Freddie Mac Single-Family Seller/Servicer Guide 4402.1 — Common requirements for Seller-Owned Converted Mortgages and Seller-Owned Modified Mortgages

Converted Mortgages and Seller-Owned Modified Mortgages (02/04/26) This section contains information related to: ■ Eligible Mortgages ■ Special underwriting requirements ■ Special documentation requirements ■ Property value warranty requirements ■ Condominium, leasehold estate and Planned Unit Development (PUD) warranty requirements ■ Mortgage insurance requirements ■ Form 1077, Uniform Underwriting and Transmittal Summary ■ Title insurance ■ Quality control

(a) Eligible Mortgages (i) Requirements related to the Mortgage prior to conversion or modification Prior to conversion or modification, the Mortgage must have had the following characteristics: ■ The Mortgage must have been secured by a First Lien on a 1- to 4-unit Primary Residence; if the Mortgage is a Home Possible® Mortgage it must have been secured by a 1-unit Primary Residence ■ The occupancy type of the Mortgaged Premises must not have changed since the Note Date or since the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ The Mortgage met all Freddie Mac’s eligibility and underwriting requirements on the Note Date or on the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ The loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios did not exceed the limits in Section 4203.1(b) or, for Home Possible Mortgages, Section 4501.7 as of the Note Date or as of the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ The principal balance of the Mortgage has not increased since the Note Date or since the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage, and the loan amount of the Mortgage prior to modification or conversion did not exceed the maximum loan amount in Section 4203.1(c) in effect on the Note Date. The Mortgage may not be a super conforming Mortgage (as described in Chapter 4603). ■ The Mortgage was not in default and meets the requirements in Section 4201.6 ■ The Mortgage was a conventional, fully amortizing Mortgage, with an original amortization term no greater than 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 ■ The Mortgage was not an interest-only Mortgage prior to conversion or modification (ii) Requirements for the Seller-Owned Converted Mortgage or Seller-Owned Modified Mortgage A Seller-Owned Converted Mortgage or Seller-Owned Modified Mortgage must have the following characteristics: ■ The Mortgage meets all Freddie Mac’s eligibility and underwriting requirements in effect on the Delivery Date ■ The current LTV, TLTV and HTLTV ratios do not exceed the limits in Section 4203.1(b) or, for Home Possible Mortgages, Section 4501.7 as of the Delivery Date. The current ratios are calculated by dividing the UPB of the Mortgage as of the Delivery Date by the value as defined in Section 4203.1(a). ■ The Mortgage must comply with the maximum original loan amounts stated in Section 4203.1(c) in effect on the Settlement Date. The Mortgage may not be a super conforming Mortgage as described in Chapter 4603. ■ The Seller may not have assessed a prepayment penalty in connection with the conversion or modification of the Mortgage ■ The Borrowers are the same as the Borrowers on the Mortgage prior to conversion or modification, except that a Borrower who contributed no qualifying income, assets or reserves may have been removed ■ The Mortgage is a conventional, fully amortizing Mortgage and the Mortgage term may not extend beyond 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 A Mortgage originated as a Construction to Permanent Mortgage or Renovation Mortgage is a Seller-Owned Modified Mortgage if all of the following conditions are met: ■ The terms of the Permanent Financing have been modified or, for an ARM, converted to a fixed-rate Mortgage after the Effective Date of Permanent Financing ■ The Mortgage meets the requirements of this Chapter 4402 ■ The Mortgage is not secured by a Manufactured Home

(b) Special underwriting requirements The following special underwriting requirements apply to Seller-Owned Modified Mortgages that are not Home Possible Accept Mortgages and to Seller-Owned Converted Mortgages: ■ Except as modified by this chapter, the Seller is required to manually underwrite and requalify each Borrower using Freddie Mac’s eligibility and underwriting requirements in accordance with Topics 5100 through 5500 in effect as of the Delivery Date ■ A Seller-Owned Converted Mortgage or Seller-Owned Modified Mortgage is not eligible to be submitted to Loan Product Advisor® for assessment ■ The Seller-Owned Converted Mortgage or Seller-Owned Modified Mortgage will not receive any representation and warranty relief relating to the assessment of the Mortgage through Loan Product Advisor, and any previous relief provided is of no force and effect in connection with the Mortgage The following special underwriting requirements apply to all Seller-Owned Converted Mortgage and Seller-Owned Modified Mortgages: ■ The Seller-Owned Converted Mortgage or Seller-Owned Modified Mortgage eligibility and underwriting requirements must be based on the loan purpose as of the Note Date ■ The Mortgage must comply with the minimum Indicator Score requirements in Exhibit 25, Mortgages with Risk Class and/or Minimum Indicator Score Requirements, for an applicable Mortgage product and must meet the requirements of Topics 5100 through 5500. If no Borrower has a usable Credit Score and, as a result, the Mortgage does not have an Indicator Score, the Mortgage is not eligible for purchase. Home Possible Mortgages must be either Manually Underwritten Mortgages or Loan Product Advisor Accept Mortgages.

