Freddie Mac Single-Family Seller/Servicer Guide Section 5705.10 — Cooperative Project conversions

Freddie Mac Single-Family Seller/Servicer Guide Section 5705.10 — Cooperative Project conversions

5705.10: Cooperative Project conversions (03/05/25) This section contains requirements related to: ■ Cooperative Project conversions with prior use ■ Cooperative Project conversion documents ■ Prior Cooperative Project financing For a Cooperative Project that was created by the conversion of a building(s) with a prior use, the following requirements must be met for Seller’s review and determination of Cooperative Project eligibility in addition to all other applicable requirements for Cooperative Projects in the Guide. (a) Cooperative Project conversions with prior use (i) Non-Gut Rehabilitation conversion Conversions involving a Non-Gut Rehabilitation of a Cooperative Project that was legally created within three years of underwriting the Cooperative Project must meet all of the following: 1. An engineer’s report must confirm that the Cooperative Project is structurally sound 2. The condition and remaining useful life of the major Cooperative Project components (i.e., the roof, elevators and mechanical systems, such as central heating, ventilation and air conditioning (HVAC); plumbing and electricity) are sufficient to meet the residential needs of the Cooperative Project 3. All rehabilitation work involved in the conversion was completed in a professional manner; and 4. There is no evidence of any adverse conditions (ii) Gut Rehabilitation and Non-Gut Rehabilitation conversions over three years old A review of the engineer’s report is not required for conversions involving a Gut Rehabilitation or Non-Gut Rehabilitation if more than three years have elapsed since the legal creation of the Cooperative Project. (b) Cooperative Project conversion documents For a Cooperative Project that was created by the conversion of a building(s) with a prior use within three years of underwriting the Cooperative Project, the Seller’s project review and determination of project eligibility must include a review of all the Cooperative Project Documents. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-41 For an existing Cooperative Project and Cooperative Project conversions if more than three years have elapsed since the legal creation of the Cooperative Project, a review of all the Cooperative Project Documents is not required. (c) Prior Cooperative Project financing In a conversion, the mortgagee of the Blanket Mortgage agrees to the use of the building as a Cooperative Project, and, in the event of a default on the Blanket Mortgage, it will not wipe out the Cooperative Shares of the Shareholders who are current in the payment of Maintenance Fees or assessments. 5705.11: Documents to be delivered to the Document Custodian and other documents to be maintained by Seller (03/05/25) This section contains requirements related to: ■ Mortgage file documentation ■ Other file documents ■ Retention of Cooperative Project documentation ■ Document Custodian documentation (a) Mortgage file documentation A copy of the Recognition Agreement and a copy of the Proprietary Lease must be maintained in the Mortgage file. (b) Other file documents Seller must maintain the following documentation on the Cooperative Corporation and the Cooperative Project: 1. Most recent two year’s financial statements including income and expense statement and all footnotes 2. Current fiscal year’s operating budget 3. One of the following forms of evidence that the Cooperative Project meets insurance requirements: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-42 i. Original policy (including a commercial package policy under which the required coverages may be provided in whole or in part) and applicable endorsements ii. Copy of the original policy and applicable endorsements, if the copy meets the Mortgage file retention requirements of Chapter 3302; or iii. Certificate, evidence or declarations of insurance, which must include the following information: ■ Name of insured Cooperative Corporation (as “First Named Insured”) ■ Name and address of Cooperative Project mortgagee(s) ■ Address of insured Cooperative Project ■ Type, limit and effective dates of coverage ■ Deductible amount and applicable coverage for each deductible ■ Any endorsement or optional coverage obtained and made part of the original policy ■ Insurer’s agreement to provide at least 10 days’ notice to the Cooperative Corporation, the Cooperative Project mortgagee and the Cooperative Unit mortgagee before any reduction in coverage or cancelation of the policy; and ■ Signature of an authorized representative of the insurer The Servicer must maintain a specimen of each policy and endorsement for which a certificate, evidence or declarations of insurance is maintained in lieu of the policy and endorsements. (c) Retention of Cooperative Project documentation The Seller/Servicer must retain all Cooperative Project documentation that supports its warranty that the Cooperative Project meets Freddie Mac requirements for: ■ As long as Freddie Mac retains an interest in the applicable Cooperative Share Loan, and ■ At least seven years from the date Freddie Mac’s interest in the Cooperative Share Loan is satisfied (d) Document Custodian documentation See Section 6304.2(b) for documents that Seller/Servicers must submit to the Document Custodian. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-43 5705.12: Pooling and delivery requirements for Cooperative Share Loans (03/05/25) See Section 6202.3(e)(vii) for information on pooling and delivery requirements for fixed-rate Cooperative Share Loans under the fixed-rate Guarantor and MultiLender Swap programs. See Section 6302.45 for special delivery requirements for Cooperative Share Loans. Note: There are no special pooling or delivery requirements for adjustable-rate Cooperative Share Loans. