Freddie Mac Single-Family Seller/Servicer Guide 8403.1 — Servicing Mortgages on Abandoned

Properties, distressed properties and properties that pose a Risk of Property Ownership (09/10/25) This section contains requirements related to: ■ Servicing Mortgages on distressed properties ■ Properties that pose a Risk of Property Ownership ■ Servicing Mortgages on Abandoned Properties Servicers are responsible for acting without delay, and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of a Mortgaged Premises that becomes a distressed property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when the Servicer becomes aware of a distressed property and fails to act to protect both the Servicer’s and Freddie Mac’s interests as required by this section.

(a) Servicing Mortgages on distressed properties A distressed property is real property subject to a Mortgage that may or may not pose a Risk of Property Ownership (see Section 9202.2(b)) to Freddie Mac and is a property that: ■ Requires substantial repairs ■ Has sustained significant physical deterioration; or ■ Has been condemned by a local authority Even if the owner has abandoned the Mortgaged Premises, a Servicer must report all Mortgages on distressed properties that are 30 or more days delinquent via an EDR transmission within the first three Business Days of the month following the month in which the Servicer identified the problem using default reason code 011 (Property problem) and the applicable occupancy code. If a property is distressed, the Servicer must conduct a search of the records of the local code authority to determine if there is any outstanding health or safety violations filed against either the Borrower or the property. If a Servicer discovers any code violations on a distressed property, the Servicer must report them to Freddie Mac (see Directory 5) within three Business Days of identifying the violation. Servicers must attach a copy of the code violation and copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013, 1-4 Unit Property Inspection Report. In addition to any reporting requirement set forth above for distressed properties, the Servicer must: ■ Maintain a record of when the condition was discovered and take all necessary actions to protect the property from waste, damage and vandalism and prevent any loss ■ Inspect the property monthly until the condition is resolved ■ Ensure that property insurance coverage is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. ■ File a claim with the applicable property insurer on Freddie Mac’s behalf if the property is damaged and the Borrower has not filed a claim ■ Comply with the requirements of the VA, RHS, FHA or MI, if applicable Servicers must obtain Freddie Mac’s written pre-approval before incurring expenses on distressed properties that exceed the limits contained in Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts, by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). If unusual or emergency circumstances do not allow a Servicer to request Freddie Mac’s prior written approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the expense. Servicers must obtain Freddie Mac’s prior written approval to initiate foreclosure of a Mortgage on a distressed property as required in Section 9301.2(e).

(b) Properties that pose a Risk of Property Ownership If a property securing a Mortgage has been identified as posing a Risk of Property Ownership, the Servicer must contact Freddie Mac and report the Mortgage to Freddie Mac (see Directory 5), even if the Mortgage is not delinquent, within three Business Days of identifying the risk. In such instances, the Servicer must attach copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013 and any other relevant information when reporting the Risk of Property Ownership to Freddie Mac.

(c) Servicing Mortgages on Abandoned Properties A Servicer is responsible for acting without delay and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of an Abandoned Property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when Servicer becomes aware of a distressed property and fails to act to protect both Servicer’s and Freddie Mac’s interests as required by this section. (i) Defined term The following additional terms are used in this chapter: Abandoned Property definition A Abandoned Property An Abandoned Property is real property to which the owner has voluntarily and intentionally relinquished possession, claim and control, or real property defined as abandoned property by applicable laws. Conditions that may lead to abandonment include vacancy, waste, deterioration, lack of utilities or Delinquency. A Servicer must report all Mortgages on Abandoned Properties that are 30 or more days delinquent to Freddie Mac via an EDR transmission within the first three Business Days of the month following the month the Servicer determined the property is abandoned using occupancy code 07 (Abandoned). (ii) Determining if property is abandoned In accordance with applicable law, the Servicer must first determine if the Borrower has, in fact, abandoned the property and then take the following actions: 1. Attempt to locate the Borrower and determine the reason for abandonment 2. Protect the property from waste, damage and vandalism, and ensure the continuation of utilities, where necessary. Exhibit 57 describes the allowable preservation and maintenance expenses that may be incurred without obtaining Freddie Mac’s preapproval. (Refer to Section 9701.2(d) regarding reimbursement for property preservation expenses.) 3. Maintain accurate reports of any of these conditions, detailing actions to prevent losses 4. Ensure that property insurance is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. If the property is damaged, file a claim with the applicable property insurance company. 5. Obtain interior and exterior inspections in accordance with Section 9202.3(c) 6. Comply with the requirements of the VA, FHA, RHS or MI, if applicable 7. Initiate foreclosure proceedings if the Mortgage payments are delinquent. (Refer to Section 9301.6(d) regarding preserving the property during the foreclosure process.) 8. Provide to the Internal Revenue Service (IRS) and the Borrower IRS Form 1099-A, Acquisition or Abandonment of Secured Property, as required under Section 6050J of the Internal Revenue Code. (For IRS filing requirements see Section 8106.2(b).) Servicers must obtain Freddie Mac’s prior written approval via PAID before incurring expenses that either exceed the approval limits contained in Exhibit 57 or will be incurred after the date of a foreclosure sale, including where the property is sold to a third party. When a delay in taking protective action may result in impairment of the property, the Servicer must contact Freddie Mac via PAID for immediate approval. If the circumstance of incurring the expense is such that the Servicer cannot obtain Freddie Mac’s prior approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the Servicer for the expense.

