Freddie Mac Single-Family Seller/Servicer Guide Section 5705.9 — Combined Cooperative Units

Freddie Mac Single-Family Seller/Servicer Guide Section 5705.9 — Combined Cooperative Units

5705.9: Combined Cooperative Units (03/05/25) This section contains requirements related to: ■ Minimum number of units after Cooperative Units are combined ■ Requirements to combine Cooperative Units ■ Loan purpose for combined Cooperative Units ■ Appraisal requirements for combined Cooperative Units ■ Closing requirements for combined Cooperative Units Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-38 ■ Servicing/foreclosure requirements for combined Cooperative Units Cooperative Units that have been physically and legally combined to create a single Cooperative Unit must meet the following requirements. (a) Minimum number of units after Cooperative Units are combined The Cooperative Project must be composed of at least two Cooperative Units after the combination of any units. (b) Requirements to combine Cooperative Units Prior to sale of the Cooperative Share Loan to Freddie Mac, the following must occur: 1. The Cooperative Corporation must approve the combination of two or more adjoining Cooperative Units into a single Cooperative Unit 2. The construction to combine the Cooperative Units into a single Cooperative Unit must be complete 3. The Cooperative Corporation must: ■ Assign a single unit designation (i.e., a mailing address) to the combined single Cooperative Unit ■ Designate the number of Cooperative Shares applicable to the combined single Cooperative Unit ■ Adjust the Maintenance Fees based on the total number of Cooperative Shares assigned to the combined single Cooperative Unit (c) Loan purpose for combined Cooperative Units The Cooperative Share Loan may be either: ■ A purchase transaction for the two or more adjoining Cooperative Units on the Note Date; or ■ A refinance transaction, if a Shareholder owns one Cooperative Unit and is purchasing one or more additional adjoining Cooperative Units. The proceeds from the refinance Cooperative Share Loan may only be used to: ❑ Purchase the additional adjoining units Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-39 ❑ Pay off the current Cooperative Share Loan on the Cooperative Unit in which the Shareholder has a Cooperative Interest ❑ Pay the costs of construction to combine the Cooperative Units into a single unit ❑ Pay any related Closing Costs, financing costs and Prepaid/Escrows up to 2.5% of the UPB of the refinance loan amount; and ❑ Disburse cash to the Shareholder up to 1% of the UPB of the refinance Cooperative Share Loan or $2,000 whichever is less, provided that the cash disbursed does not exceed 5% of the amount of the Cooperative Share Loan (d) Appraisal requirements for combined Cooperative Units The Cooperative Units must be appraised as a combined single unit. (e) Closing requirements for combined Cooperative Units In connection with the closing of the Cooperative Share Loan secured by the combined single Cooperative Unit, the following requirements must be met: ■ All loan documents must use the single unit designation assigned by the Cooperative Corporation ■ The Cooperative Share Loan must be secured by a first lien on the Cooperative Interest (i.e., rights of ownership and occupancy rights) to the Cooperative Units that were combined into the single unit (f) Servicing/foreclosure requirements for combined Cooperative Units The Cooperative Share Loan must be serviced as a 1-unit dwelling. In the event of a foreclosure, the Cooperative Share Loan secured by a pledge or trust of the Cooperative Shares must be foreclosed as a combined single 1-unit dwelling. Freddie Mac Single-Family Seller/Servicer Guide Chapter 5705 As of 01/26/26 Page 5705-40

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