Freddie Mac Single-Family Seller/Servicer Guide 4606.4 — Energy reports

Freddie Mac Single-Family Seller/Servicer Guide 4606.4 — Energy reports

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

This section contains requirements related to: ■ Eligible energy reports ■ Energy report conditions ■ Energy report exceptions when proceeds are used to finance renewable energy sources ■ Energy report alternatives For Mortgages used to finance eligible improvements with an aggregate cost less than or equal to $6,500, an energy report is not required. For Mortgages used to finance eligible improvements with an aggregate cost greater than $6,500, an energy report must be obtained and retained in the Mortgage file. An energy report is not required for a “no cash-out” refinance Mortgage used to pay an Existing Debt. (a) Eligible energy reports Energy reports must be one of the following: ■ Home Energy Rating Systems (HERS) report completed by a certified Residential Energy Services Network (RESNET®) Home Energy Rater reflecting a HERS Index of 90 or below (http://www.resnet.us/directory/search) ■ Department of Energy Home (DOE) Energy Score Report completed by an independent Home Energy Score Certified Assessor™ reflecting a DOE Home Energy Score of six or greater (https://betterbuildingssolutioncenter.energy.gov/home-energy-score/homeenergy-score-map) ■ Comparable rating report or audit completed by a certified home energy rater or consultant indicating the property is a high-performing energy efficient property (b) Energy report conditions Energy reports must: ■ Identify the energy improvements and expected cost to complete these improvements ■ Specify the actual or expected monthly or annual energy savings ■ Verify that the energy improvements are cost effective. Energy improvements are cost effective when the expected cost to complete these improvements, including maintenance, is less than the present value of the energy saved over the useful life of these improvements, and ■ Be dated no more than 24 months before or 24 months after the Note Date, as applicable The cost of the energy report may be included in the total cost of the eligible improvements and must be identified on the Settlement Statement if the Borrower is to be reimbursed. (c) Energy report exceptions when proceeds are used to finance renewable energy sources If the energy improvements are related to renewable energy sources (e.g., solar panels, hydropower systems, wind turbines or geothermal systems), and an energy report is not available to demonstrate their cost effectiveness, the cost effectiveness may be demonstrated by: 1. Obtaining copies of all invoices and/or receipts, as applicable, for the cost of the systems or devices, and 2. Comparing the cost of the systems or devices, including maintenance, to the income produced over the life of the systems or devices When the income produced exceeds the net cost (including any tax credits and rebates) of the systems or devices, the cost effectiveness has been demonstrated. The appraiser must document the projected income by utilizing PV Value, Ei Value or a similar tool as referenced in Section 5601.4. (d) Energy report alternatives For certain eligible improvements, the Seller/Servicer may obtain, and, if obtained, must retain in the Mortgage file, alternative documentation in lieu of an energy report: Alternative documentation in lieu of an energy report Improvement type Permitted alternative documentation ENERGY STAR Energy Efficient Products Documentation (e.g., invoices, receipts, printout(s) showing the eligible improvements in the list of ENERGY STAR Energy Efficient Products) verifying the eligible improvements are ENERGY STAR Energy Efficient Products. Health and safety improvements At least one of the following: ■ Copies of all invoices and/or receipts, as applicable, documenting the cost of the eligible improvements as well as their expected impact to health and safety (e.g., for a radon mitigation system, its expected impact on the radon levels in the home) ■ A completed United States Environment Protection Agency (EPA) Indoor airPLUS (Version 1 (Rev. 04) or higher) Verification Checklist Resiliency and preventative improvements to either repair natural disaster damage or improve a home’s ability to withstand future natural disasters At least one of the following: ■ Copies of all invoices and/or receipts, as applicable, documenting the cost of the eligible improvements. This should include invoices from a contractor for completing the repairs or improving the home, if applicable. ■ An Insurance Institute for Business & Home Safety (IBHS) FORTIFIED HomeTM designation certificate (i.e., FORTIFIED Roof, FORTIFIED Silver or FORTIFIED Gold)

Source: Freddie Mac Single-Family Seller/Servicer Guide 4606.4 — Energy reports · source URL · snapshot e399c3dcaab28da0

Freddie Mac Single-Family Seller/Servicer Guide 4606.4 — Appraisal requirements — PENDING VERSION, takes effect 2027-01-25

Not yet in force. This is the pending version of the section, which takes effect 2027-01-25. The other version on this page governs until then.

Effective 2027-01-25 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ Initial appraisal report ■ Changes to original plans and specifications ■ Final inspection and completion report (a) Initial appraisal report The Seller must obtain a Traditional Appraisal Report that includes an “as completed” value of the subject property. If there are proposed eligible renovations being financed with the CHOICEReno eXPress® Mortgage, the appraisal report must be completed subject to completion of the proposed eligible renovations. The Seller must provide the appraiser with the cost estimates, plans and specifications for the eligible renovations. (b) Changes to original plans and specifications If, after the appraiser provides the “as completed” value, changes are made to the original plans and specifications in accordance with the Seller responsibilities outlined in Section 4606.5(a)(2), the Seller must notify the appraiser of the changes and provide change documentation to the appraiser. The appraiser must provide a new appraisal to reflect the changes and account for the impact on the “as completed” value. (c) Final inspection and UAD Completion Report Upon completion of all proposed eligible renovations, the appraiser must perform a final inspection of the property and complete a UAD Completion Report in accordance with the requirements in Section 5605.9 for verifying completion. The UAD Completion Report must document that all eligible renovations were completed in accordance with the plans and specifications and must include photographs of the completed eligible renovations.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4606.4 — Appraisal requirements · source URL · snapshot e399c3dcaab28da0