Properties, distressed properties and properties that pose a Risk of Property Ownership (Future effective date 11/16/26) Refer to Bulletins 2026-G and 2026-11, which announced updates related to Freddie Mac’s new event-based default related reporting requirements. Beginning November 16, 2026, Servicers may implement the new requirements if they are operationally ready to do so. If a Servicer adopts the new event-based default related reporting standards before the mandatory effective date of September 27, 2027, it must comply with the associated Guide requirements that will be effective on September 27, 2027 and, upon such adoption, must discontinue monthly EDR reporting. This section contains requirements related to: ■ Servicing Mortgages on distressed properties ■ Properties that pose a Risk of Property Ownership ■ Servicing Mortgages on Abandoned Properties Servicers are responsible for acting without delay, and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of a Mortgaged Premises that becomes a distressed property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when the Servicer becomes aware of a distressed property and fails to act to protect both the Servicer’s and Freddie Mac’s interests as required by this section.

(a) Servicing Mortgages on distressed properties A distressed property is real property subject to a Mortgage that may or may not pose a Risk of Property Ownership (see Section 9202.2(b)) to Freddie Mac and is a property that: ■ Requires substantial repairs ■ Has sustained significant physical deterioration; or ■ Has been condemned by a local authority Even if the owner has abandoned the Mortgaged Premises, a Servicer must report all Mortgages on distressed properties that are 30 or more days delinquent via an EDR transmission within the first three Business Days of the month following the month in which the Servicer identified the problem using default reason code 011 (Property problem) and the applicable occupancy code. If a property is distressed, the Servicer must conduct a search of the records of the local code authority to determine if there is any outstanding health or safety violations filed against either the Borrower or the property. If a Servicer discovers any code violations on a distressed property, the Servicer must report them to Freddie Mac (see Directory 5) within three Business Days of identifying the violation. Servicers must attach a copy of the code violation and copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013, 1-4 Unit Property Inspection Report. In addition to any reporting requirement set forth above for distressed properties, the Servicer must: ■ Maintain a record of when the condition was discovered and take all necessary actions to protect the property from waste, damage and vandalism and prevent any loss ■ Inspect the property monthly until the condition is resolved ■ Ensure that property insurance coverage is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. ■ File a claim with the applicable property insurer on Freddie Mac’s behalf if the property is damaged and the Borrower has not filed a claim ■ Comply with the requirements of the VA, RHS, FHA or MI, if applicable Servicers must obtain Freddie Mac’s written pre-approval before incurring expenses on distressed properties that exceed the limits contained in Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts, by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). If unusual or emergency circumstances do not allow a Servicer to request Freddie Mac’s prior written approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the expense. Servicers must obtain Freddie Mac’s prior written approval to initiate foreclosure of a Mortgage on a distressed property as required in Section 9301.2(e).

(b) Properties that pose a Risk of Property Ownership If a property securing a Mortgage has been identified as posing a Risk of Property Ownership, the Servicer must contact Freddie Mac and report the Mortgage to Freddie Mac (see Directory 5), even if the Mortgage is not delinquent, within three Business Days of identifying the risk. In such instances, the Servicer must attach copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013 and any other relevant information when reporting the Risk of Property Ownership to Freddie Mac.

