Freddie Mac Single-Family Seller/Servicer Guide 4606.5 — Transfers of Servicing

Freddie Mac Single-Family Seller/Servicer Guide 4606.5 — Transfers of Servicing

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

For GreenCHOICE Mortgages® where eligible improvements will be completed after the Note Date, a Transfer of Servicing is prohibited until all eligible improvements are complete and the appraiser has provided a completion report. See Chapter 7101 for requirements regarding Transfers of Servicing.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4606.5 — Transfers of Servicing · source URL · snapshot e399c3dcaab28da0

Freddie Mac Single-Family Seller/Servicer Guide 4606.5 — Seller responsibilities for renovation work and process — 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: ■ Responsibilities during the renovation period ■ Other Seller responsibilities ■ Notification of completion of the subject property ■ Seller responsibilities for third parties (a) Responsibilities during the renovation period During the renovation period: 1. The Seller must manage any changes to the plans and specifications requested by the Borrower during the course of eligible renovations. If any changes are made to the plans and specifications and/or the estimated time of completion for the eligible renovations, the changes must be agreed upon via a change order signed by the Borrower and the contractor and approved by the Seller. Documentation evidencing the change order must be signed by the Borrower and the contractor and must include the following, as applicable: ■ Detailed description of the changes ■ Updated itemized renovation costs ■ Updated total cost of the eligible renovations ■ Any changes to the estimated Completion Date 2. The Seller may not approve changes to the plans and specifications if such changes impact the loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio or the property such that the Mortgage: ■ Would not have been eligible for sale under the terms of the Seller’s Purchase Documents in effect on the Settlement Date, or ■ Would have been eligible for sale but under different terms (b) Other Seller responsibilities The Seller is responsible for compliance with the following requirements: 1. The Mortgage file must contain all relevant documentation, including copies of: ■ Costs of the eligible renovations ■ Purchase contracts ■ Bids ■ Appraisal(s) ■ Renovation contract(s) ■ Plans and specifications ■ Permits and applicable homeowners association approvals ■ Documents related to change orders and draws ■ Completion report ■ Title updates 2. The Seller must notify Freddie Mac through Loan Status Hub® if there are any concerns that the eligible renovations will not be completed by the Completion Date or if there are any changes that impact the “as completed” value of the property as determined by the appraiser. If a Completion Date extension is necessary, the Seller must follow the requirements in Section 4606.1(g)(iii) to request an extension. 3. Unless otherwise noted below, all contractor(s) and/or tradespersons chosen by the Borrower to complete the eligible renovations must: ■ Have entered into an executed, binding renovation contract with the Borrower to complete the eligible renovations no later than the Completion Date. The contract must include an indemnification provision requiring the contractor to indemnify the Borrower for any property loss or damage caused by the contractor, its employees or its subcontractors. ■ Be licensed and insured as required by local and/or State requirements, and ■ Be financially able to perform the duties necessary to complete the renovation work in a timely manner The above requirements do not apply if the Borrower, acting as general contractor, performs all the work in accordance with Section 4606.6(a) or if eligible renovations are purchased from a home improvement store in accordance with Section 4606.6(c). 4. The Seller must obtain title updates as necessary to ensure that the CHOICEReno eXPress® Mortgage meets all title insurance requirements in Chapter 4702 5. After all eligible renovations are completed, the CHOICEReno eXPress Mortgage must remain a valid First Lien in accordance with Section 4201.2 (c) Notification of completion of the subject property For CHOICEReno eXPress Mortgages, when the eligible renovations are complete, the Seller must notify Freddie Mac through Loan Status Hub and provide the completion report including photographs of the completed eligible renovations. Until the Seller receives written acknowledgment from Freddie Mac through Loan Status Hub that all eligible renovations have been completed to satisfy the “as completed” appraised value of the original appraisal, the Seller remains responsible for the requirements of Section 4606.5. The Seller represents and warrants that, as of the date the Seller notifies Freddie Mac that all eligible renovations are complete, all requirements in this Chapter 4606 have been met. If notice that all eligible renovations are complete is not received by Freddie Mac by the Completion Date, the Mortgage will be subject to a repurchase. (d) Seller responsibilities for third parties A third party may perform all or some of the processing, management and performance of draw inspections and/or maintenance and management of disbursements from the completion escrow account and other requirements described above as responsibilities or obligations of the Seller. Although these functions may not be performed directly by the Seller, the Seller is responsible for the accuracy and integrity of the information provided by the third party and for compliance with these and all requirements in the Seller’s Purchase Documents.

Source: Freddie Mac Single-Family Seller/Servicer Guide 4606.5 — Seller responsibilities for renovation work and process · source URL · snapshot e399c3dcaab28da0