Freddie Mac Single-Family Seller/Servicer Guide Section 5203.2 — Credit Scores

Freddie Mac Single-Family Seller/Servicer Guide Section 5203.2 — Credit Scores

5203.2: Credit Scores (04/22/26) This section contains information related to: ■ Glossary terms used in this section ■ Minimum number of Credit Scores ■ Required Credit Score versions ■ Credit Score requirements ■ Assessment of Credit Fees for Mortgages with certain Indicator Scores (a) Glossary terms used in this section The Seller should be familiar with the Glossary definitions of the following terms: Glossary terms C Credit Score A number summarizing an individual’s credit profile that indicates the likelihood that a Borrower will repay future obligations. I Indicator Score The one Underwriting Score identified to represent the eligibility of the Mortgage for the product offering. The related ULDD Data Point names are Loan Level Credit Score Selection Method Type and Loan Level Credit Score Value. U Underwriting Score The one Credit Score selected from all usable Credit Scores obtained for an individual Borrower that quantifies the credit reputation risk for that individual Borrower. The related ULDD Data Point name is Credit Score Value. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5203 As of 04/22/26 Page 5203-13 (b) Minimum number of Credit Scores The Seller must request Credit Scores and accompanying reason codes for each Borrower from at least two of the consumer reporting agencies (CRAs). Credit Scores can be obtained by requesting a credit reporting company (CRC) to provide them as part of the credit report. It is unusual for a Borrower who reports credit obligations on the application not to have a Credit Score. If no Credit Score is received for such a Borrower, the Seller must re-check the information provided when ordering the Credit Scores and resubmit a request if an error is identified. (c) Required Credit Score versions Freddie Mac is transitioning toward a modernized and more competitive Credit Score framework for Mortgage underwriting. In support of this transition, the U.S. Federal Housing (FHFA) has approved the use of Classic FICO®, VantageScore® 4.0 and FICO Score 10T models. Each of the three major U.S. CRAs uses a different name to refer to Classic FICO scores; however, all FICO scores are based on the same underlying FICO scoring model developed by Fair Isaac Corporation. The following Credit Score versions generated by each CRA are used to determine the Underwriting Score and Indicator Score for Mortgages delivered to Freddie Mac: ■ Equifax® FICO Classic v5 ■ Experian®/Fair Isaac Risk Model v2 ■ TransUnion® FICO Risk Score 04 The following versions of VantageScore 4.0 are also eligible for use by approved Sellers: VantageScore 4.0 versions ■ Equifax VantageScore 4.0 ■ Experian VantageScore 4.0 ■ TransUnion VantageScore 4.0 Sellers that wish to participate in the delivery of Mortgages assessed using VantageScore 4.0 should contact their Freddie Mac representative or Customer Service at 800-FREDDIE for information regarding program availability, eligibility requirements and applicable delivery instructions. FICO 10T versions Freddie Mac Single-Family Seller/Servicer Guide Chapter 5203 As of 04/22/26 Page 5203-14 ■ FICO Score 10T (Equifax, Experian, TransUnion) Mortgages delivered with FICO Score 10T are currently not eligible; however, as further progress is made on the updated credit score framework, Freddie Mac plans to purchase Mortgages delivered using FICO Score 10T. (d) Credit Score requirements (i) Credit Score requirements for Loan Product Advisor Mortgages A minimum Indicator Score is not required for Accept Mortgages because Loan Product Advisor has made the determination that the Borrower’s credit reputation and the Mortgage product are acceptable. Credit Scores, including Indicator Scores, are obtained by Loan Product Advisor, provided with the merged credit report(s) and reflected on the Feedback Certificate. Freddie Mac will use the Indicator Score reflected on the Last Feedback Certificate. For Mortgages sold through Cash-Released XChange®, the Seller must deliver the Indicator Score from the Last Feedback Certificate as ULDD Data Point Loan Level Credit Score Value. (ii) Credit Score requirements for Manually Underwritten Mortgages and Non-Loan Product Advisor Mortgages Manually Underwritten Mortgages must comply with the requirements in Section 5202.1 for: ■ Determining if the Credit Scores are usable or not usable ■ Identifying the Underwriting Score for each Borrower ■ Identifying the Indicator Score for the Mortgage ■ Documenting and delivering Underwriting Scores and Indicator Scores (e) Assessment of Credit Fees for Mortgages with certain Indicator Scores The Seller must refer to Exhibit 19, Credit Fees, for information related to Credit Scores. Credit Fees are paid in accordance with the Credit Fee provisions in Chapter 6303. The Base Grid Credit Fees in Price, by Loan Purpose Type, in Exhibit 19 assume the middle/lower then lowest method was used to identify the Indicator Score. