Freddie Mac Single-Family Seller/Servicer Guide 4408.1 — Mortgages made pursuant to employee relocation programs

Refer to Bulletin 2026-10, which announced updates related to accumulated assets as income. Sellers may implement the new requirements prior to the mandatory February 3, 2027 version of this section. The provisions of this chapter apply to Mortgages made pursuant to an employee relocation program. This section contains: ■ Eligibility requirements ■ Ineligible Mortgages ■ Special occupancy requirements ■ Special underwriting requirements ■ Additional documentation requirements ■ Special pooling and delivery requirements

(a) Eligibility requirements These Mortgages must be made to a newly hired or transferred employee to finance the purchase of a 1- to 4-unit Primary Residence at a new job location pursuant to an employee relocation program that: ■ Establishes the terms and conditions under which the employer relocates employees, and ■ Is administered by the employer or its agent

(b) Ineligible Mortgages The following are ineligible Mortgages: ■ Caution Mortgages ■ Community Land Trust Mortgages ■ Government Mortgages ■ Seller-Owned Converted Mortgages ■ Seller-Owned Modified Mortgages

(c) Special occupancy requirements A Mortgage is considered to be secured by a Primary Residence when the Borrower occupies all or part of the Mortgaged Premises as a Primary Residence no later than 180 days after the Note Date or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages. If the occupancy of the Mortgaged Premises is delayed more than 90 days, the Seller must maintain in the Mortgage file a signed statement from the Borrower confirming their intent to occupy the property within 180 days of the Note Date or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages.

(d) Special underwriting requirements (i) Underwriting methods The Mortgage must be one of the following: ■ An Accept Mortgage ■ A Manually Underwritten Mortgage, if the Mortgage was: ❑ Never submitted to Loan Product Advisor® or ❑ Submitted to Loan Product Advisor and did not receive a Risk Class (ii) Establishing Borrower credit reputation with foreign credit references for Manually Underwritten Mortgages For Manually Underwritten Mortgages, when the Borrower does not have the minimum required number of payment references established in the United States as required in Section 5202.1(a)(i), or when the Borrower does not have a usable Credit Score, the Seller may determine that the Borrower has established an acceptable credit reputation in a foreign country if all of the following apply: ■ The determination is based on a minimum of three Tradelines. (Noncredit Payment References established outside of the United States are not eligible.) ■ The Mortgage file contains a credit report meeting the requirements of Section 5203.1 and confirming that the Borrower does not have a sufficient number of payment references established in the United States (iii)Current Primary Residence pending sale If the Borrower’s current Primary Residence is pending sale and the sale will not close before the Note Date of the Mortgage (or, for Construction to Permanent Mortgages and Renovation Mortgages, the Effective Date of Permanent Financing), the monthly payment amount for the property pending sale may be excluded from the monthly debt payment-to-income (DTI) ratio if the employee relocation program terms include a buyout agreement for the purchase of the Borrower’s current Primary Residence and one of the following applies: ■ The buyout agreement is executed by the Borrower ■ The buyout agreement is not executed, and the Seller maintains in the Mortgage file a signed statement from the Borrower indicating their intention to accept the buyout agreement if the current Primary Residence is not sold prior to the expiration date of the buyout agreement. Additionally, one of the following must apply: ❑ The Borrower has sufficient reserves, in addition to any other reserves required in the Guide, to pay the monthly payment amount for the property pending sale until the expiration date of the buyout offer as indicated in the buyout agreement ❑ The documented relocation program terms include a provision that the Borrower’s employer will make the monthly payments associated with the property until it is sold (iv) Special income and asset requirements (A) Housing allowance A housing allowance provided as part of an employee relocation program may be considered stable monthly income and may be included in the Borrower’s gross monthly income without documented evidence of the most recent 12 months’ receipt, provided that all other requirements for stable monthly income and asset qualification sources in Chapter 5301 and employed income in Chapter 5303 are met. (B) 10-day pre-closing verification (10-day PCV) For Borrowers transferring to a new location with the same employer, a 10-day PCV is not required. (C) Borrower’s revolving credit card (charges/cash advances) or unsecured line of credit The amounts charged by a Borrower on credit cards to pay fees associated with the Mortgage application process (e.g., origination fees, commitment fees, lock-in fees, appraisal, credit report and flood certifications) or a cash advance taken by the Borrower on a revolving credit card account or an unsecured line of credit to pay such fees may be considered Borrower personal funds as described in Section 5501.3. If the employee relocation program provides that the employer will reimburse the Borrower for the fees that were charged or paid by the Borrower, then all of the following must apply: ■ There is no maximum limit on the amount of fees associated with the Mortgage application process that may be charged or advanced by the Borrower if the employee relocation agreement specifically identifies such fees as subject to reimbursement by the employer ■ The Borrower is not required to have sufficient verified funds to pay these fees ■ No estimated payment based on the amount charged or advanced must be included when determining the Borrower’s monthly DTI ratio as described in Section 5401.2 (D) Employer Assisted Homeownership (EAH) Benefit An EAH Benefit may be used as a source of funds to qualify the Borrower for the Mortgage if the terms of the EAH Benefit meet the requirements of Section 5501.5, except as modified below. (I) Unsecured loan If the monthly loan payment of principal and interest or interest only begins on or after the 24th monthly payment under the First Lien Mortgage, the amount of the monthly payment may be excluded from the monthly DTI ratio; otherwise, the required monthly payments must be included in the monthly DTI ratio. (II) Secondary financing If the monthly payment of principal and interest or interest only begins on or after the 24th monthly payment under the First Lien Mortgage, the amount of the monthly payment may be excluded from the monthly housing expense-to-income ratio; otherwise, the required monthly payments must be included in the monthly housing expense-to-income ratio. (E) Equity advance An equity advance made to the Borrower prior to the sale of their current Primary Residence may be used as a source of funds to qualify the Borrower for the Mortgage provided all of the following documentation is included in the Mortgage file: ■ An executed buyout agreement or other verification of the Borrower’s eligibility for a buyout agreement as part of the relocation program ■ Documentation of the equity advance terms (e.g., promissory note), which must not require the Borrower to make monthly payments and must include the amount of the advanced funds ■ Confirmation of receipt of the advanced funds (e.g., a copy of the Borrower’s bank statement reflecting the deposited funds, a statement from the title company indicating the funds are being held in escrow, a Settlement/Closing Disclosure Statement for the subject transaction)