(c) Special documentation requirements The Seller must maintain in the Mortgage file: ■ All documentation required as of the Note Date or as of the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ All documentation associated with the conversion or modification of the Mortgage ■ The payment history of the Mortgage for the 12-month period prior to the Delivery Date (or the full length of the payment history, if less than 12 months) documented by a new credit report or a Servicer-generated payment history ■ Credit, employment and income documentation required to requalify each Borrower in accordance with the Standard Documentation requirements in Topic 5300 for the SellerOwned Converted Mortgage or Seller-Owned Modified Mortgage, including, but not limited to: ❑ New Uniform Residential Loan Application ❑ New credit report meeting the requirements of Section 5203.1 ❑ Verification of income and employment Exception: This requirement does not apply to Seller-Owned Modified Mortgages that are Home Possible Mortgages. ■ Any other documentation required as of the Delivery Date (e.g., the Indicator Score). If Freddie Mac required a minimum Indicator Score for the Mortgage at time of origination, the Seller must note this Indicator Score in addition to the Indicator Score required for delivery under this chapter on Form 1077. Underwriting documentation must be dated no more than 120 days prior to the modification or Conversion Date.

(d) Property value warranty requirements The following requirements must be met regarding the valuation of the Mortgaged Premises: ■ The Seller must provide a new appraisal with an effective date no more than 120 days prior to the modification or Conversion Date ■ The appraisal must meet Freddie Mac requirements ■ The Seller warrants that the property value has not declined since the effective date of the most recent appraisal if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ The new appraisal must not be used to determine the original LTV, TLTV and HTLTV ratios for the Mortgage or the current LTV, TLTV and HTLTV ratios as of the Delivery Date

(e) Condominium, leasehold estate and Planned Unit Development (PUD) warranty requirements For Mortgages secured by Condominium Units, the Seller must underwrite the Condominium Project and, based on such evaluation, represent and warrant that the Condominium Project complies with the requirements in Chapter 5701. Mortgages secured by leasehold estates must meet the special warranties in Chapter 5704 as applicable. Mortgages secured by PUDs must meet the special warranties in Chapter 5702 as applicable.

(f) Mortgage insurance requirements The following are mortgage insurance requirements for Seller-Owned Converted Mortgages and Seller-Owned Modified Mortgages: ■ For a Mortgage that had an LTV ratio greater than 80% on the Note Date or on the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage and has a current LTV ratio greater than 80%, the required level of mortgage insurance coverage will be determined by the requirements in the Guide as of the Note Date or as of the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage ■ The Seller is not required to increase existing mortgage insurance coverage to comply with Section 4701.1 if Freddie Mac’s minimum coverage amounts have increased between the (i) Note Date or the Effective Date of Permanent Financing if the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage, and (ii) Delivery Date ■ The Seller/Servicer must warrant that conversion or modification has not altered or impaired the coverage under the mortgage insurance policy. If the Seller/Servicer cannot warrant that the insurance policy has not been impaired, the Seller/Servicer must obtain an endorsement that brings the policy into compliance with the requirements of Section 4701.1. ■ Lender-paid mortgage insurance is permitted ■ The custom mortgage insurance option described in Section 4701.1 and financed mortgage insurance premiums described in Section 4701.2(a) are not permitted

(g) Form 1077 On Form 1077, or on another document in the Mortgage file, the Seller must state that the Mortgage is a Seller-Owned Converted Mortgage or a Seller-Owned Modified Mortgage. If applicable, Seller must state that the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage.

(h) Title insurance The Mortgage must meet the title insurance requirements of Chapter 4702. The Seller/Servicer must warrant that conversion or modification has not altered or impaired coverage under the title insurance policy or attorney’s opinion of title.