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5203 As of 04/22/26 Page 5203-15 The Alt FICO Credit Fee in Price in Exhibit 19 will be assessed when all the following conditions are met: ■ The Base Grid Credit Fee in Price, by Loan Purpose Type, is applicable; ■ The credit fee rate is greater than 0%; and ■ A method other than the middle/lower then lowest method was used to identify the Indicator Score Unless the Mortgage is sold through Cash-Released XChange, for Base Grid Credit Fees in Price, by Loan Purpose Type, in Exhibit 19, applicable to Loan Product Advisor Mortgages, the applicable Credit Fee in Price will be assessed using the loan-to-value (LTV) ratio calculated by Freddie Mac using data delivered by the Seller and the Indicator Score on the Last Feedback Certificate. For Mortgages sold through Cash-Released XChange, the Mortgage will be assessed a Base Grid Credit Fee in Price, by Loan Purpose Type, in Exhibit 19, based on ULDD Data Point Loan Level Credit Score Value. If the Seller does not deliver an Indicator Score or, in lieu of an Indicator Score, the Key Number, the Mortgage may be assessed the < 640 Base Grid Credit Fee in Price, by Loan Purpose Type, in Exhibit 19. For Mortgages delivered with no usable Credit Score due to insufficient information or inaccurate information in accordance with Section 5202.1(f), Freddie Mac will not assess the Base Grid Credit Fee in Price, by Loan Purpose Type, in Exhibit 19. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-1 Chapter 5301: General Requirements for All Stable Monthly Income and Asset Qualification Sources 5301.1: General requirements for all stable monthly income (03/04/26) This section contains information and guidance related to: ■ Overview of stable monthly income ■ General requirements for all stable monthly income ■ Income stability and history requirements ■ Income continuance requirements ■ Alimony payments (a) Overview of stable monthly income Topic 5300 provides requirements and guidance for the determination of stable monthly income. The Seller must determine when additional analysis and documentation is needed to support the determination of stable and consistent monthly income. (b) General requirements for all stable monthly income Stable monthly income: Stable monthly income is the Borrower’s verified gross monthly income from all acceptable and verifiable sources that can reasonably be expected to continue for at least the next three years. For each income source used to qualify the Borrower, the Seller must determine that both the source and the amount of the income are stable, with a consistent level of earnings. The income used to qualify the Borrower (whether or not specifically addressed as an income source or type in Topic 5300) and the documentation in the Mortgage file must be evaluated for stable monthly income qualification requirements and must meet the requirements of Topic 5300. Income that does not meet these requirements or is not calculated correctly may invalidate the Loan Product Advisor® Risk Class on the Feedback Certificate. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-2 Cryptocurrency: Income that is paid to the Borrower in cryptocurrency may not be used for qualification. Mortgage file documentation: All documentation used to establish stable monthly income must be retained in the Mortgage file. (c) Income stability and history requirements The Seller must consider the length of history of the income and whether the earnings have been consistent. When evaluating stability of income based upon historical receipt, additional layering of risk may be present depending upon the degree of income fluctuation. As a result, the Seller must determine when additional documentation (e.g., an additional year of earnings history) is necessary to support income stability. In most instances, a two-year history of receiving a consistent level of income is required for the income to be considered stable and used for qualifying. While the source of income may vary, the Borrower must have a consistent level of income despite changes in the sources of income. (d) Income continuance requirements For all income used to qualify the Borrower, the Seller must determine whether the income is reasonably expected to continue. This determination must focus on the Borrower’s past employment/self-employment history, history of receipt of other income and the probability of continued consistent receipt of the income used to qualify the Borrower. At a minimum, the Seller must base the determination on the requirements of Topic 5300 and any other documentation contained in the Mortgage file. Additional documentation may be required, as described in Section 5302.1. The Seller must not consider income for qualifying the Borrower if the Seller has knowledge, information or documentation that contradicts a reasonable expectation of continuance or probability of consistent receipt over at least the next three years. Income continuance categories and tables Continuance of income is categorized as follows: ■ Income and earnings types typically without documentable continuance (likely to continue) (Table A) ■ Income types with documentable continuance (Table B) ■ Income types that may or may not have documentable continuance, depending upon the source (e.g., government program, private insurer) and terms of the specific income type (e.g., retirement, long-term disability) (Table C) Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-3 (i) Income and earnings types typically without documentable continuance (likely to continue) Table A: Income and earnings types typically without documentable continuance Earnings types and income types Continuance requirements Employed income ■ Base employment earnings ■ Military earnings (base, entitlements, Reserve, National Guard) ■ Bonus, commission, overtime and tip earnings ■ Restricted stock (RS) and restricted stock units (RSU) subject to performance-based vesting provisions ■ Recurring RS and RSU awards subject to time- based vesting provisions ■ Automobile allowance ■ Unemployment (associated with seasonal employment) Income must be likely to continue for at least the next three years. The Seller is not required to obtain documentation to verify income continuance, absent any knowledge, information or documentation that the income is no longer being received or is likely to cease. When the Seller has knowledge or information that the income may not be reasonably expected to