Freddie Mac Single-Family Seller/Servicer Guide Section 8801.1 — Servicing Cooperative Share Loans

Freddie Mac Single-Family Seller/Servicer Guide Section 8801.1 — Servicing Cooperative Share Loans

8801.1: Servicing Cooperative Share Loans (09/10/25) This section contains information related to: ■ Key terms for Cooperative Share Loans ■ Servicers of Cooperative Share Loans ■ Servicing requirements applicable to Cooperative Share Loans ■ Combined Cooperative Units ■ Amendments to the Proprietary Lease ■ Cooperative Share Loans recognized as personal property ■ Notifications to/from the Cooperative Corporation and insurers ■ Stock transfer fee (“flip tax”) (a) Key terms for Cooperative Share Loans Key terms and definitions used in this Chapter 8801 (e.g., Cooperative Share Loan) can be found in the Glossary. Servicers of Cooperative Share Loans should be familiar with such key terms and definitions found therein. Note: The terms “Mortgage” and “Mortgaged Premises” as used in the Servicing requirements of the Guide include (as the context requires) the terms “Cooperative Share Loan” and “Cooperative Unit”, respectively. As such, Servicing requirements pertaining to Mortgages or Mortgaged Premises apply respectively to Cooperative Share Loans or Cooperative Units. (b) Servicers of Cooperative Share Loans A Servicer does not need to obtain Freddie Mac’s prior written approval to service Cooperative Share Loans, nor must the Servicer be a Seller/Servicer approved to sell Cooperative Share Loans to Freddie Mac in accordance with Chapter 5705. Note: Refer to Chapter 5705 for specific requirements for selling Cooperative Share Loans to Freddie Mac, including, but not limited to, the approval process to sell Cooperative Share Loans to Freddie Mac. Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-2 For each Cooperative Share Loan being serviced for Freddie Mac, the Servicer must: ■ Service the Cooperative Share Loan in accordance with the Servicing requirements of the Guide and this chapter ■ Verify that the UCC-1 Financing Statements are current and valid to perfect Freddie Mac’s security interest; and ■ Recognize that it is responsible for understanding the responsibilities, rights and available remedies under the Cooperative Project Documents and the Recognition Agreement between the Cooperative Corporation and the lender, its successors or its assigns and will protect Freddie Mac’s interest under the terms of such documents (c) Servicing requirements applicable to Cooperative Share Loans The Servicing requirements of this chapter are applicable only to the Servicing of Cooperative Share Loans. If any Servicing requirement in this chapter is inconsistent with a Servicing requirement set forth elsewhere in the Guide (except for requirements to comply with applicable law, which supersede any other Servicing requirement in the Guide), then the Servicer must comply with the Servicing requirement set forth in this chapter with respect to any Cooperative Share Loan. Servicers must not apply any of the requirements set forth in this chapter to a non-Cooperative Share Loan but rather should continue Servicing such Mortgages in accordance with all other Servicing requirements of the Guide and other applicable Purchase Documents. (d) Combined Cooperative Units A Cooperative Share Loan secured by a First Lien on the Cooperative Interest to Cooperative Units that were combined into a single unit must be serviced as a 1-unit dwelling, and, in the event of a foreclosure, the Cooperative Share Loan must be foreclosed as a 1-unit dwelling. Note: Refer to Section 5705.9 for selling requirements for combined Cooperative Units. (e) Amendments to the Proprietary Lease Without the prior written consent of Freddie Mac, a Servicer must not approve or consent to any amendments to the Proprietary Lease if such amendment affects the rights of the Cooperative Share Loan Borrower. Note: See also Section 8801.3(b) for loan modification requirements for a Cooperative Share Loan and the Proprietary Lease. Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-3 (f) Cooperative Share Loans recognized as personal property If a Cooperative Share Loan is recognized as personal property and a title insurance policy cannot be issued (refer to Section 4702.6 for title insurance requirements for cooperatives): ■ In the event of a loan modification, when it is necessary to record the modification agreement to retain the modified Cooperative Share Loan’s First Lien position, where a title endorsement or similar title insurance product would otherwise need to be obtained pursuant to Section 9206.2(c) if a title insurance policy was issued, then the Servicer must warrant that: ❑ The Cooperative Share Loan Borrower continues to have good and marketable title to the Cooperative Shares; and ❑ The Cooperative Corporation continues to have good and marketable title to the Cooperative Project ■ When foreclosing on a Cooperative Share Loan, in