Freddie Mac Single-Family Seller/Servicer Guide 5703.7 — Underwriting requirements for Mortgages secured by Manufactured Homes

Freddie Mac Single-Family Seller/Servicer Guide 5703.7 — Underwriting requirements for Mortgages secured by Manufactured Homes

Effective 2026-08-05 · Freddie Mac's stamp for this section

Refer to Bulletin 2026-10, which announced updates related to accumulated assets as income. Sellers may implement the new requirements prior to the mandatory February 3, 2027 version of this section. This section contains requirements related to: ■ Loan Product Advisor® Mortgages ■ Borrower contributions ■ Layering of risk (a) Loan Product Advisor Mortgages A Mortgage secured by a Manufactured Home must be submitted to Loan Product Advisor. A Mortgage secured by a single-wide Manufactured Home must be an Accept Mortgage. A Mortgage secured by a multiwide Manufactured Home must be submitted to Loan Product Advisor. Mortgages secured by a multiwide Manufactured Home that are submitted to Loan Product Advisor and did not receive a Risk Class of Accept must be manually underwritten in accordance with the Guide and the requirements in the following associated topics: Other Guide provisions related to manually underwritten Mortgages Guide provision Guide location Determining Borrower eligibility Topic 5100 Credit assessment Topic 5200 Stable monthly income and asset qualification sources Topic 5300 Evaluation of monthly obligations Topic 5400 Assets Topic 5500 Minimum Indicator Scores Exhibit 25 (b) Borrower contributions (i) Land as an equity contribution If the Borrower owns the land on which the Manufactured Home is being permanently affixed, the land may be used as an equity contribution. The Borrower’s equity contribution is determined as follows: Determining land as an equity contribution If, as of the Application Received Date… Then… The Borrower has owned the land for 12 months or more… The equity contribution is the current appraised value of the land. The Borrower has owned the land for less than 12 months… The equity contribution is the lower of: ■ The current appraised value of the land; or ■ The purchase price of the land The Seller must document the Borrower’s equity contribution with: ■ A certified copy of the Settlement/Closing Disclosure Statement; and ■ A copy of the warranty deed evidencing there are no liens against the subject property or a copy of the release for any prior lien(s) Additionally, if the Borrower acquired the land as a gift, an inheritance or by some other nonpurchase transaction less than 12 months as of the Application Received Date, the Seller must obtain appropriate documentation to verify the acquisition and transfer of ownership of the land. In such event, the value of the land will be its current appraised value. (ii) Trade as an equity contribution If the subject transaction involves trade as an equity contribution from the Borrower’s Existing Manufactured Home, the maximum equity contribution from the traded Manufactured Home must be determined as follows: Determining Trade as an Equity Contribution If, as of the Application Received Date… Then... The Borrower has owned the traded Manufactured Home for 12 months or more… 90% of the retail value based on the N.A.D.A. Manufactured Housing Appraisal Guide® is the maximum equity contribution. The Borrower has owned the traded Manufactured Home for less than 12 months… The maximum equity contribution is the lesser of: ■ 90% of the retail value based on the N.A.D.A. Manufactured Housing Appraisal Guide; or ■ The lowest price at which the Manufactured Home was sold during that 12-month period Additionally, any costs resulting from the removal of the Manufactured Home or any outstanding indebtedness secured by liens on the Manufactured Home must be deducted from the maximum equity contribution. The trade equity must be documented by a lien search in the appropriate real property or personal property records to verify ownership and existence of liens on the Manufactured Home and land, if included. The seller of the New Manufactured Home must provide proof of title transfer and satisfaction of any existing liens on the traded Manufactured Home. (c) Layering of risk A Manufactured Home adds a layer of collateral risk that must be considered when evaluating the overall risk of the Mortgage using the three Cs of underwriting (credit reputation, capacity and collateral). The Seller must consider this high-risk characteristic in evaluating the overall risk of the Mortgage and avoid combining a Manufactured Home with weaknesses in the components of capacity and credit reputation. See Section 5102.2 for more information on evaluating layering of risk and how to document that the overall risk of the Mortgage is acceptable. Example 1: If the Borrower has a strong credit reputation and strong capacity to offset the high risk within the collateral component, a Mortgage secured by a Manufactured Home with maximum financing would be acceptable. Example 2: If the Borrower has weaknesses in credit reputation, such as a short credit history or derogatory credit information, the layering of risk across credit reputation and collateral is excessive and would make the Mortgage unacceptable.