continue, the Seller must conduct additional evaluation and/or obtain documentation in order to determine if the income can be used. Example (Seller knowledge): If a Borrower has been receiving overtime or bonuses, but the Seller has information or documentation evidencing that the income is already discontinued or will be discontinued due to the completion of a project or termination of a bonus program, the “likely to continue” requirement would not be met, and the income cannot be used for qualification purposes. Rental income Self-employment income Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-4 Table A: Income and earnings types typically without documentable continuance Other income ■ Foster-care income ■ Housing or parsonage allowance ■ Mortgage Credit Certificate ■ Royalty payments (two- year history) ■ Tax-exempt income (ii) Income types with documentable continuance For income types with documentable continuance, the documentation requirements for each individual income type listed within Topic 5300 provide the minimum documentation required in order for the Seller to verify income continuance for at least three years. Table B: Income types with documentable continuance Income types Continuance requirement highlights1 Mortgage differential Document duration of payments (Refer to Sections 5303.1 and 5305.1) Notes receivable Royalty payments (one-year history) Nonrecurring RS and RSU awards subject to time-based vesting provisions Trust income (fixed payment) Alimony, child support and/or separate maintenance Document duration of obligation (Refer to Section 5305.1) Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-5 Table B: Income types with documentable continuance Homeownership Voucher Program (HOV) Document duration of HOV term limit for assistance (Refer to Section 5305.1) Capital gains Document sufficient assets (Refer to Section 5305.1) Dividend and interest Retirement account distributions as income Trust income (fluctuating payments) 1 Highlights of the requirements from the individual income types are provided for illustrative purposes only. Refer to the sections shown above for complete requirements. (iii) Income types that may or may not have documentable continuance Table C: Income types that may or may not have documentable continuance Certain income types are associated with multiple income sources, each of which may have specific requirements with respect to continuance, whether defined or undefined. For this reason, this grouping of income types may or may not have documentable continuance. Example: ■ If the source of retirement income is Social Security retirement benefits, no additional documentation of continuance is required ■ If the source is a retirement annuity from an insurance company, there will generally be a defined term in which case continuance must be documented Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-6 Table C: Income types that may or may not have documentable continuance Income types Continuance requirement highlights1 Retirement income (e.g., social security, defined benefit pension, annuity, other similar benefits) Sellers must be knowledgeable about the source of the specific income type in order to determine whether or not documentable continuance is applicable. This includes, but is not limited to, knowledge of factors with respect to whether the payments are received pursuant to a written agreement, government program, law and/or regulation, as well as the applicable eligibility criteria governing the continued receipt of the income. Refer to Section 5305.1 for requirements for these income types. For long-term disability and SSI income types: Pending or current re-evaluation of medical eligibility for insurance and/or benefit payments is not considered an indication that the insurance and/or benefit payment will not continue. Survivor and dependent benefits (e.g., Social Security Survivor Benefits, Survivors’ VA benefits, other similar benefits) Long-term disability income (e.g., Social Security disability benefits, VA disability compensation, worker’s compensation, private disability insurance) Social Security Supplemental Security Income (SSI) Public assistance income (e.g., Temporary Assistance for Needy Families) 1 Highlights of the requirements from the individual income types are provided for illustrative purposes only. Refer to the sections shown above for complete requirements. (e) Alimony payments The amount of the monthly alimony payment must be deducted from the stable monthly income if both of the following apply: 1. The Borrower is obligated to pay alimony 2. There are more than 10 months of payments remaining Note: See Section 5401.2(b)(3) for additional information. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5301 As of 03/04/26 Page 5301-7 5301.2: General requirements for all stable monthly asset qualification sources (03/04/26) Asset qualification sources that meet the requirements of Topic 5300, including Chapter 5307, may also be used to qualify the Borrower for the Mortgage. For each asset qualification source, the Seller must determine that both the source of the asset and the amount of the asset source used to qualify the Borrower are reasonable and stable. The asset qualification sources used to qualify the Borrower and the documentation in the Mortgage file must be evaluated for stable monthly asset qualification requirements. Asset qualification sources that do not meet these requirements or are not calculated correctly may invalidate the Loan Product Advisor® Risk Class on the Feedback Certificate. Mortgage file documentation: All documentation used to establish stable monthly asset qualification must be retained in the Mortgage file.

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