lieu of supplying foreclosure counsel with a copy of the title insurance policy pursuant to Section 9301.2(f) (or, for Senior Subordinate Mortgages, pursuant to Section 8601.5(b)), then the Servicer must provide evidence of title supporting the warranty that: ❑ The Cooperative Share Loan Borrower has good and marketable title to the Cooperative Shares; and ❑ The Cooperative Corporation has good and marketable title to the Cooperative Project (g) Notifications to/from the Cooperative Corporation and insurers The Servicer must have processes in place and must have given notice to all appropriate parties (including, but not limited to, the Cooperative Corporation and insurers, as applicable), as necessary, so that the Servicer is in receipt of the following notifications in a timely manner: ■ Notifications the Cooperative Corporation is legally bound to provide that are of a material and adverse nature to Sellers (refer to Section 5705.6(d) regarding the rights of cooperative Shareholders and Sellers) ■ Any notifications from the Cooperative Corporation relating to the rights granted to a lender, its successors or assigns, in the Cooperative Project Documents or Recognition Agreement (refer to Section 5705.6(h) regarding the Cooperative Corporation responsibilities and Seller/Servicer rights); and Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-4 ■ Notifications regarding any substantive lapse in compliance with any of the insurance requirements. (Refer to Section 5705.6(d) regarding the rights of cooperative Shareholders and Sellers and Section 8801.2(b) for Servicing requirements in the event of a reduction or cancelation in insurance coverage.) Upon receipt of a notification regarding the following, the Servicer must notify Freddie Mac (Distressed_Property@FreddieMac.com) and include the Servicer’s recommendation on how to proceed: ■ A proposed action that requires the consent of a specified percentage of eligible lenders of Cooperative Share Loans ■ A lender’s right to review and approve: ❑ Any surrender, cancelation, modification, assignment or pledge of any documents evidencing ownership, possession and use of the Shareholder’s Cooperative Unit ❑ Any further or additional pledge or mortgage of any documents evidencing ownership, possession, and use of the Shareholder’s Cooperative Unit ❑ Any action to change the size, existence or form of ownership of the Cooperative Project Freddie Mac must be provided sufficient opportunity, but no less than five Business Days before any deadline given, to review and provide comments. (h) Stock transfer fee (“flip tax”) For Cooperative Share Loans where the imposition of a flip tax is permitted (refer to Section 5705.5(f) regarding Cooperative Share Loans subject to a stock transfer fee), Freddie Mac will reimburse the Servicer the paid flip tax in the event it is imposed as a result of a foreclosure, a transfer by the Cooperative Share Loan Borrower in lieu of foreclosure (“deed-in-lieu of foreclosure”) or a transfer of the Cooperative Share Loan Borrower’s interest in the Cooperative Unit as a result of a completed short sale. To be reimbursed, the Servicer must obtain written pre-approval from Freddie Mac by submitting a request for pre-approval (RPA) via the RPA functionality in PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). Note: See also Section 8801.2(d) regarding reimbursement of expenses incurred on a Cooperative Share Loan. Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-5 8801.2: Transfers of Servicing, financial obligations and insurance considerations (04/08/26) This section contains requirements related to: ■ Transfers of Servicing with respect to Cooperative Share Loans ■ Reduction or cancelation in insurance coverage maintained by the Cooperative Corporation ■ Cooperative Share Loan expenses that may become First Liens on the property ■ Reimbursement of Cooperative Share Loan expenses (a) Transfers of Servicing with respect to Cooperative Share Loans A Transferee Servicer, whether in a Concurrent or Subsequent Transfer of Servicing involving Cooperative Share Loans, does not need to be a Seller/Servicer approved to sell Cooperative Share Loans to Freddie Mac in accordance with Chapter 5705 in order to service Cooperative Share Loans for Freddie Mac when engaging in the Transfer of Servicing with a Transferor Servicer. In addition to the requirements governing Concurrent Transfers of Servicing and Subsequent Transfers of Servicing set forth elsewhere in the Guide, for each Cooperative Share Loan being serviced for Freddie Mac: ■ The Transferor Servicer must verify that the UCC-1 Financing Statements are current and valid to perfect Freddie Mac’s security interest on the Effective Date of Transfer; and ■ Consistent with the requirements in Section 7101.7(b), the Transferee Servicer must provide notice to all appropriate parties (including, but not limited to, the Cooperative Corporation and insurers, as applicable), as