Freddie Mac Single-Family Seller/Servicer Guide 5703.6 — Mortgage purpose and use of proceeds for Mortgages secured by Manufactured Homes

Freddie Mac Single-Family Seller/Servicer Guide 5703.6 — Mortgage purpose and use of proceeds for Mortgages secured by Manufactured Homes

Effective 2026-04-01 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Eligible loan purpose ■ Allowable use of proceeds (a) Eligible loan purpose A Mortgage secured by a multiwide Manufactured Home may be any of the following: ■ A purchase transaction Mortgage ■ A “no cash-out” refinance Mortgage; or ■ A cash-out refinance Mortgage A Mortgage secured by a single-wide Manufactured Home must be either: ■ A purchase transaction Mortgage; or ■ A “no cash-out” refinance Mortgage (b) Allowable use of proceeds The following table specifies the allowable use of proceeds by transaction type: Manufactured Home Mortgages allowable use of proceeds Transaction type Use of proceeds Other requirements Purchase transaction Mortgages (multiwide and singlewide) Limited to: ■ Purchasing the Manufactured Home ■ Purchasing the land when the Borrower does not separately own the land ■ Paying documented costs for delivery and setup, anchoring on a permanent foundation system, site development, installation and permanent utility connections, including well and/or septic systems ■ Credits for wheels and axles, and any Manufactured Home retailer rebates, must be deducted from the purchase price along with any sales concessions in accordance with Section 5501.6(c) ■ Loan proceeds may not be used for any other costs, including financing of any forms of insurance, except for mortgage insurance “No cash-out” refinance Mortgages (multiwide and singlewide) Limited to: ■ Paying off the principal and interest due, including a balance deferred under a loss mitigation plan, for the existing first Mortgage ■ Pay off or pay down any junior lien(s) secured by the Manufactured Home and/or the land that was used in their entirety to acquire the subject property. Any remaining balance must be subordinated to the refinance Mortgage. ■ Paying off any costs or fees associated with the satisfaction and release of the first Mortgage (e.g., late fees, prepayment penalties) ■ Paying related Closing Costs ■ Disbursing cash to the Borrower (or any other payee) up to the A “no cash-out” refinance Mortgage must also meet the requirements in Section 4301.4. Manufactured Home Mortgages allowable use of proceeds Transaction type Use of proceeds Other requirements greater of 1% of the new refinance Mortgage or $2,000 Cash-out refinance Mortgages (multiwide) Proceeds may be used to, but are not limited to: ■ Pay off the existing Mortgage and, if applicable, any junior lien(s) secured by the Manufactured Home and land. When the purpose of the cashout refinance Mortgage is to pay off a First Lien Mortgage, the First Lien Mortgage being refinanced must be seasoned for at least 12 months. ■ Pay off existing liens if the Manufactured Home and land are separately encumbered and the purpose of the cash-out refinance Mortgage is to convert the Manufactured Home to legally classified real property under applicable State law. When the purpose of the cashout refinance Mortgage is to convert the Manufactured Home to legally classified real property, the Mortgage being refinanced does not need to be seasoned for at least 12 months. ■ Enable the Borrower to obtain a Mortgage on a property that is owned free and clear ■ The Borrower must have owned both the Manufactured Home and land for 12 months or more prior to the Note Date unless the property is owned free and clear ■ For a cash-out refinance Mortgage on a property owned free and clear, at least one Borrower must have been on the title to the subject property for at least six months prior to the Note Date ■ A cash-out refinance Mortgage must also meet the requirements in Section 4301.5(c)

Source: Freddie Mac Single-Family Seller/Servicer Guide 5703.6 — Mortgage purpose and use of proceeds for Mortgages secured by Manufactured Homes · source URL · snapshot 4c94f67729042dd6