Freddie Mac Single-Family Seller/Servicer Guide 5705.10 — Cooperative Project conversions
Freddie Mac Single-Family Seller/Servicer Guide Section 5705.10 — Cooperative Project conversions.
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 5705.10 — Cooperative Project conversions — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
Freddie Mac Single-Family Seller/Servicer Guide 5705.10 — Cooperative Project conversions
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. 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.
Operationalizing Freddie Mac Single-Family Seller/Servicer Guide 5705.10 — Cooperative Project conversions
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Source of record: https://claudeforcompliance.com/regs/fhlmc-5705-10/
· register fhlmc-5705-10 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.