(i) Quality control If the Mortgage is selected for Freddie Mac’s post-funding quality control, the Seller/Servicer must provide both the original underwriting file and the underwriting file required to requalify the Borrower at the time of conversion or modification.

This section contains information related to: ■ Eligibility requirements ■ Special underwriting requirements ■ Special documentation requirements ■ Property valuation requirements ■ Condominium Unit, Cooperative Interest, leasehold estate and Planned Unit Development (PUD) warranty requirements ■ Mortgage insurance requirements ■ Form 1077, Uniform Underwriting and Transmittal Summary, requirements ■ Title insurance requirements ■ Quality control requirements ■ Special delivery requirements For purposes of this section, for Seller-Owned Converted Mortgages originated as Construction to Permanent Mortgages or Renovation Mortgages, all references to the original Note Date refer to the Effective Date of Permanent Financing.

(a) Eligibility requirements (i) Requirements related to the Mortgage prior to conversion Prior to conversion, the Mortgage must have had the following characteristics: ■ The Mortgage must have been secured by a First Lien on a 1- to 4-unit Primary Residence ■ The occupancy type of the Mortgaged Premises must not have changed since the original Note Date ■ The Mortgage met all Freddie Mac’s eligibility and underwriting requirements in effect on the original Note Date ■ The loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios did not exceed the limits in Section 4203.1(b) in effect on the original Note Date ■ The loan amount of the Mortgage prior to conversion did not exceed the maximum loan amount in Section 4203.1(c) in effect on the original Note Date. The Mortgage must not have been a super conforming Mortgage (as described in Chapter 4603). ■ The principal balance of the Mortgage has not increased since the original Note Date ■ The Mortgage was not in default and meets the requirements in Section 4201.6 ■ The Mortgage was a conventional, fully amortizing Mortgage, and the Mortgage term must not have extended beyond 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 ■ The Mortgage was a Mortgage product acceptable for sale to Freddie Mac prior to conversion (e.g., the Mortgage was not an interest-only Mortgage) (ii) Requirements for the Seller-Owned Converted Mortgage A Seller-Owned Converted Mortgage must have the following characteristics: ■ The Mortgage meets all Freddie Mac’s eligibility and underwriting requirements in effect on the Delivery Date ■ The current LTV, TLTV and HTLTV ratios do not exceed the limits in Section 4203.1(b) in effect on the Delivery Date. The current ratios are calculated by dividing the UPB of the Mortgage as of the Delivery Date by the value as defined in Section 4203.1(a). ■ The Mortgage must comply with the maximum original loan amounts stated in Section 4203.1(c) in effect on the Settlement Date ■ The Seller must not have assessed a prepayment penalty in connection with the conversion of the Mortgage ■ The Borrowers are the same as the Borrowers on the Mortgage prior to conversion, except that a Borrower who contributed no qualifying income, assets or reserves may have been removed ■ The Mortgage is a conventional, fully amortizing Mortgage and the Mortgage term must not extend beyond 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 ■ The Seller must warrant that all the original Note and Security Instrument terms for converting the Mortgage to a fixed rate of interest have been met ■ The Seller-Owned Converted Mortgage Note must be negotiable, and the entire indebtedness must be fully enforceable against the Borrower and secured by a First Lien on the Mortgaged Premises ■ The Seller-Owned Converted Mortgage Note must have a fixed rate of interest with level monthly principal and interest payments ■ A fully enforceable due-on-sale clause, such as those contained in Freddie Mac’s current fixed-rate Uniform Instruments, must be in effect after converting the Mortgage to a fixed rate of interest A Mortgage meeting the requirements of this chapter that was originated as a Construction to Permanent Mortgage or Renovation Mortgage is a Seller-Owned Converted Mortgage when the terms of the Permanent Financing have been converted from an ARM to a fixed-rate Mortgage after the Effective Date of Permanent Financing. (iii)Ineligible Mortgages Mortgages with the following characteristics are not eligible for sale to Freddie Mac as Seller-Owned Converted Mortgages: ■ CHOICERenovation® Mortgages ■ Community Land Trust Mortgages ■ Government Mortgages ■ HeritageOne® Mortgages ■ HomeOne® Mortgages ■ Home Possible® Mortgages ■ Mortgages made pursuant to employee relocation programs (as described in Chapter 4408) ■ Mortgages secured by Manufactured Homes, including Manufactured Homes that are CHOICEHomes® ■ 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 ■ Mortgages with temporary subsidy buydown plans. If the original Mortgage included a temporary subsidy buydown, any remaining funds in the buydown account at the time of conversion must be distributed in accordance with the buydown agreement. ■ Super conforming Mortgages (as described in Chapter 4603)