necessary, to avoid disruption in the Transferee Servicer’s timely receipt of any notifications from the Cooperative Corporation and insurers. Note: Refer to Section 8801.1(g) regarding notifications from the Cooperative Corporation and insurers. (b) Reduction or cancelation in insurance coverage maintained by the Cooperative Corporation For insurance being maintained by the Cooperative Corporation under Chapter 8202, when the Servicer learns that any of the required insurance coverage(s) will be reduced or no longer in force, the Servicer must contact the Cooperative Corporation to: Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-6 ■ Determine the reasons for the reduction or cancelation in insurance coverage and whether and when such insurance coverage will be reinstated; and ■ Advise the Cooperative Corporation that the lack of adequate insurance coverage will make future Cooperative Share Loans in the Cooperative Project ineligible for sale to Freddie Mac If the insurance coverage is not reinstated within 60 days after the reduction or cancelation, then the Servicer must: ■ Advise its loan origination staff, if any, that future Cooperative Share Loans in the Cooperative Project are not eligible for sale to Freddie Mac; and ■ Immediately notify Freddie Mac (Distressed_Property@FreddieMac.com) of the reduction or cancelation in insurance coverage and include the Servicer’s recommendation on how to proceed (c) Cooperative Share Loan expenses that may become First Liens on the property In consideration of the requirements in Section 9301.6(e), if a delinquent expense (as listed below) is or may become a First Lien on the property or that if not paid would result in the subordination of Freddie Mac’s interests, then the Servicer must obtain written pre-approval from Freddie Mac by submitting a request for pre-approval (RPA) via the RPA functionality in PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools) before advancing and paying any such expense, when and to the extent necessary, to protect Freddie Mac’s interests. These expenses include: ■ Cooperative Corporation assessments that represent the Pro Rata Share; and ■ For a Cooperative Unit located in the State of New York, Cooperative Unit Maintenance Fees (and any associated collection expenses) Note: See also Section 8801.2(d) regarding reimbursement of expenses incurred on a Cooperative Share Loan. (d) Reimbursement of Cooperative Share Loan expenses The Servicer must obtain written pre-approval from Freddie Mac by an RPA) via the RPA functionality in PAID to be reimbursed for the following expenses incurred on a Cooperative Share Loan: ■ Flip tax pursuant to Section 8801.1(h); and ■ Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-7 Note: See also Exhibit 74, Expense and Income Codes for Expense Reimbursement Claims, regarding expense codes 014005 (Foreclosure on a Cooperative Share), 080008 (Cooperative Share Loan – Flip Tax), 080009 (Cooperative Share Loan – Pro Rata Share Assessments) and 080010 (Cooperative Share Loan – Maintenance Fees). Additionally, consistent with the requirements in Section 9701.5(a), standard supporting documentation (e.g., proof of disbursements) for reimbursement of expenses incurred on a Cooperative Share Loan include, but are not limited to, a copy of the Cooperative Project Documents, Recognition Agreement or other legal documents highlighting, if applicable, that: ■ The Cooperative Corporation assessments that represent the Pro Rata Share and/or Cooperative Unit Maintenance Fees (and any associated collection expenses) may become First Liens on the property ■ The Cooperative Share Loan is subject to the payment of a flip tax and the imposition of the flip tax is permitted 8801.3: Loss mitigation for Cooperative Share Loans (09/10/25) This section contains requirements related to: ■ Assumptions and workout loan assumptions of Cooperative Share Loans ■ Loan modifications of Cooperative Share Loans ■ Short sales of Cooperative Share Loans ■ Deeds-in-lieu of foreclosure of Cooperative Share Loans ■ Charge-offs of Cooperative Share Loans (a) Assumptions and workout loan assumptions of Cooperative Share Loans In the event an assumption or workout loan assumption (with or without a release of liability) of a Cooperative Share Loan is approved, then, in addition to the approval of the application for transfers of ownership requirements listed in Section 8406.2(c) and the approval conditions for a workout assumption in Section 9207.1(f), as applicable, the Servicer must: ■ Obtain the consent of the Cooperative Corporation, if such consent is required by the Proprietary Lease, and obtain a new stock certificate, if applicable Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-8 ■ Ensure the transferee acquires the transferor’s ownership interest in the Cooperative Corporation (e.g., evidenced in a stock certificate) and either obtains a new Proprietary Lease or assumes the existing Proprietary