Freddie Mac Single-Family Seller/Servicer Guide 4205.4 — FHA and VA Mortgages

This section contains: ■ General requirements for FHA and VA Mortgages ■ Additional requirements for FHA and VA Mortgages ■ Mortgage file requirements ■ Special Seller warranties ■ Delivery requirements ■ Credit Fees

(a) General requirements for FHA and VA Mortgages FHA Mortgages and VA Mortgages are eligible for sale to Freddie Mac. The Seller must obtain Freddie Mac’s written approval before selling FHA and VA Mortgages by contacting its Freddie Mac representative or the Contact Support Center at 800-FREDDIE. FHA or VA Mortgages must have the following characteristics: ■ Each Mortgage is a fixed-rate, level-payment, fully amortizing, First Lien FHA Mortgage or VA Mortgage ■ The following Mortgages may not be delivered: ❑ ARMs ❑ Community Land Trust Mortgages ❑ Graduated-payment Mortgages ❑ Home Improvement Loans (HILs) ❑ Mortgages secured by properties subject to income-based resale restrictions that terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure, where the property value must be determined in accordance with Section 4406.4(c) ❑ Multifamily Mortgages ❑ Second Mortgages ❑ Super conforming Mortgages ■ Each Mortgage meets all requirements applicable to the program under which it is insured or guaranteed ■ Each Mortgage meets the requirements set forth in the Guide, except to the extent that: ❑ The requirements of the Guide are inconsistent with the requirements of the program under which the Mortgage is insured or guaranteed, or ❑ The requirements of the Guide are specifically modified by this chapter ■ Each Mortgage is sold to Freddie Mac with recourse, within the meaning of Section 6201.2(b)(i) For FHA Mortgages, the Seller must file a Mortgage Record Change (Form HUD-92080) with HUD to report the sale of an FHA Mortgage and provide HUD with required information on the Seller or selling mortgagee, the Freddie Mac or purchase or holding mortgagee and the Servicer. The HUD Mortgagee number for Freddie Mac is 92304-0999-4.

(b) Additional requirements for FHA and VA Mortgages Notwithstanding any requirements applicable to the program under which an FHA or VA Mortgage is insured or guaranteed: ■ No Mortgage may have an original maturity in excess of 30 years ■ No FHA Mortgage may have an original principal balance in excess of the maximum principal amount as determined under the National Housing Act or in excess of the maximum loan amounts for conventional Mortgages in Section 4203.1(c), whichever is less ■ The original principal balance of a VA Mortgage may not exceed the maximum loan amount for a conventional 1-unit Home Mortgage as described in Section 4203.1(c) ■ Each Mortgage must be covered by a paid-up Mortgage title insurance policy written by a title insurer and in a form acceptable to the Secretary of HUD or the VA Administrator, as applicable. Such policy may not be subject to any exceptions other than those previously approved by the Secretary of HUD or the VA Administrator. The protection and benefits of such policy in the amounts required by HUD and the VA must run to Freddie Mac and to the Secretary of HUD or the VA Administrator, as applicable. With respect to any FHA Mortgage on a property formerly held by HUD, a title insurance policy is not required if the Secretary of HUD is obligated to: ❑ Waive any objection to title by reason of any lien or other adverse interest that was senior to the FHA Mortgage on the date such FHA Mortgage was filed for record, or ❑ Accept an assignment of the FHA Mortgage if the mortgagee is unable to complete foreclosure because of a defect in the FHA Mortgage instrument, the FHA Mortgage transaction or the title that existed at or before the time the FHA Mortgage was filed for record Prior encumbrances on the Mortgaged Premises are not acceptable unless such encumbrances were previously approved by the FHA or VA and, as determined by Freddie Mac, do not detract from the value of the Mortgaged Premises or affect the First Lien priority or the marketability of the Mortgage or the Mortgaged Premises. Notwithstanding any requirements applicable to Mortgages generally under the Guide, the following classes of requirements do not apply to FHA or VA Mortgages offered for sale to Freddie Mac: ■ Credit underwriting ■ Mortgage insurance ■ Owner-occupancy ■ Property appraisal All Mortgages must be originated on Mortgage instruments approved by the FHA or VA, as applicable. Notwithstanding the modification made in this section with respect to the document delivery requirements of the Guide, the Seller must submit such other documents as Freddie Mac may request for any FHA or VA Mortgage delivered pursuant to the Purchase Documents.

(c) Mortgage file requirements In addition to the documentation specified in the Guide, the Mortgage file retained by the Seller for FHA and VA Mortgages must contain the following documents: ■ The Mortgage application of the original Borrower and, if available and applicable, that of the current Borrower ■ The credit report on the original Borrower and, if available and applicable, on the current Borrower ■ The original FHA or VA commitment and, if available and applicable, the FHA Escrow Commitment Certificate and related documents ■ For VA Mortgages, the VA Certificate of Reasonable Value ■ The FHA Mortgage Insurance Certificate or VA Loan Guaranty Certificate, as applicable ■ Any other documents that are required to be retained by federal or State laws, statutes or regulations

(d) Special Seller warranties For each FHA or VA Mortgage, the Seller further represents and warrants that: ■ The FHA insurance or the VA guaranty is in full force and effect as of the Delivery Date ■ The Seller has complied and will continue to comply with all applicable FHA and/or VA guidelines, regulations and requirements, including, but not limited to, those relating to loan origination and Servicing

(e) Delivery requirements See Section 6302.12 for delivery and pooling requirements for FHA and VA Mortgages sold to Freddie Mac.

(f) Credit Fees The Seller must refer to Exhibit 19, Credit Fees, for Credit Fees related to FHA and VA Mortgages. Credit Fees are paid in accordance with the Credit Fee provisions stated in Chapter 6303.