Freddie Mac Single-Family Seller/Servicer Guide 4406.10 — Requirements for Affordable Seconds®, subsidy providers and program administrators for

Freddie Mac Single-Family Seller/Servicer Guide 4406.10 — Requirements for Affordable Seconds®, subsidy providers and program administrators for

Mortgages secured by properties subject to incomebased resale restrictions (05/07/25) This section contains requirements related to: ■ Affordable Seconds® ■ Subsidy provider as the seller of the property ■ Non-profit entities ■ Subsidy providers (a) Affordable Seconds Mortgages secured by properties subject to income-based resale restrictions with Affordable Seconds used to subsidize the sales price of such properties must comply with the Affordable Seconds requirements of Section 4204.2. If the proceeds of an Affordable Second are used to subsidize the property’s sales price and, as a result, the secondary financing or financial assistance program imposes income-based resale restrictions on the property, the difference between the market sales price and the resale restricted price represents the subsidy amount provided by the Affordable Second. The terms of the Affordable Second must not restrict Freddie Mac’s ability to sell or transfer the Mortgaged Premises if Freddie Mac acquires title to the Mortgaged Premises. (b) Subsidy provider as the seller of the property A subsidy provider and/or program administrator may also be the property seller or act as the property seller on behalf of a government agency. They are not considered interested parties and the requirements for interested party contributions in Section 5501.6 do not apply. (c) Non-profit entities When a subsidy provider is a non-profit entity, the Mortgage file must contain the Internal Revenue Code 501(c) determination letter that allows for federal tax exemption of the nonprofit entity. (d) Subsidy providers By delivery of a Mortgage secured by a property subject to income-based resale restrictions, the Seller/Servicer represents and warrants that the following requirements are met: ■ The subsidy provider is, or is managed by, or is housed within, a State or local government, a government sponsored program or a non-profit corporation that is legally chartered in the State in which it is located and has a 501(c)3 tax exemption from the IRS. The subsidy provider may employ a third-party non-profit or, as allowed by the applicable jurisdiction, a for-profit corporation, as a program administrator to manage the affordable housing program, its income-based resale restrictions and controls. ■ The income-based resale restrictions are imposed by State or local governments, municipalities or non-profit entities, to create and preserve affordable housing (including entities administering governmental sponsored subsidy programs) ■ The subsidy provider or program administrator provides home counseling services or has established partnerships with at least one organization that does

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