Freddie Mac Single-Family Seller/Servicer Guide 4606.1 — Eligible Mortgages and improvements, and use of Mortgage proceeds

Freddie Mac Single-Family Seller/Servicer Guide 4606.1 — Eligible Mortgages and improvements, and use of Mortgage proceeds

Effective 2024-11-06 · Freddie Mac's stamp for this section

Mortgages that meet the requirements of this chapter and the Seller’s other Purchase Documents are eligible for sale to Freddie Mac as GreenCHOICE Mortgages®. This section contains requirements related to: ■ Eligible Mortgages ■ Eligible improvements ■ Use of Mortgage proceeds (a) Eligible Mortgages The Mortgage must be: ■ A First Lien Mortgage ■ A purchase transaction Mortgage or a “no cash-out” refinance Mortgage, and ■ Secured by a property with eligible improvements (b) Eligible improvements For purposes of this chapter, “eligible improvements” means: ■ Energy and/or water efficiency improvements, including: ❑ Renewable energy sources (e.g., solar panels, hydropower systems, wind turbines and geothermal systems) ❑ ENERGY STAR Energy Efficient Products listed at https://www.energystar.gov/products/products-list ❑ Electrification improvements (e.g., replacing equipment or appliances that run on natural gas or other combustible fuel with efficient, all-electric technologies) ■ Health and safety improvements (e.g., building-code compliance if cited by the applicable jurisdiction) ■ Resiliency and preventative improvements to either repair natural disaster damage or improve a home’s ability to withstand future natural disasters ■ Basic improvements, such as: ❑ Adding ceiling, wall or floor insulation ❑ Air conditioning/heating replacement with high efficiency ❑ Air sealing ❑ Caulking or weather stripping ❑ Heat pumps and induction cooktops ❑ High efficiency refrigerators/freezers, water heaters and light bulbs ❑ Hurricane fabric or shutters ❑ Low-flow water fixtures ❑ Programmable thermostats ❑ Solar water heaters ❑ Ventilation; radon mitigation; and asbestos, mold or lead abatement ❑ Window and door replacement Eligible improvements must: ■ Be permanently affixed to the property, except for: ❑ Appliances used in a kitchen, laundry room or utility room ❑ Health and safety improvements ■ Not impact the structural integrity of the property for Mortgages secured by Manufactured Homes, including Manufactured Homes that are CHOICEHomes® (c) Use of Mortgage proceeds The Mortgage proceeds must be used as follows: ■ For a purchase transaction Mortgage, to finance the purchase, installation, repair or upgrade of eligible improvements, to be completed after the Note Date ■ For a “no cash-out” refinance Mortgage, to finance the: ❑ Purchase, installation, repair or upgrade of eligible improvements, to be completed after the Note Date; or ❑ Payment (in whole or in part) towards an existing debt incurred by the Borrower to finance the purchase, installation, repair or upgrade of eligible improvements (such debt, an “Existing Debt” for purposes of this chapter), completed before the Note Date Fees associated with the purchase, installation, repair or upgrade of eligible improvements, including any fees related to plans and specifications, permits, title updates, appraisals, draw inspections or final inspections, as applicable, may be financed as part of the Mortgage. The cost of an energy report, if required, may also be financed.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4606.1 — Eligible Mortgages and improvements, and use of Mortgage proceeds · source URL · snapshot 4c94f67729042dd6