(e) Additional documentation requirements The Seller must maintain in the Mortgage file the following documentation in addition to any other documentation required in the Guide and the Seller’s Purchase Documents: ■ Complete documentation of the employee relocation program detailing the relocation benefits, including the employer’s contribution to Mortgage financing, such as: ❑ Closing Costs ❑ Buydowns or other Mortgage financing costs ❑ Payment of expenses incurred in selling the employee’s former residence, if applicable, and documentation evidencing that the Borrower is eligible for the employee relocation program or ■ The employer’s agreement with the Borrower detailing the terms of the employee relocation program and any related benefits, including the employer’s contribution to Mortgage financing, such as: ❑ Closing Costs ❑ Buydowns or other Mortgage financing costs ❑ Payment of expenses incurred in selling the employee’s former residence, if applicable

(f) Special pooling and delivery requirements Fixed-rate Mortgages made pursuant to an employee relocation program that meet the definition of a relocation Mortgage in Section 6202.3(e)(iv) must comply with the pooling requirements in Section 6202.3(e)(iv) and the delivery requirements in Section 6302.17. There are no special delivery or pooling requirements for relocation ARMs.

The provisions of this chapter apply to Mortgages made pursuant to an employee relocation program. This section contains: ■ Eligibility requirements ■ Ineligible Mortgages ■ Special occupancy requirements ■ Special underwriting requirements ■ Additional documentation requirements ■ Special pooling and delivery requirements

(a) Eligibility requirements These Mortgages must be made to a newly hired or transferred employee to finance the purchase of a 1- to 4-unit Primary Residence at a new job location pursuant to an employee relocation program that: ■ Establishes the terms and conditions under which the employer relocates employees, and ■ Is administered by the employer or its agent

(b) Ineligible Mortgages The following are ineligible Mortgages: ■ Caution Mortgages ■ Community Land Trust Mortgages ■ Government Mortgages ■ Seller-Owned Converted Mortgages ■ Seller-Owned Modified Mortgages

(c) Special occupancy requirements A Mortgage is considered to be secured by a Primary Residence when the Borrower occupies all or part of the Mortgaged Premises as a Primary Residence no later than 180 days after the Note Date or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages. If the occupancy of the Mortgaged Premises is delayed more than 90 days, the Seller must maintain in the Mortgage file a signed statement from the Borrower confirming their intent to occupy the property within 180 days of the Note Date or the Effective Date of Permanent Financing for Construction to Permanent Mortgages and Renovation Mortgages.

