Freddie Mac Single-Family Seller/Servicer Guide 4402.1 — Common requirements for Seller-Owned

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.