Lease; and ■ If applicable, timely file a UCC-1 Financing Statement naming the transferee that became the debtor (b) Loan modifications of Cooperative Share Loans When evaluating a Cooperative Share Loan Borrower for a loan modification under a Freddie Mac loan modification program, in addition to the modification requirements in Chapter 9206 and other loan modification requirements under the Purchase Documents, as applicable, the following requirements must be met: ■ The Servicer must ensure that the term of the Proprietary Lease must not terminate earlier than the maturity date of the proposed modified Cooperative Share Loan. If the current term of the Proprietary Lease terminates earlier than the maturity date of the proposed Cooperative Share Loan, then the term of the Proprietary Lease must be renegotiated to satisfy this requirement ■ For purposes of calculating the housing expense-to-income ratio(s), as applicable, the Servicer must make reasonable efforts to obtain written documentation verifying the monthly amounts of Cooperative Corporation assessments and Cooperative Unit Maintenance Fees ■ Consistent with the requirements in Section 9206.3(b), any delinquent Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) may be capitalized, provided that such capitalization is not prohibited by applicable law Note: See also Section 8801.1(f) regarding certain Servicer warranties required in the event of a loan modification. (c) Short sales of Cooperative Share Loans When evaluating a Cooperative Share Loan Borrower for a Freddie Mac Standard Short Sale (“short sale”), in addition to the short sale requirements in Chapter 9208, the following requirements must be met: ■ For purposes of calculating the housing expense-to-income ratio, if applicable, the Servicer must make reasonable efforts to obtain written documentation verifying the monthly amounts of Cooperative Corporation assessments and Cooperative Unit Maintenance Fees ■ If the Servicer is considering a Cooperative Share Loan Borrower for a short sale, then the Servicer is not delegated to approve the short sale, and the file must be sent to Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-9 Freddie Mac. Pursuant to Section 9208.1(b), the Servicer must submit a short sale exception review in Resolve® with the following additional documentation: ❑ A detailed explanation of the Servicer’s recommendation and rationale for its recommendation documented in the comments section of Resolve. (Note: The Servicer must identify that the recommendation pertains to a Cooperative Share Loan.) ❑ The monthly amounts of Cooperative Corporation assessments and Cooperative Unit Maintenance Fees, as well as the total amounts of any delinquent Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) In the event a short sale is approved, then, in addition to the requirements listed in Section 9208.3(a), the Servicer must: ■ Obtain the consent of the Cooperative Corporation, if such consent is required by the Proprietary Lease ■ Ensure the buyer acquires an ownership interest in the Cooperative Corporation (e.g., evidenced in a new stock certificate) and obtain either the assignment of the Proprietary Lease or a new Proprietary Lease ■ If applicable, timely file a termination statement for the UCC-1 Financing Statements; and ■ Unless otherwise instructed by Freddie Mac, pay, prior to and outside of the transaction, any delinquent Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) (d) Deeds-in-lieu of foreclosure of Cooperative Share Loans When evaluating a Cooperative Share Loan Borrower for a Freddie Mac Standard Deed-in- Lieu of Foreclosure (“deed-in-lieu of foreclosure”), in addition to the deed-in-lieu of foreclosure requirements in Chapter 9209, the following requirements must be met: ■ For purposes of calculating the housing expense-to-income ratio, if applicable, the Servicer must make reasonable efforts to obtain written documentation verifying the monthly amounts of Cooperative Corporation assessments and Cooperative Unit Maintenance Fees ■ If the Servicer is considering a Cooperative Share Loan Borrower for a deed-in-lieu of foreclosure, then the Servicer is not delegated to approve the deed-in-lieu of foreclosure, and the file must be sent to Freddie Mac. Pursuant to Section 9209.1, the Servicer must submit a deed-in-lieu of foreclosure exception review through Resolve with the following additional documentation: Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-10 ❑ A detailed explanation of the Servicer’s recommendation and rationale for its recommendation documented in the comments section of Resolve. (Note: The Servicer must identify that the recommendation pertains to a Cooperative Share Loan.) ❑ The monthly amounts of Cooperative Corporation assessments and Cooperative Unit Maintenance Fees, as well as the total amounts of any delinquent Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) In the event a deed-in-lieu of foreclosure is