Freddie Mac Single-Family Seller/Servicer Guide §4301.7 — Texas Equity Section 50(a)(6) Mortgages (11/19/25)
Freddie Mac Guide §4301.7 (Texas Equity Section 50(a)(6) Mortgages). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §4301.7 — Texas Equity Section 50(a)(6) Mortgages (11/19/25) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Guide 4301.7
(11/19/25) This section contains requirements related to: ■ General requirements for Texas Equity Section 50(a)(6) ■ Eligible Mortgages ■ Refinances of Texas Equity Section 50(a)(6) Mortgages ■ Mortgaged Premises; appraisal; fair market value ■ Loan-to-value (LTV) and total LTV (TLTV) ratios ■ Eligibility to sell and service Texas Equity Section 50(a)(6) Mortgages ■ Texas Equity Uniform Instruments and other documents ■ Special representations and warranties ■ Specific remedies ■ Related provisions (a) General requirements for Texas Equity Section 50(a)(6) The generally accepted commercial terms used to describe Mortgages originated under Article XVI of the Texas Constitution (“cash-out refinance”, “rate-term refinance”) may not correspond to the meaning given the same or comparable terms when used in Chapter 4301. Sellers must understand the distinctions between Freddie Mac’s refinance definitions in Chapter 4301 and the provisions of Section 50(a)(6) and are responsible for determining: ■ When Section 50(a)(6) applies, regardless of the definitions of cash-out and “no cash out” refinance transactions used in Chapter 4301 ■ Whether the proposed refinance of a Mortgage secured by the Borrower’s homestead in the State of Texas is a Mortgage that must be originated pursuant to Section 50(a)(6) of Article XVI of the Texas Constitution (b) Eligible Mortgages A Texas Equity Section 50(a)(6) Mortgage must be:
Freddie Mac Guide 4301.7
301-14 ■ A conventional First Lien Mortgage that is a: ❑ Fixed-rate Mortgage, or ❑ 3/6-Month, 5/6-Month, 7/6-Month or 10/6-Month ARM ■ A cash-out refinance Mortgage as described in Section 4301.5 or a “no cash-out” refinance Mortgage as described in Section 4301.4, depending on the applicable facts A Texas Equity Section 50(a)(6) Mortgage may not be a special purpose cash-out refinance Mortgage. (c) Refinances of Texas Equity Section 50(a)(6) Mortgages Sellers may refinance a Texas Equity Section 50(a)(6) Mortgage into: ■ Another Texas Equity Section 50(a)(6) Mortgage, or ■ A refinance Mortgage permitted by Section 50(a)(4) of Article XVI of the Texas Constitution (a “Section 50(a)(4) Mortgage”) Note: Section 50(a)(4) Mortgages used to pay off a Texas Equity Section 50(a)(6) Mortgage and meeting all applicable Texas Constitutional requirements are not subject to the requirements of this section and are eligible for sale to Freddie Mac as “no cash-out” refinance Mortgages, provided all requirements of Section 4301.4 are met. (d) Mortgaged Premises; appraisal; fair market value Each Mortgage must be secured by a Mortgaged Premises that is: ■ A 1-unit Primary Residence, ■ Located in the State of Texas, and ■ The Borrower’s homestead A Living Trust that meets the eligibility requirements of Section 5103.5 may be a Borrower for a Texas Equity Section 50(a)(6) Mortgage if the Living Trust also meets the requirements for a “qualifying trust” under Texas law for purposes of owning residential property that qualifies for the homestead exemption. The Seller must provide an appraisal that: ■ Meets Freddie Mac requirements, and
Freddie Mac Guide 4301.7
301-15 ■ Complies with Section 50(a)(6)(Q)(ix) and Section 50(h) of Article XVI of the Texas Constitution To meet the requirements for acknowledgment of fair market value, the Seller must: ■ Along with the owner of the homestead, execute a written acknowledgment of the “fair market value” of the homestead property as of the date the extension of credit is made ■ Attach the appraisal report to the acknowledgment (e) LTV and TLTV ratios The maximum LTV and TLTV ratios for Texas Equity Section 50(a)(6) Mortgages must not exceed 80% and must be lower if necessary to comply with the LTV/TLTV ratio requirements of Sections 4203.1(b) and 4301.4 for “no cash out” and cash out refinances, as applicable. (f) Eligibility to sell and service Texas Equity Section 50(a)(6) Mortgages Unless otherwise notified in writing, Sellers are eligible to deliver Texas Equity Section 50(a)(6) Mortgages. The Servicer must be eligible to service Texas Equity Section 50(a)(6) Mortgages in accordance with Section 8104.1(a) and related Servicing provisions. (g) Texas Equity Uniform Instruments and other documents Texas Equity Section 50(a)(6) Mortgages must be originated using the most recent version of the following special Fannie Mae/Freddie Mac Texas Home Equity Uniform Instruments: Texas Equity Uniform Instruments and other required forms Instrument type Required forms Note ■ Texas Home Equity Note (Fixed Rate - First Lien) - Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3244.1 ■ Texas Home Equity Fixed/Adjustable Rate Note – 30-day Average SOFR (First Lien) Form 3442.44 Security Instrument Texas Home Equity Security Instrument (First Lien) - Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3044.1 Rider Texas Home Equity Fixed/Adjustable Rate Rider – 30-day Average SOFR (First Lien) Form 3142.44
Freddie Mac Guide 4301.7
