Market Area. (d) Financing of Limited Common Elements Limited Common Elements are portions of Common Elements reserved for use by one or more unit owners but not all unit owners. They are defined in the Project Documents and may include, but are not limited to, balconies or patios serving a single unit, assigned parking spaces or storage bins. Limited Common Elements that are purchased as part of the Condominium Unit may be financed as part of the Mortgage, and the cost of such Limited Common Elements may be included when determining the sale price and loan-to-value (LTV) ratio. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-63 Only Limited Common Elements may be financed along with the Condominium Unit. Facilities serving the Condominium Unit which are made available to the Condominium Unit by a permit, license or lease (other than in a leasehold condominium), must not be financed as part of a Mortgage, and the cost of the use of such facilities may not be included when determining the sale price and LTV ratio. 5701.8: Condominium appraisal report and underwriting requirements (Future effective date 11/02/26) This section contains: ■ Appraisal report requirements for Condominium Units ■ Underwriting considerations for Condominium Projects with mixed uses and Condominium Projects with live-work Condominium Units ■ Underwriting considerations for Common Elements and Amenities ■ Financing of Limited Common Elements (a) Appraisal report requirements for Condominium Units (i) General appraisal report requirements The appraisal report must identify the project information for the subject property including, but not limited to: ■ The project name ■ The monthly fee ■ The common Amenities/services The appraisal report must include a comparison of the subject property’s project information to the comparable projects and include any project-related adjustments. (ii) Comparable sales selection Refer to Section 5605.7(f) for specific requirements applicable to units in Established Condominium Projects or in recently converted or New Condominium Projects. (iii) Additional appraisal report requirements for Detached Condominium Units Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-64 The appraisal report should include similar Detached Condominium Unit comparable sales from the same project or from the same Market Area. The appraiser may use other types of 1-unit detached comparable sales that are not located in a Condominium Project if the appraiser supports the use of such sales in the appraisal report and reflects any effect that the condominium form of ownership has on the market value and marketability of the subject property. Each appraisal report must comply with the appraisal requirements in Sections 5604.1 and 5604.2 and Chapter 5605. (b) Underwriting considerations for Condominium Projects with mixed uses and Condominium Projects with live-work Condominium Units (i) Condominium Projects with mixed uses Freddie Mac will purchase eligible Condominium Mortgages in Condominium Projects with a combination of residential, commercial, industrial, office and/or institutional uses provided that the Condominium Mortgages comply with all applicable Freddie Mac requirements, including the Condominium Project review and general Condominium Project eligibility requirements of Section 5701.2 and the project with excessive commercial or non-residential space requirements in Section 5701.3(d). (ii) Live-work Condominium Units Freddie Mac will purchase eligible Condominium Mortgages in Condominium Projects with live-work Condominium Units provided that: ■ The Condominium Mortgage complies with all applicable Freddie Mac requirements, including the Condominium Project review and general Condominium Project eligibility requirements of Section 5701.2; and ■ The primary use of the live-work Condominium Unit is residential and the non- residential use of such Condominium Unit is secondary (c) Underwriting considerations for Common Elements and Amenities The project’s Common Elements, including Amenities and Limited Common Elements, must be consistent with the nature of the project and similar to those found in competing Condominium Projects within the Market Area. (d) Financing of Limited Common Elements Limited Common Elements are portions of Common Elements reserved for use by one or more unit owners but not all unit owners. They are defined in the Project Documents and Freddie Mac Single-Family Seller/Servicer Guide Chapter 5701 As of 05/06/26 Page 5701-65 may include, but are not limited to, balconies or patios serving a single unit, assigned parking spaces or storage bins. Limited Common Elements that are purchased as part of the Condominium Unit may be financed as part of the Mortgage, and the cost of such Limited Common Elements may be included when determining the sale price and loan-to-value (LTV) ratio. Only Limited Common Elements may be financed along with the Condominium Unit. Facilities serving the Condominium Unit which are made available to the Condominium Unit by a permit, license or lease (other than in a leasehold condominium), must not be financed as part of a Mortgage, and the cost of the use of such facilities may not be included when determining the sale price and LTV ratio.

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