Source: Freddie Mac Single-Family Seller/Servicer Guide 5703.7 — Underwriting requirements for Mortgages secured by Manufactured Homes · source URL · snapshot 4c94f67729042dd6

Freddie Mac Single-Family Seller/Servicer Guide 5703.7 — Underwriting requirements for Mortgages secured by Manufactured Homes — PENDING VERSION, takes effect 2027-02-03

Not yet in force. This is the pending version of the section, which takes effect 2027-02-03. The other version on this page governs until then.

Effective 2027-02-03 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Loan Product Advisor® Mortgages ■ Borrower contributions ■ Layering of risk (a) Loan Product Advisor Mortgages A Mortgage secured by a Manufactured Home must be submitted to Loan Product Advisor. A Mortgage secured by a single-wide Manufactured Home must be an Accept Mortgage. A Mortgage secured by a multiwide Manufactured Home must be submitted to Loan Product Advisor. Mortgages secured by a multiwide Manufactured Home that are submitted to Loan Product Advisor and did not receive a Risk Class of Accept must be manually underwritten in accordance with the Guide and the requirements in the following associated topics: Other Guide provisions related to manually underwritten Mortgages Guide provision Guide location Determining Borrower eligibility Topic 5100 Credit assessment Topic 5200 Stable monthly income Topic 5300 Evaluation of monthly obligations Topic 5400 Assets Topic 5500 Minimum Indicator Scores Exhibit 25 (b) Borrower contributions (i) Land as an equity contribution If the Borrower owns the land on which the Manufactured Home is being permanently affixed, the land may be used as an equity contribution. The Borrower’s equity contribution is determined as follows: Determining land as an equity contribution If, as of the Application Received Date… Then… The Borrower has owned the land for 12 months or more… The equity contribution is the current appraised value of the land. The Borrower has owned the land for less than 12 months… The equity contribution is the lower of: ■ The current appraised value of the land; or ■ The purchase price of the land The Seller must document the Borrower’s equity contribution with: ■ A certified copy of the Settlement/Closing Disclosure Statement; and ■ A copy of the warranty deed evidencing there are no liens against the subject property or a copy of the release for any prior lien(s) Additionally, if the Borrower acquired the land as a gift, an inheritance or by some other nonpurchase transaction less than 12 months as of the Application Received Date, the Seller must obtain appropriate documentation to verify the acquisition and transfer of ownership of the land. In such event, the value of the land will be its current appraised value. (ii) Trade as an equity contribution If the subject transaction involves trade as an equity contribution from the Borrower’s Existing Manufactured Home, the maximum equity contribution from the traded Manufactured Home must be determined as follows: Determining Trade as an Equity Contribution If, as of the Application Received Date… Then... The Borrower has owned the traded Manufactured Home for 12 months or more… 90% of the retail value based on the N.A.D.A. Manufactured Housing Appraisal Guide® is the maximum equity contribution. The Borrower has owned the traded Manufactured Home for less than 12 months… The maximum equity contribution is the lesser of: ■ 90% of the retail value based on the N.A.D.A. Manufactured Housing Appraisal Guide; or ■ The lowest price at which the Manufactured Home was sold during that 12-month period Additionally, any costs resulting from the removal of the Manufactured Home or any outstanding indebtedness secured by liens on the Manufactured Home must be deducted from the maximum equity contribution. The trade equity must be documented by a lien search in the appropriate real property or personal property records to verify ownership and existence of liens on the Manufactured Home and land, if included. The seller of the New Manufactured Home must provide proof of title transfer and satisfaction of any existing liens on the traded Manufactured Home. (c) Layering of risk A Manufactured Home adds a layer of collateral risk that must be considered when evaluating the overall risk of the Mortgage using the three Cs of underwriting (credit reputation, capacity and collateral). The Seller must consider this high-risk characteristic in evaluating the overall risk of the Mortgage and avoid combining a Manufactured Home with weaknesses in the components of capacity and credit reputation. See Section 5102.2 for more information on evaluating layering of risk and how to document that the overall risk of the Mortgage is acceptable. Example 1: If the Borrower has a strong credit reputation and strong capacity to offset the high risk within the collateral component, a Mortgage secured by a Manufactured Home with maximum financing would be acceptable. Example 2: If the Borrower has weaknesses in credit reputation, such as a short credit history or derogatory credit information, the layering of risk across credit reputation and collateral is excessive and would make the Mortgage unacceptable.

Source: Freddie Mac Single-Family Seller/Servicer Guide 5703.7 — Underwriting requirements for Mortgages secured by Manufactured Homes · source URL · snapshot 4c94f67729042dd6