301-16 Seller may access the Fannie Mae/Freddie Mac Texas Home Equity Uniform Instruments at https://sf.freddiemac.com/tools-learning/uniform-instruments/overview. The Seller must prepare, obtain and/or provide any and all other documentation that the Seller determines is necessary to originate Texas Equity Section 50(a)(6) Mortgages in compliance with all applicable laws. (h) Special representations and warranties Seller represents and warrants that: 1. Neither the Seller nor its Correspondents or Mortgage Brokers have been found by any federal regulatory agency to have engaged in the practice of refusing to make loans because the applicants for the loans reside in a certain area or the property proposed to secure the loans is located in a certain area 2. All refinance Mortgages that fall within the provisions of Section 50(a)(6) of the Article XVI of the Texas Constitution have been originated as Texas Equity Section 50(a)(6) Mortgages and comply with Section 50(a)(6) of Article XVI and related provisions of the Texas Constitution, as amended, and all other applicable laws. Note: Freddie Mac recommends that the Seller obtain advice from Texas legal counsel that confirms that the Seller’s lending and servicing policies, procedures and practices are in compliance with Section 50(a)(6) of Article XVI of the Texas Constitution, all other applicable Texas Constitutional provisions, statutes, court decisions, regulations and rules and applicable State and federal law. 3. The estate or interest in the Mortgaged Premises is vested in the Borrower. There is no defect in the Borrower’s title to the Mortgaged Premises. 4. The Mortgage is a valid and enforceable First Lien on the Mortgaged Premises Borrower Affidavit Texas Home Equity Affidavit and Agreement (First Lien) - Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3185. The affidavit must be recorded together with the Security Instrument and any applicable riders. Condominium Rider Texas Home Equity Condominium Rider - Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3140.44, if the property is a Condominium Unit Planned Unit Development (PUD) Rider Texas Home Equity Planned Unit Development Rider - Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3150.44, if the property is in a PUD
Freddie Mac Guide 4301.7
301-17 (i) Specific remedies Any action taken, or not taken, in connection with the origination of a Texas Equity Section 50(a)(6) Mortgage that results in any of the following (even if such action is a result of lender’s effort to cure a failure to comply with the provision of the Section 50(a)(6)) is a breach of the representations and warranties in this Section 4301.7, and Freddie Mac shall be entitled to any of the remedies stated in Section 3601.1, including the right to require the Seller to repurchase the Mortgage immediately upon Freddie Mac’s request, at a price determined in accordance with Section 3602.2(c): ■ A forfeiture of any principal or interest due under the Mortgage ■ The invalidation of the Mortgage as a First Lien ■ The abatement of accrual of interest and the Borrower’s obligations under the Mortgage ■ A reduction in the principal amount of the Mortgage ■ Any modification of the amount, interest rate, term or other provision of the Mortgage (j) Related provisions In addition to the requirements in this section, other requirements related to Texas Equity Section 50(a)(6) Mortgages are described in the following Guide provisions: Additional requirements related to Texas Equity Section 50(a)(6) Mortgages Topic Guide provisions Refinance Mortgages Chapter 4301 Title insurance Sections 4702.1, 4702.3 and 4702.5 Delivery requirements Section 6302.16 Special Servicing Sections 8104.1(a), 8201.1 and 9206.2(d)
Freddie Mac Guide 4301.7
Refinance of Mortgages secured by properties subject to an energy retrofit loan (09/04/24) For the purposes of the Guide, a Property Assessed Clean Energy (PACE) or PACE-like obligation (either referred to as a “PACE obligation”) refers to any energy retrofit loan that is: ■ Used to finance energy efficiency improvements, and
Freddie Mac Guide 4301.7
301-18 ■ Repaid through a property tax assessment For the “no cash-out” refinance of Mortgages secured by properties subject to PACE obligations that result in or provide for First Lien priority and where the PACE obligations are paid off with the Mortgage proceeds, the following requirements apply: ■ The new refinance Mortgage must be originated in accordance with the requirements of Section 4301.4 for “no cash-out” refinance Mortgages ■ The Mortgage being refinanced must be owned in whole or in part or securitized by Freddie Mac ■ The PACE obligation must be paid in full ■ The Mortgage file must include evidence that the obligation being paid off is a PACE obligation that results in or provides for First Lien priority ■ The Seller must deliver ULDD Data Point Investor Feature Identifier valid value “H61” when delivering a Freddie Mac-owned “no cash-out” refinance Mortgage used to pay a PACE obligation. See Section 6302.16(b)(ii) for more information. For the cash-out refinance of Mortgages secured by properties subject to PACE obligations and where the PACE obligations are paid off with the Mortgage proceeds, the following requirements apply: ■ The new refinance Mortgage must be originated in accordance with the requirements of Section 4301.5 for cash-out refinance Mortgages ■ If the PACE obligation results in or provides First Lien priority, the PACE obligation must be paid in full with the Mortgage proceeds Mortgages secured by properties that are energy efficient and are also subject to PACE obligations may be eligible for purchase under the provisions of Chapter 4606 for GreenCHOICE Mortgages®.