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5706 As of 04/01/26 Page 5706-1 Chapter 5706: Manufactured Homes on Leasehold Estates 5706.1: Purchase of Mortgages secured by Manufactured Homes on leasehold estates (06/04/25) Freddie Mac will purchase a Mortgage secured by a Manufactured Home on a leasehold estate when there is demonstrated market acceptance. Mortgages that are secured by a Manufactured Home on a leasehold estate must meet the requirements of this Chapter 5706. The Seller must obtain Freddie Mac’s written approval before selling Mortgages secured by a Manufactured Home on a leasehold estate to Freddie Mac by contacting its Freddie Mac representative or Customer Service at 800-FREDDIE. Mortgages secured by Manufactured Homes on leasehold estates must satisfy the provisions of Chapter 5703 and related Guide sections pertaining to Manufactured Homes and Chapter 5704 and related Guide sections pertaining to leasehold estates. 5706.2: Property eligibility for Mortgages secured by Manufactured Homes on leasehold estates (06/04/25) To be eligible for purchase by Freddie Mac, a Manufactured Home on a leasehold estate must be: ■ A one-unit dwelling comprised of multiple sections (a “multiwide Manufactured Home”) ■ Located on a leasehold estate meeting the requirements of Chapter 5704; and ■ Located in a ground lease community ❑ For ground lease communities that are Condominium Projects, the Seller must comply with the Condominium Project requirements and warranties in Chapter 5701 ❑ For ground lease communities that are Planned Unit Developments (PUDs), the Seller must comply with the PUD requirements and warranties in Chapter 5702 A Manufactured Home on a leasehold estate must not include an ADU. Note: See Chapter 4504 for requirements for HeritageOne® Mortgages, including the special requirements for HeritageOne Mortgages that are leasehold Mortgages secured by Manufactured Homes in Section 4504.8. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5706 As of 04/01/26 Page 5706-2 5706.3: Eligible transaction types for Mortgages secured by Manufactured Homes on leasehold estates (04/01/26) This section contains requirements related to: ■ Purchase transactions ■ “No cash-out” refinance transactions A Mortgage secured by a Manufactured Home located on a leasehold estate may be a purchase transaction or a “no cash-out” refinance transaction. For a new Manufactured Home, whether it is affixed to a permanent foundation prior to or after the Application Received Date, the Seller must obtain a copy of the manufacturer’s invoice and Manufactured Home Purchase Agreement. (a) Purchase transactions A purchase transaction is one in which the Mortgage proceeds are used to finance the purchase of the Manufactured Home. The proceeds may also be used to purchase the leasehold interest in the land, as the Borrower does not separately own the land. For Manufactured Homes, the following requirements apply: ■ The purchase price may include documented costs for delivery and setup, installation and permanent utility connections, including well and/or septic systems ■ Credits for wheels and axles and any Manufactured Home retailer rebates must be deducted from the purchase price along with any sales concessions in accordance with Section 5501.6(c) ■ Financing of any forms of insurance, except for mortgage insurance, or other costs is not allowed for purchase transactions The maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios (if applicable) for a purchase transaction Mortgage secured by a newly built Manufactured Home (not previously owned) and/or not affixed to a permanent foundation as of the Application Received Date are based on value calculated as the lower of: ■ The purchase price of the Manufactured Home and leasehold interest in the land, or ■ The current appraised value of the Manufactured Home and leasehold interest in the land Freddie Mac Single-Family Seller/Servicer Guide Chapter 5706 As of 04/01/26 Page 5706-3 The LTV ratio (and TLTV/HTLTV ratio, if applicable) for a purchase transaction Mortgage secured by a previously owned Manufactured Home that is affixed to a permanent foundation prior to the Application Received Date is based on value calculated as the lower of: ■ The purchase price of the Manufactured Home and leasehold interest in the land, or ■ The current appraised value of the Manufactured Home and leasehold interest in the land (b) “No cash-out” refinance transactions A “no cash-out” refinance transaction involves the payoff of an existing Mortgage secured by the Manufactured Home and leasehold interest in the land. Proceeds from a “no cash-out” refinance Mortgage may be used only to: ■ Pay off the principal and interest due, including a balance deferred under a loss mitigation plan, for the existing first Mortgage secured by the Manufactured Home and leasehold interest in the land ■ Pay off any costs or fees associated with the satisfaction and release of the first Mortgage (e.g., late fees, prepayment penalties, etc.) ■ Pay off or pay down any junior lien(s) obtained by the Borrower solely to acquire the Manufactured Home. Any remaining balance must be subordinated to the refinance Mortgage. ■ Pay related Closing Costs ■ Disburse cash out to the Borrower (or any other payee) up to the greater of 1% of the new refinance Mortgage or $2,000 A “no cash-out” refinance Mortgage must also meet the requirements in Section 4301.4(a). 