(b) Special underwriting requirements The following special underwriting requirements apply to Seller-Owned Converted Mortgages: ■ The Seller is required to manually underwrite and requalify each Borrower using Freddie Mac’s eligibility and underwriting requirements in accordance with Topics 5100 through 5500 in effect on the Delivery Date ■ The Mortgage is not eligible to be submitted to Loan Product Advisor® for assessment ■ The Seller-Owned Converted Mortgage will not receive any representation and warranty relief relating to the assessment of the original Mortgage through Loan Product Advisor (if applicable), and any previous relief provided is of no force and effect in connection with the Seller-Owned Converted Mortgage ■ The Mortgage eligibility and underwriting requirements must be based on the loan purpose as of the original Note Date ■ The Mortgage must comply with the minimum Indicator Score requirements in Exhibit 25, Mortgages with Risk Class and/or Minimum Indicator Score Requirements, for an applicable Mortgage product and must meet the requirements of Topics 5100 through 5500. If no Borrower has a usable Credit Score and, as a result, the Mortgage does not have an Indicator Score, the Mortgage is not eligible for sale to Freddie Mac.

(c) Special documentation requirements The Seller must maintain all the following in the Mortgage file for Seller-Owned Converted Mortgages: ■ All documentation required as of the original Note Date ■ All documentation associated with the conversion of the Mortgage ■ The payment history of the Mortgage for the 12-month period prior to the Delivery Date (or the full length of the payment history, if less than 12 months) as documented by a new credit report or a Servicer-generated payment history ■ Credit, employment and income documentation required to requalify each Borrower for the Mortgage, including, but not limited to: ❑ New Uniform Residential Loan Application ❑ New credit report meeting the requirements of Section 5203.1 ❑ Verification of income and employment ■ Any other documentation required as of the Delivery Date (e.g., the Indicator Score). If Freddie Mac required a minimum Indicator Score for the Mortgage at time of origination, the Seller must document this Indicator Score in addition to the Indicator Score required for delivery under this chapter on Form 1077. The underwriting documentation specified above must be dated no more than 120 days prior to the Conversion Date.

(d) Property valuation requirements For Seller-Owned Converted Mortgages, the following requirements must be met regarding the valuation of the Mortgaged Premises: ■ The original Mortgage met the valuation requirements of Topic 5600 in effect on the original Note Date ■ The Seller must obtain a new Traditional Appraisal Report meeting the requirements of Topic 5600 with an effective date no more than 120 days prior to the modification or Conversion Date. The new Traditional Appraisal Report must have an appraised value that is no less than: ❑ The original appraised value; or ❑ The estimated value or sales price submitted to Loan Product Advisor if the original Mortgage was assessed through Loan Product Advisor and the Seller received an automated collateral evaluation (ACE) offer or ACE+ PDR offer ■ If the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage, a new Traditional Appraisal Report does not need to be obtained, provided the Seller warrants that the value of the subject property has not declined since the effective date of the most recent appraisal report ■ The new Traditional Appraisal Report must not be used to determine the original LTV, TLTV and HTLTV ratios for the Mortgage or the current LTV, TLTV and HTLTV ratios as of the Delivery Date. Note: For ULDD Data Point Property Valuation Amount (Sort ID 83), enter the original appraised value or, if the original Mortgage was assessed through Loan Product Advisor and the Seller received an ACE offer or ACE+ PDR offer, the estimated value or sales price submitted to Loan Product Advisor. ■ In addition to the special documentation requirements in Section 4402.1(c), the Seller must maintain in the Mortgage file all property valuation documentation, including the new Traditional Appraisal Report

(e) Condominium Unit, Cooperative Interest, leasehold estate and Planned Unit Development (PUD) warranty requirements For Seller-Owned Converted Mortgages secured by Condominium Units, the Seller must have underwritten the Condominium Project and, based on such evaluation, represent and warrant that the Condominium Project complies with the requirements in Chapter 5701. For Seller-Owned Converted Mortgages that are Cooperative Share Loans, provided the Seller is approved to sell Cooperative Share Loans to Freddie Mac, they must have underwritten the Cooperative Project and, based on such evaluation, represent and warrant that the Cooperative Project complies with the requirements in Chapter 5705. Seller-Owned Converted Mortgages secured by leasehold estates must meet the special warranties in Chapter 5704, as applicable. Seller-Owned Converted Mortgages secured by PUDs must meet the special warranties in Chapter 5702, as applicable.

