Freddie Mac Single-Family Seller/Servicer Guide 4406.4 — Appraisal requirements for Mortgages secured by properties subject to resale restrictions

Freddie Mac Single-Family Seller/Servicer Guide 4406.4 — Appraisal requirements for Mortgages secured by properties subject to resale restrictions

Effective 2026-02-04 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Appraisal report conditions ■ Appraisal reports when resale restrictions survive foreclosure or recordation of a deed-in-lieu of foreclosure ■ Appraisal reports when resale restrictions terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure (a) Appraisal report conditions For properties subject to resale restrictions, the appraisal report must: ■ Note the existence of any resale restrictions, and ■ Include an analysis that addresses any impact the resale restrictions have on the property’s value or marketability Mortgages secured by properties subject to age-based resale restrictions may qualify for automated collateral evaluation (ACE) or ACE+ PDR. See Section 5602.3 for details regarding ACE or Section 5602.4 for ACE+ PDR. (b) Appraisal reports when resale restrictions survive foreclosure or recordation of a deedin-lieu of foreclosure For Mortgages secured by properties subject to resale restrictions that survive foreclosure or recordation of a deed-in-lieu of foreclosure, the appraisal report must: ■ Reflect the impact the resale restrictions have on the subject property’s value, and ■ When available, be supported by comparable sales with similar resale restrictions If recent comparable sales with similar resale restrictions are not available in the Market Area, the appraiser should: ❑ Use similarly restricted older comparable sales from the Market Area, or ❑ Consider recent and older similarly restricted sales from competing Market Areas as comparable sales or as supporting market data When comparable sales with similar resale restrictions are not available, as long as the appraiser can justify and support their use in the appraisal report, the appraiser may use comparable sales: ❑ With different resale restrictions, or ❑ Without resale restrictions (c) Appraisal reports when resale restrictions terminate upon foreclosure (or expiration of any applicable legally required foreclosure redemption period) or recordation of a deed-in-lieu of foreclosure For Mortgages secured by properties subject to 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, the appraisal report must reflect the market value of the property without resale restrictions by using comparable sales that are not resale restricted. The Seller, or any third party authorized by the Seller, must ensure that the Borrower and appraiser are aware of the resale restrictions and must advise the appraiser that he or she must include the following statement in the appraisal report: “This appraisal is made on the basis of a hypothetical condition that the property rights being appraised are without resale and other restrictions that are terminated automatically upon the latter of foreclosure or the expiration of any applicable redemption period, or upon recordation of a deed-in-lieu of foreclosure.”

Source: Freddie Mac Single-Family Seller/Servicer Guide 4406.4 — Appraisal requirements for Mortgages secured by properties subject to resale restrictions · source URL · snapshot 4c94f67729042dd6