5706.4: Lease provisions and value of leasehold estates (06/04/25) This section contains requirements related to: ■ Lease provisions ■ Value of leasehold estates Freddie Mac Single-Family Seller/Servicer Guide Chapter 5706 As of 04/01/26 Page 5706-4 (a) Lease provisions In addition to the requirements in Section 5704.1(c), the lease must also provide that subleasing is allowed if the leasehold mortgagee or its designee takes title to the Manufactured Home and the leasehold estate. (b) Value of leasehold estates The provisions of Section 5703.8(b) pertaining to calculating the treatment of the land in determining value for computing the loan-to-value ratio in different types of financing transactions structures do not apply to leasehold estates. The provisions of Section 5703.7(b)(i) pertaining to the use of the land as an equity contribution do not apply to the leasehold estate. The provisions of Section 5703.9 pertaining to the appraisal requirements for Manufactured Homes do apply. Although Section 5704.2 pertaining to appraisal requirements for leasehold Mortgages allows for the use of comparable sales that are not on a leasehold estate, at least two comparable properties that are also on a leasehold estate must be included in the appraisal report to demonstrate market acceptance. 5706.5: Underwriting requirements for Mortgages secured by Manufactured Homes on leasehold estates (06/04/25) This section contains requirements related to: ■ Loan Product Advisor® Mortgages ■ Maximum loan-to-value (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios and value (a) Loan Product Advisor Mortgages All Mortgages secured by Manufactured Homes on leasehold estates must be submitted to Loan Product Advisor and be an Accept Mortgage. (b) Maximum LTV/TLTV/HTLTV ratios and value The maximum LTV, TLTV and HTLTV ratios for Mortgages secured by Manufactured Homes on leasehold estates are as follows: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5706 As of 04/01/26 Page 5706-5 Purchase transactions and “no cash-out” refinance transactions Primary Residence Maximum LTV Maximum TLTV Maximum HTLTV 95% 95% 95% 5706.6: Title issues and lien requirements relating to Manufactured Homes on leasehold estates (06/04/25) This section contains requirements related to: ■ State permits surrender of certificate of title ■ Title insurance (a) State permits surrender of certificate of title A Manufactured Home on a leasehold estate must be located in a State that permits surrender of a certificate of title, regardless of whether the land on which the Manufactured Home is located is owned by the owner of the Manufactured Housing. (b) Title insurance In addition to the requirements in Section 5703.4(e), the American Land Title Association (ALTA) Form 13.1 endorsement must be attached to the title insurance policy. The title insurance policy must include the Manufactured Home as part of the lessee’s leasehold improvements and must include the value of the lessee’s leasehold improvements, including the Manufactured Home, in the insured estate. All requirements necessary to obtain title insurance, including ALTA Form 13.1 and Form 7 endorsements, must be satisfied, including any requirements necessary to ensure the leasehold transaction, such as a recordation of the lease or a short form lease that incorporates the various provisions of the unrecorded lease. An attorney opinion of title letter is not acceptable in lieu of a title insurance policy. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5801 As of 11/05/25 Page 5801-1 Chapter 5801: The Uniform Closing Dataset 5801.1: The Uniform Closing Dataset and Loan Closing Advisor® (11/05/25) This section contains information and requirements relating to: ■ The Uniform Closing Dataset’s (UCD) function in electronic data transmission to Freddie Mac ■ The UCD ■ UCD messaging through Loan Closing Advisor® (a) The UCD’s function in electronic data transmission to Freddie Mac The UCD is a common industry dataset that allows information on the Settlement/Closing Disclosure Statement to be communicated electronically. The specific active version of the UCD Specification provides field-specific standardization requirements for preparing the UCD in proper XML format for file transmission to Freddie Mac. Loan Closing Advisor is Freddie Mac’s electronic collection solution for the UCD that helps Sellers validate that their closing data aligns with the UCD. Loan Closing Advisor assesses the data against the specific active version of the UCD Specification, checking for the completeness, validity and accuracy of certain calculated values, as well as consistency of the data. (b) The UCD The following requirements apply to the UCD for Mortgages sold to Freddie Mac: ■ The UCD XML file with the embedded Settlement/Closing Disclosure Statement (PDF) is required on all Mortgages sold to Freddie Mac with a Note Date on or after September 25, 2017 ■ The requirement to submit the UCD through Loan Closing Advisor is satisfied when the transaction has received data quality feedback messages and the final Settlement/Closing Disclosure Statement PDF is embedded in the UCD XML file ■ The specific active version of the UCD Specification may be amended from time to time. The current version can be found at https://sf.freddiemac.com/tools-learning/uniform- mortgage-data-program/ucd. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5801 As of 11/05/25 Page 5801-2 (c) UCD messaging through Loan Closing Advisor When the UCD XML file is submitted to Loan Closing Advisor, the Seller will receive a variety of feedback messages designed to assist the Seller in evaluating the closing data against the UCD delivery specification requirements and determining if the associated Mortgage meets the requirements of the specific active version of the UCD Specification, including those related to the completeness, validity and accuracy of certain calculated values and consistency of the data. The presence of one or more feedback message(s) with a warning severity indicator at the time of delivery does not prevent a submission from satisfying the UCD submission requirement. Freddie Mac Single-Family Seller/Servicer Guide Chapter 6101 As of 12/17/25 Page 6101-1 Chapter 6101: Fixed-Rate Cash

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