(f) Mortgage insurance requirements The following are mortgage insurance requirements for Seller-Owned Converted Mortgages: ■ For a Mortgage that had an LTV ratio greater than 80% on the original Note Date and has a current LTV ratio greater than 80%, the required level of mortgage insurance coverage will be determined by the requirements in Chapter 4701 in effect on the original Note Date ■ The Seller is not required to increase existing mortgage insurance coverage to comply with Section 4701.1 if Freddie Mac’s minimum coverage amounts have increased between the original Note Date and the Delivery Date ■ The Seller/Servicer must warrant that conversion has not altered or impaired the coverage under the mortgage insurance policy. If the Seller/Servicer cannot warrant that the insurance policy has not been impaired, the Seller/Servicer must obtain an endorsement that brings the policy into compliance with the requirements of Section 4701.1. ■ Lender-paid mortgage insurance described in Section 4701.2(b) is permitted ■ The custom mortgage insurance option described in Section 4701.1 and financed mortgage insurance premiums described in Section 4701.2(a) are not permitted

(g) Form 1077 requirements On Form 1077, or on another document in the Mortgage file, the Seller must state that the Mortgage is a Seller-Owned Converted Mortgage. If applicable, the Seller must state that the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage.

(h) Title insurance requirements The Seller-Owned Converted Mortgage must meet the title insurance requirements of Chapter 4702. The Seller/Servicer must warrant that conversion has not altered or impaired the coverage under the title insurance policy or attorney’s opinion of title.

(i) Quality control requirements If the Seller-Owned Converted Mortgage is selected for Freddie Mac’s post-funding quality control, the Seller/Servicer must provide both the original underwriting file and the underwriting file required to requalify the Borrower at the time of conversion.

(j) Special delivery requirements See Section 6302.19 for special delivery requirements for Seller-Owned Converted Mortgages.

This section contains information related to: ■ Eligibility requirements ■ Special underwriting requirements ■ Special documentation requirements ■ Property valuation requirements ■ Condominium Unit, Cooperative Interest, leasehold estate and Planned Unit Development (PUD) warranty requirements ■ Mortgage insurance requirements ■ Form 1077, Uniform Underwriting and Transmittal Summary, requirements ■ Title insurance requirements ■ Quality control requirements ■ Special delivery requirements For purposes of this section, for Seller-Owned Converted Mortgages originated as Construction to Permanent Mortgages or Renovation Mortgages, all references to the original Note Date refer to the Effective Date of Permanent Financing.