(d) Special underwriting requirements (i) Underwriting methods The Mortgage must be one of the following: ■ An Accept Mortgage ■ A Manually Underwritten Mortgage, if the Mortgage was: ❑ Never submitted to Loan Product Advisor® or ❑ Submitted to Loan Product Advisor and did not receive a Risk Class (ii) Establishing Borrower credit reputation with foreign credit references for Manually Underwritten Mortgages For Manually Underwritten Mortgages, when the Borrower does not have the minimum required number of payment references established in the United States as required in Section 5202.1(a)(i), or when the Borrower does not have a usable Credit Score, the Seller may determine that the Borrower has established an acceptable credit reputation in a foreign country if all of the following apply: ■ The determination is based on a minimum of three Tradelines. (Noncredit Payment References established outside of the United States are not eligible.) ■ The Mortgage file contains a credit report meeting the requirements of Section 5203.1 and confirming that the Borrower does not have a sufficient number of payment references established in the United States (iii)Current Primary Residence pending sale If the Borrower’s current Primary Residence is pending sale and the sale will not close before the Note Date of the Mortgage (or, for Construction to Permanent Mortgages and Renovation Mortgages, the Effective Date of Permanent Financing), the monthly payment amount for the property pending sale may be excluded from the monthly debt payment-to-income (DTI) ratio if the employee relocation program terms include a buyout agreement for the purchase of the Borrower’s current Primary Residence and one of the following applies: ■ The buyout agreement is executed by the Borrower ■ The buyout agreement is not executed, and the Seller maintains in the Mortgage file a signed statement from the Borrower indicating their intention to accept the buyout agreement if the current Primary Residence is not sold prior to the expiration date of the buyout agreement. Additionally, one of the following must apply: ❑ The Borrower has sufficient reserves, in addition to any other reserves required in the Guide, to pay the monthly payment amount for the property pending sale until the expiration date of the buyout offer as indicated in the buyout agreement ❑ The documented relocation program terms include a provision that the Borrower’s employer will make the monthly payments associated with the property until it is sold (iv) Special income and asset requirements (A) Housing allowance A housing allowance provided as part of an employee relocation program may be considered stable monthly income and may be included in the Borrower’s gross monthly income without documented evidence of the most recent 12 months’ receipt, provided that all other requirements for stable monthly income and accumulated assets as income in Chapter 5301 and employed income in Chapter 5303 are met. (B) 10-day pre-closing verification (10-day PCV) For Borrowers transferring to a new location with the same employer, a 10-day PCV is not required. (C) Borrower’s revolving credit card (charges/cash advances) or unsecured line of credit The amounts charged by a Borrower on credit cards to pay fees associated with the Mortgage application process (e.g., origination fees, commitment fees, lock-in fees, appraisal, credit report and flood certifications) or a cash advance taken by the Borrower on a revolving credit card account or an unsecured line of credit to pay such fees may be considered Borrower personal funds as described in Section 5501.3. If the employee relocation program provides that the employer will reimburse the Borrower for the fees that were charged or paid by the Borrower, then all of the following must apply: ■ There is no maximum limit on the amount of fees associated with the Mortgage application process that may be charged or advanced by the Borrower if the employee relocation agreement specifically identifies such fees as subject to reimbursement by the employer ■ The Borrower is not required to have sufficient verified funds to pay these fees ■ No estimated payment based on the amount charged or advanced must be included when determining the Borrower’s monthly DTI ratio as described in Section 5401.2 (D) Employer Assisted Homeownership (EAH) Benefit An EAH Benefit may be used as a source of funds to qualify the Borrower for the Mortgage if the terms of the EAH Benefit meet the requirements of Section 5501.5, except as modified below. (I) Unsecured loan If the monthly loan payment of principal and interest or interest only begins on or after the 24th monthly payment under the First Lien Mortgage, the amount of the monthly payment may be excluded from the monthly DTI ratio; otherwise, the required monthly payments must be included in the monthly DTI ratio. (II) Secondary financing If the monthly payment of principal and interest or interest only begins on or after the 24th monthly payment under the First Lien Mortgage, the amount of the monthly payment may be excluded from the monthly housing expense-to-income ratio; otherwise, the required monthly payments must be included in the monthly housing expense-to-income ratio. (E) Equity advance An equity advance made to the Borrower prior to the sale of their current Primary Residence may be used as a source of funds to qualify the Borrower for the Mortgage provided all of the following documentation is included in the Mortgage file: ■ An executed buyout agreement or other verification of the Borrower’s eligibility for a buyout agreement as part of the relocation program ■ Documentation of the equity advance terms (e.g., promissory note), which must not require the Borrower to make monthly payments and must include the amount of the advanced funds ■ Confirmation of receipt of the advanced funds (e.g., a copy of the Borrower’s bank statement reflecting the deposited funds, a statement from the title company indicating the funds are being held in escrow, a Settlement/Closing Disclosure Statement for the subject transaction)

(e) Additional documentation requirements The Seller must maintain in the Mortgage file the following documentation in addition to any other documentation required in the Guide and the Seller’s Purchase Documents: ■ Complete documentation of the employee relocation program detailing the relocation benefits, including the employer’s contribution to Mortgage financing, such as: ❑ Closing Costs ❑ Buydowns or other Mortgage financing costs ❑ Payment of expenses incurred in selling the employee’s former residence, if applicable, and documentation evidencing that the Borrower is eligible for the employee relocation program or ■ The employer’s agreement with the Borrower detailing the terms of the employee relocation program and any related benefits, including the employer’s contribution to Mortgage financing, such as: ❑ Closing Costs ❑ Buydowns or other Mortgage financing costs ❑ Payment of expenses incurred in selling the employee’s former residence, if applicable

(f) Special pooling and delivery requirements Fixed-rate Mortgages made pursuant to an employee relocation program that meet the definition of a relocation Mortgage in Section 6202.3(e)(iv) must comply with the pooling requirements in Section 6202.3(e)(iv) and the delivery requirements in Section 6302.17. There are no special delivery or pooling requirements for relocation ARMs.