Freddie Mac Single-Family Seller/Servicer Guide Section 5501.6 — Interested party contributions

Freddie Mac Single-Family Seller/Servicer Guide Section 5501.6 — Interested party contributions

5501.6: Interested party contributions (09/03/25) This section contains information related to: ■ Interested party contributions: definitions, requirements, exceptions and documentation ■ Financing concessions: definition, acceptable uses and maximum limits ■ Sales concessions: definition and impact on loan-to-value (LTV) calculation ■ Ineligible Mortgages (a) Interested party contributions: definitions, requirements, exceptions and documentation Freddie Mac will purchase Mortgages that include interested party contributions under the terms of the Purchase Documents and this section. (i) Interested party definition Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-39 An interested party is any person or entity that: ■ May benefit from the property selling at the highest possible price, and ■ Can influence the sales price or other terms of the real estate transaction The following are always considered interested parties: ■ Builder ■ Developer ■ Seller of the property ■ Real estate agent ■ Real estate agent’s broker and agency ■ Any contributing party (e.g., Seller, originating lender, employer, municipality, nonprofit organization or Related Person) affiliated with any of the above individuals or entities. For purposes of this section, an affiliation exists when the two parties are owned or controlled by a common third party or when one of the parties has ownership or control over the other. (ii) Interested party contributions requirements Interested party contributions are any contributions that are made: ■ By an interested party, as defined above, ■ In connection with the Mortgage or the real estate transaction, ■ To or on behalf of the Borrower, and ■ Directly or indirectly through a third party, including a donation to a nonprofit entity Freddie Mac will purchase Mortgages with interested party contributions that are: ■ Financing concessions meeting the requirements in Section 5501.6(b) below, or ■ Sales concessions meeting the requirements in Section 5501.6(c) below (iii)Exceptions to interested party contribution requirements Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-40 The following types of contributions are not subject to the interested party contributions requirements: ■ Lender credit: A lender credit provided by an originating lender affiliated with an interested party to the transaction, provided the lender credit is derived from an increase in the interest rate (i.e., premium pricing) ■ Gifts from a Related Person: Gift funds or gift of equity from a Related Person who is also the seller of the subject property, provided that: • The donor is not the builder or another interested party and has no affiliation with any other interested party to the transaction, and • All of the requirements for gift funds or gift of equity from a Related Person as stated in Section 5501.4(a) are met ■ Real estate tax credits: Prorated real estate tax credits contributed by the property seller in areas where real estate taxes are paid in arrears ■ Builder forward commitment costs: The costs associated with a forward commitment obtained by a builder from a lender in order to offer future buyers a specific Mortgage interest rate, provided the forward commitment was obtained prior to entering into a contract with the Borrower and it was not obtained specifically for the subject transaction. Note: The Seller must deliver ULDD Data Point Investor Feature Identifier valid value “J70” for each Mortgage with rates provided based on builder forward commitments as required by Section 6302.53. (iv) Documentation of interested party contributions The amount and the source of all interested party contributions must be documented in the Mortgage file and be clearly shown on the Settlement/Closing Disclosure Statement. (b) Financing concessions: definition, acceptable uses and maximum limits (i) Definition and acceptable uses of financing concessions Financing concessions are interested party contributions that may only be used to pay: ■ The Borrower’s Closing Costs, and/or ■ Up to 12 months of homeowners association (HOA) dues, provided that the Settlement/Closing Disclosure Statement shows that: • The funds for the payment of the HOA dues were collected at closing, and Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-41 • The funds were disbursed directly to the HOA Contributions exceeding the amount of the Borrower’s actual Closing Costs and up to 12 months’ HOA dues (if applicable), as stated above, must meet the requirements for sales concessions in Section 5501.6(c) below, except that the payment of more than 12 months’ HOA dues is considered an abatement as described below in 5501.6(d). (ii) Maximum financing concessions limits The maximum permitted financing concessions, calculated as a percentage of value as defined in Section 4203.1(a), are as follows: Maximum financing concession limits Occupancy LTV/total LTV (TLTV) ratios >90% LTV/TLTV ratios > 75% and ≤ 90% LTV/TLTV ratios ≤ 75% Primary Residences and second homes 3% 6% 9% Investment Properties 2% 2% 2% Exceptions: The maximum financing concession limits above do not apply to: ■ Financing concessions contributed by Freddie Mac as the property seller for Mortgages originated for the purchase of Freddie Mac REO properties ■ Borrower fees or costs customarily paid by the property seller according to local convention The amount of any financing concessions exceeding the limits stated above must meet the requirements for sales concessions in Section 5501.6(c) below. (c) Sales concessions: definition and impact on LTV calculation (i) Sales concessions definition Sales concessions are interested party contributions, that: ■ Exceed the maximum financing concessions percentage limitations in Section 5501.6(b)(ii) above, and/or Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-42 ■ Do not meet the acceptable uses of financing concession in 5501.6(b)(i) above, and include: ❑ Cash or cash-like contributions (e.g., a gift card), decorator allowances, vacations, furniture, automobiles, securities or other giveaways ❑ Rebates (e.g., rebates from real estate agents) that are not financing concessions ❑ Reimbursement to the Borrower for payment of fees charged to process or negotiate a short sale (commonly referred to as short sale processing fees, short sale negotiation fees, buyer discount fees or short sale buyer fees) (ii) Impact of sales concessions on LTV calculation For Loan Product Advisor® Mortgages, Loan Product Advisor will determine the LTV ratio based on the purchase price or appraised value of the Mortgaged Premises and the dollar amount or value of sales concessions entered into Loan Product Advisor. For Manually Underwritten Mortgages, when calculating the LTV ratio: ■ For purposes of determining the value of the Mortgaged Premises pursuant to Section 4203.1(a), the dollar amount or value of any sales concessions must be deducted from the purchase price ■ Use the lower of the reduced purchase price (after the reduction for all sales concessions has been made) or the appraised value of the Mortgaged Premises (d) Ineligible Mortgages Ineligible Mortgages include: ■ Mortgages with interested party contributions paid outside of closing and not disclosed on the Settlement/Closing Disclosure Statement ■ Mortgages with abatements (that are funds provided to a lender or third party by an interested party to pay or reimburse in whole or in part a certain number of monthly payments of principal, interest, taxes, insurance and/or other assessments on the Borrower’s behalf in excess of Prepaid/Escrows associated with the Mortgage closing) including payment of more than 12 months of HOA dues.

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