(a) Eligibility requirements (i) Requirements related to the Mortgage prior to conversion Prior to conversion, the Mortgage must have had the following characteristics: ■ The Mortgage must have been secured by a First Lien on a 1- to 4-unit Primary Residence ■ The occupancy type of the Mortgaged Premises must not have changed since the original Note Date ■ The Mortgage met all Freddie Mac’s eligibility and underwriting requirements in effect on the original Note Date ■ The loan-to-value (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios did not exceed the limits in Section 4203.1(b) in effect on the original Note Date ■ The loan amount of the Mortgage prior to conversion did not exceed the maximum loan amount in Section 4203.1(c) in effect on the original Note Date. The Mortgage must not have been a super conforming Mortgage (as described in Chapter 4603). ■ The principal balance of the Mortgage has not increased since the original Note Date ■ The Mortgage was not in default and meets the requirements in Section 4201.6 ■ The Mortgage was a conventional, fully amortizing Mortgage, and the Mortgage term must not have extended beyond 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 ■ The Mortgage was a Mortgage product acceptable for sale to Freddie Mac prior to conversion (e.g., the Mortgage was not an interest-only Mortgage) (ii) Requirements for the Seller-Owned Converted Mortgage A Seller-Owned Converted Mortgage must have the following characteristics: ■ The Mortgage meets all Freddie Mac’s eligibility and underwriting requirements in effect on the Delivery Date ■ The current LTV, TLTV and HTLTV ratios do not exceed the limits in Section 4203.1(b) in effect on the Delivery Date. The current ratios are calculated by dividing the UPB of the Mortgage as of the Delivery Date by the value as defined in Section 4203.1(a). ■ The Mortgage must comply with the maximum original loan amounts stated in Section 4203.1(c) in effect on the Settlement Date ■ The Seller must not have assessed a prepayment penalty in connection with the conversion of the Mortgage ■ The Borrowers are the same as the Borrowers on the Mortgage prior to conversion, except that a Borrower who contributed no qualifying income, assets or reserves may have been removed ■ The Mortgage is a conventional, fully amortizing Mortgage and the Mortgage term must not extend beyond 30 years from the date that is one month before the first payment Due Date as described in Section 4201.3 ■ The Seller must warrant that all the original Note and Security Instrument terms for converting the Mortgage to a fixed rate of interest have been met ■ The Seller-Owned Converted Mortgage Note must be negotiable, and the entire indebtedness must be fully enforceable against the Borrower and secured by a First Lien on the Mortgaged Premises ■ The Seller-Owned Converted Mortgage Note must have a fixed rate of interest with level monthly principal and interest payments ■ A fully enforceable due-on-sale clause, such as those contained in Freddie Mac’s current fixed-rate Uniform Instruments, must be in effect after converting the Mortgage to a fixed rate of interest A Mortgage meeting the requirements of this chapter that was originated as a Construction to Permanent Mortgage or Renovation Mortgage is a Seller-Owned Converted Mortgage when the terms of the Permanent Financing have been converted from an ARM to a fixed-rate Mortgage after the Effective Date of Permanent Financing. (iii)Ineligible Mortgages Mortgages with the following characteristics are not eligible for sale to Freddie Mac as Seller-Owned Converted Mortgages: ■ CHOICERenovation® Mortgages ■ CHOICEReno eXPress® Mortgages ■ Community Land Trust Mortgages ■ Government Mortgages ■ HeritageOne® Mortgages ■ HomeOne® Mortgages ■ Home Possible® Mortgages ■ Mortgages made pursuant to employee relocation programs (as described in Chapter 4408) ■ Mortgages secured by Manufactured Homes, including Manufactured Homes that are CHOICEHomes® ■ 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 ■ Mortgages with temporary subsidy buydown plans. If the original Mortgage included a temporary subsidy buydown, any remaining funds in the buydown account at the time of conversion must be distributed in accordance with the buydown agreement. ■ Super conforming Mortgages (as described in Chapter 4603)

(b) Special underwriting requirements The following special underwriting requirements apply to Seller-Owned Converted Mortgages: ■ The Seller is required to manually underwrite and requalify each Borrower using Freddie Mac’s eligibility and underwriting requirements in accordance with Topics 5100 through 5500 in effect on the Delivery Date ■ The Mortgage is not eligible to be submitted to Loan Product Advisor® for assessment ■ The Seller-Owned Converted Mortgage will not receive any representation and warranty relief relating to the assessment of the original Mortgage through Loan Product Advisor (if applicable), and any previous relief provided is of no force and effect in connection with the Seller-Owned Converted Mortgage ■ The Mortgage eligibility and underwriting requirements must be based on the loan purpose as of the original Note Date ■ The Mortgage must comply with the minimum Indicator Score requirements in Exhibit 25, Mortgages with Risk Class and/or Minimum Indicator Score Requirements, for an applicable Mortgage product and must meet the requirements of Topics 5100 through 5500. If no Borrower has a usable Credit Score and, as a result, the Mortgage does not have an Indicator Score, the Mortgage is not eligible for sale to Freddie Mac.

(c) Special documentation requirements The Seller must maintain all the following in the Mortgage file for Seller-Owned Converted Mortgages: ■ All documentation required as of the original Note Date ■ All documentation associated with the conversion of the Mortgage ■ The payment history of the Mortgage for the 12-month period prior to the Delivery Date (or the full length of the payment history, if less than 12 months) as documented by a new credit report or a Servicer-generated payment history ■ Credit, employment and income documentation required to requalify each Borrower for the Mortgage, including, but not limited to: ❑ New Uniform Residential Loan Application ❑ New credit report meeting the requirements of Section 5203.1 ❑ Verification of income and employment ■ Any other documentation required as of the Delivery Date (e.g., the Indicator Score). If Freddie Mac required a minimum Indicator Score for the Mortgage at time of origination, the Seller must document this Indicator Score in addition to the Indicator Score required for delivery under this chapter on Form 1077. The underwriting documentation specified above must be dated no more than 120 days prior to the Conversion Date.

