Freddie Mac Single-Family Seller/Servicer Guide 4504.5 — General eligibility requirements for HeritageOne® Mortgages

Freddie Mac Single-Family Seller/Servicer Guide 4504.5 — General eligibility requirements for HeritageOne® Mortgages

Effective 2026-04-12 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Loan limits ■ Mortgage purpose ■ Temporary subsidy buydown plans ■ Secondary financing ■ Rental income ■ Homebuyer education ■ Landlord education for 2- to 4-unit properties ■ Resale restrictions ■ Right of first refusal The following general eligibility requirements apply to HeritageOne® Mortgages: (a) Loan limits The loan amount may not exceed the applicable maximum original loan amount specified in Section 4203.1(c). (a) Mortgage purpose The Mortgage must be either a purchase transaction Mortgage or a “no cash-out” refinance Mortgage. (b) Temporary subsidy buydown plans Temporary subsidy buydown plans described in Section 4204.3 are permitted if the Mortgage is: ■ Secured by a 1-unit property; or ■ An Accept Mortgage secured by a 2-unit property (c) Secondary financing The following are permitted secondary financing arrangements: ■ Secondary financing that meets the requirements of Section 4204.1 ■ Affordable Seconds® that meet the requirements of Section 4204.2, except that: ❑ For Affordable Seconds provided by an Agency, although Section 4204.2(a)(i)(A) provides otherwise, the Agency may be affiliated with, under contract to or financed (directly or indirectly) by the Seller as the originating lender ❑ For Seller-funded Affordable Seconds, although Section 4204.2(a)(i)(B) provides otherwise, the First Lien Mortgage cannot be a Home Possible® Mortgage and may be a HeritageOne Mortgage ❑ For Mortgages secured by Manufactured Homes and originated with Affordable Seconds, although Section 5703.5(c) provides otherwise, the Mortgage cannot be a Home Possible Mortgage and may be a HeritageOne Mortgage For a Mortgage with a temporary subsidy buydown plan, any secondary financing must have a fixed interest rate. (d) Rental income When determining the stable monthly income (as described in Section 5301.1), rental income may be considered if generated from: ■ A subject 1-unit property, with or without an ADU, if the rental income requirements in Section 4501.6(b) or 5306.1(h) are met ■ An ADU on a subject 1-unit property, if the rental income requirements in Section 5306.1(g) are met ■ A subject 2- to 4-unit property, if the rental income requirements in Section 5306.1(e) are met and excluding any rental income generated from an ADU ■ A non-subject investment property, if the rental income requirements in Section 5306.1(c) are met (e) Homebuyer education For purchase transaction Mortgages where all occupying Borrowers are First-Time Homebuyers: ■ At least one occupying Borrower must complete a homeownership education program before the Note Date or, for Construction to Permanent Mortgages and Renovation Mortgages, the Effective Date of Permanent Financing; and ■ As referenced in Section 5103.4(b), homeownership education may be provided by a Native community development financial institution (CDFI), even if the Native CDFI is the originating lender and/or the Seller Note: See Section 5103.4 for other requirements related to homeownership education. (f) Landlord education for 2- to 4-unit properties For purchase transaction Mortgages, at least one qualifying Borrower must: ■ Complete a landlord education program before the Note Date or, for Construction to Permanent Mortgages and Renovation Mortgages, the Effective Date of Permanent Financing; or ■ Have at least one year of previous landlord experience For “no cash-out” refinance Mortgages, landlord education is not required but is recommended for Borrowers who have not previously completed a landlord education program. Landlord education may not be provided by an interested party to the Mortgage transaction, except for a Native CDFI. A Native CDFI may provide landlord education even if the Native CDFI is the originating lender and/or the Seller. (g) Resale restrictions The Mortgaged Premises may be subject to resale restrictions if the requirements of Chapter 4406 are met. (h) Right of first refusal Any right of first refusal must run to: ■ The Eligible Native American Tribe within whose Tribal Area the Mortgaged Premises is located; and ■ Any lessor other than the Eligible Native American Tribe (if applicable) When the Mortgage is subject to foreclosure proceedings and/or an approved short sale, the right of first refusal may not continue beyond 120 days after the date of written notice that the Mortgaged Premises is being offered for sale. Any right of first refusal may not adversely impact the rights of Freddie Mac or the Seller/Servicer to foreclose or acquire title to the Mortgaged Premises, accept a deed or assignment in lieu of foreclosure or transfer title to or lease the Mortgaged Premises, if acquired.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4504.5 — General eligibility requirements for HeritageOne® Mortgages · source URL · snapshot 4c94f67729042dd6