approved, then, in addition to the requirements listed in Section 9209.6, the Servicer must: ■ Obtain the consent of the Cooperative Corporation, if such consent is required by the Proprietary Lease, and obtain a new stock certificate ■ Ensure an ownership interest in the Cooperative Corporation is acquired (e.g., evidenced in a new stock certificate) and obtain either the assignment of the Proprietary Lease or a new Proprietary Lease ■ If applicable, timely file a termination statement for the UCC-1 Financing Statements; and ■ Unless otherwise instructed by Freddie Mac, pay any delinquent Cooperative Share Loan expenses that may become First Liens on the property pursuant to Section 8801.2(c) (e) Charge-offs of Cooperative Share Loans In the event a charge-off of a Cooperative Share Loan is approved, then, in addition to the requirements listed in Section 9210.2, the Servicer must, if applicable, timely file a termination statement for the UCC-1 Financing Statements. Note: See also Section 9210.1(b) regarding when a Servicer must recommend a charge-off of a Cooperative Share Loan to Freddie Mac. 8801.4: Delinquency management for Cooperative Share Loans (04/08/26) This section contains requirements related to: ■ Preforeclosure referral account review ■ Foreclosure of a Cooperative Share Loan Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-11 ■ Foreclosure attorney fee ■ Post-foreclosure/REO (a) Preforeclosure referral account review In addition to the requirements in Section 9301.2(a) regarding the preforeclosure referral account review, the Servicer must seek Freddie Mac’s approval (Foreclosures@FreddieMac.com) to refer a Cooperative Share Loan to foreclosure if: ■ The Servicer becomes aware of or has reason to believe that proceeding with foreclosure on the Cooperative Share Loan is not in Freddie Mac’s best interest; and/or ■ A charge off would produce a lesser estimated loss severity, as opposed to proceeding with foreclosure on the Cooperative Share Loan If directed by Freddie Mac, the Servicer must submit a recommendation for a charge-off to Freddie Mac in accordance with the requirements in Section 9210.1(c). (b) Foreclosure of a Cooperative Share Loan When referring a Cooperative Share Loan to foreclosure, the Servicer must follow the requirements in Chapter 9301, as such requirements may be applicable to Cooperative Units. Additionally, consistent with the requirements in Section 9501.2, the Servicer must ensure that the firm accepting the foreclosure referral meets the Firm Minimum Requirements (as that term is described in Section 9501.2), including, but not limited to: ■ Having experience in general housing-related issues such as Cooperative Share Loans; and ■ No substantial part of the firm’s practice includes matters that are adverse to financial institutions, such as Cooperative Corporation foreclosures Servicers may submit any foreclosure-related questions or concerns when foreclosing on a Cooperative Share Loan to Freddie Mac (Foreclosures@FreddieMac.com). Note: See also Section 8801.1(f) regarding certain Servicer warranties required when foreclosing on a Cooperative Share Loan. (c) Foreclosure attorney fees Freddie Mac will reimburse Servicers for reasonable attorney fees incurred in connection with the foreclosure of a Cooperative Share Loan. Servicers must claim reimbursement using expense code 014005 (Foreclosure on a Cooperative Share). Refer to Exhibit 57A, Approved Attorney, Foreclosure, Mediation, Postponement Fees and Title Expenses. Freddie Mac Single-Family Seller/Servicer Guide Chapter 8801 As of 04/08/26 Page 8801-12 See also Section 8801.2(d) regarding reimbursement of expenses incurred on a Cooperative Share Loan. Note: In addition to the legal services included in the attorney fees for an uncontested foreclosure outlined in Section 9701.3(a), any transfer of the Cooperative Shares and Proprietary Lease is also considered included. (d) Post-foreclosure/REO Consistent with the requirements in Sections 8601.8(a) and 9601.1(c), as applicable, once Freddie Mac has acquired a Cooperative Unit in REO, Freddie Mac will pay the Cooperative Corporation assessments and Cooperative Unit Maintenance Fees. Additionally, pursuant to Section 9603.1(b), for a Cooperative Unit in REO, the Servicer must submit to Freddie Mac any information Freddie Mac requests from the Servicer, whether from the Mortgage file or, for documents for which a Document Custodian maintains physical custody, from the Document Custodian. This includes, but is not limited to: ■ The stock certificate, which evidenced the Cooperative Share Loan Borrower’s ownership interest in the Cooperative Corporation ■ The Cooperative Share Loan Borrower’s Proprietary Lease; and ■ The Recognition Agreement Freddie Mac Single-Family Seller/Servicer Guide Chapter 8901 As of 09/10/25 Page 8901-1 Chapter 8901: Servicing Requirements for HeritageOne® Mortgages

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