(d) Property valuation requirements For Seller-Owned Converted Mortgages, the following requirements must be met regarding the valuation of the Mortgaged Premises: ■ The original Mortgage met the valuation requirements of Topic 5600 in effect on the original Note Date ■ The Seller must obtain a new Traditional Appraisal Report meeting the requirements of Topic 5600 with an effective date no more than 120 days prior to the modification or Conversion Date. The new Traditional Appraisal Report must have an appraised value that is no less than: ❑ The original appraised value; or ❑ The estimated value or sales price submitted to Loan Product Advisor if the original Mortgage was assessed through Loan Product Advisor and the Seller received an automated collateral evaluation (ACE) offer or ACE+ PDR offer ■ If the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage, a new Traditional Appraisal Report does not need to be obtained, provided the Seller warrants that the value of the subject property has not declined since the effective date of the most recent appraisal report ■ The new Traditional Appraisal Report must not be used to determine the original LTV, TLTV and HTLTV ratios for the Mortgage or the current LTV, TLTV and HTLTV ratios as of the Delivery Date. Note: For ULDD Data Point Property Valuation Amount (Sort ID 83), enter the original appraised value or, if the original Mortgage was assessed through Loan Product Advisor and the Seller received an ACE offer or ACE+ PDR offer, the estimated value or sales price submitted to Loan Product Advisor. ■ In addition to the special documentation requirements in Section 4402.1(c), the Seller must maintain in the Mortgage file all property valuation documentation, including the new Traditional Appraisal Report

(e) Condominium Unit, Cooperative Interest, leasehold estate and Planned Unit Development (PUD) warranty requirements For Seller-Owned Converted Mortgages secured by Condominium Units, the Seller must have underwritten the Condominium Project and, based on such evaluation, represent and warrant that the Condominium Project complies with the requirements in Chapter 5701. For Seller-Owned Converted Mortgages that are Cooperative Share Loans, provided the Seller is approved to sell Cooperative Share Loans to Freddie Mac, they must have underwritten the Cooperative Project and, based on such evaluation, represent and warrant that the Cooperative Project complies with the requirements in Chapter 5705. Seller-Owned Converted Mortgages secured by leasehold estates must meet the special warranties in Chapter 5704, as applicable. Seller-Owned Converted Mortgages secured by PUDs must meet the special warranties in Chapter 5702, as applicable.

(f) Mortgage insurance requirements The following are mortgage insurance requirements for Seller-Owned Converted Mortgages: ■ For a Mortgage that had an LTV ratio greater than 80% on the original Note Date and has a current LTV ratio greater than 80%, the required level of mortgage insurance coverage will be determined by the requirements in Chapter 4701 in effect on the original Note Date ■ The Seller is not required to increase existing mortgage insurance coverage to comply with Section 4701.1 if Freddie Mac’s minimum coverage amounts have increased between the original Note Date and the Delivery Date ■ The Seller/Servicer must warrant that conversion has not altered or impaired the coverage under the mortgage insurance policy. If the Seller/Servicer cannot warrant that the insurance policy has not been impaired, the Seller/Servicer must obtain an endorsement that brings the policy into compliance with the requirements of Section 4701.1. ■ Lender-paid mortgage insurance described in Section 4701.2(b) is permitted ■ The custom mortgage insurance option described in Section 4701.1 and financed mortgage insurance premiums described in Section 4701.2(a) are not permitted

(g) Form 1077 requirements On Form 1077, or on another document in the Mortgage file, the Seller must state that the Mortgage is a Seller-Owned Converted Mortgage. If applicable, the Seller must state that the Mortgage was originated as a Construction to Permanent Mortgage or Renovation Mortgage.

(h) Title insurance requirements The Seller-Owned Converted Mortgage must meet the title insurance requirements of Chapter 4702. The Seller/Servicer must warrant that conversion has not altered or impaired the coverage under the title insurance policy or attorney’s opinion of title.

(i) Quality control requirements If the Seller-Owned Converted Mortgage is selected for Freddie Mac’s post-funding quality control, the Seller/Servicer must provide both the original underwriting file and the underwriting file required to requalify the Borrower at the time of conversion.

(j) Special delivery requirements See Section 6302.19 for special delivery requirements for Seller-Owned Converted Mortgages.