(c) Servicing Mortgages on Abandoned Properties A Servicer is responsible for acting without delay and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of an Abandoned Property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when Servicer becomes aware of a distressed property and fails to act to protect both Servicer’s and Freddie Mac’s interests as required by this section. (i) Defined term The following additional terms are used in this chapter: Abandoned Property definition A Abandoned Property An Abandoned Property is real property to which the owner has voluntarily and intentionally relinquished possession, claim and control, or real property defined as abandoned property by applicable laws. Conditions that may lead to abandonment include vacancy, waste, deterioration, lack of utilities or Delinquency. A Servicer must report all Mortgages on Abandoned Properties that are 30 or more days delinquent to Freddie Mac via an EDR transmission within the first three Business Days of the month following the month the Servicer determined the property is abandoned using occupancy code 07 (Abandoned). (ii) Determining if property is abandoned In accordance with applicable law, the Servicer must first determine if the Borrower has, in fact, abandoned the property and then take the following actions: 1. Attempt to locate the Borrower and determine the reason for abandonment 2. Protect the property from waste, damage and vandalism, and ensure the continuation of utilities, where necessary. Exhibit 57 describes the allowable preservation and maintenance expenses that may be incurred without obtaining Freddie Mac’s preapproval. (Refer to Section 9701.2(d) regarding reimbursement for property preservation expenses.) 3. Maintain accurate reports of any of these conditions, detailing actions to prevent losses 4. Ensure that property insurance is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. If the property is damaged, file a claim with the applicable property insurance company. 5. Obtain interior and exterior inspections in accordance with Section 9202.3(c) 6. Comply with the requirements of the VA, FHA, RHS or MI, if applicable 7. Initiate foreclosure proceedings if the Mortgage payments are delinquent. (Refer to Section 9301.6(d) regarding preserving the property during the foreclosure process.) 8. Provide to the Internal Revenue Service (IRS) and the Borrower IRS Form 1099-A, Acquisition or Abandonment of Secured Property, as required under Section 6050J of the Internal Revenue Code. (For IRS filing requirements see Section 8106.2(b).) Servicers must obtain Freddie Mac’s prior written approval via PAID before incurring expenses that either exceed the approval limits contained in Exhibit 57 or will be incurred after the date of a foreclosure sale, including where the property is sold to a third party. When a delay in taking protective action may result in impairment of the property, the Servicer must contact Freddie Mac via PAID for immediate approval. If the circumstance of incurring the expense is such that the Servicer cannot obtain Freddie Mac’s prior approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the Servicer for the expense.

Properties, distressed properties and properties that pose a Risk of Property Ownership (Future effective date 09/27/27) This section contains requirements related to: ■ Servicing Mortgages on distressed properties ■ Properties that pose a Risk of Property Ownership ■ Servicing Mortgages on Abandoned Properties Servicers are responsible for acting without delay, and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of a Mortgaged Premises that becomes a distressed property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when the Servicer becomes aware of a distressed property and fails to act to protect both the Servicer’s and Freddie Mac’s interests as required by this section.

(a) Servicing Mortgages on distressed properties A distressed property is real property subject to a Mortgage that may or may not pose a Risk of Property Ownership (see Section 9202.2(b)) to Freddie Mac and is a property that: ■ Requires substantial repairs ■ Has sustained significant physical deterioration; or ■ Has been condemned by a local authority Even if the owner has abandoned the Mortgaged Premises, a Servicer must report the occupancy status and property condition of all Mortgages on distressed properties that are 30 or more days delinquent via the Property Updates default related reporting event in accordance with Section 9102.6 and Exhibit 82, Default Reporting Dataset Guidelines. If a property is distressed, the Servicer must conduct a search of the records of the local code authority to determine if there are any outstanding health or safety violations filed against either the Borrower or the property. If a Servicer discovers any code violations on a distressed property, the Servicer must report the Property Updates default related reporting event in accordance with Section 9102.6 and Exhibit 82. Servicers must submit a copy of the code violation(s) and copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013, 1-4 Unit Property Inspection Report to Freddie Mac (see Directory 5). In addition to any reporting requirement set forth above for distressed properties, the Servicer must: ■ Maintain a record of when the condition was discovered and take all necessary actions to protect the property from waste, damage and vandalism and prevent any loss ■ Inspect the property monthly until the condition is resolved ■ Ensure that property insurance coverage is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. ■ File a claim with the applicable property insurer on Freddie Mac’s behalf if the property is damaged and the Borrower has not filed a claim ■ Comply with the requirements of the VA, RHS, FHA or MI, if applicable Servicers must obtain Freddie Mac’s written pre-approval before incurring expenses on distressed properties that exceed the limits contained in Exhibit 57, 1- to 4-Unit Property Approved Expense Amounts, by submitting a request for pre-approval via PAID (Payments Automated Intelligent and Dynamic) (see Exhibit 88, Servicing Tools). If unusual or emergency circumstances do not allow a Servicer to request Freddie Mac’s prior written approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the expense. Servicers must obtain Freddie Mac’s prior written approval to initiate foreclosure of a Mortgage on a distressed property as required in Section 9301.2(e).

(b) Properties that pose a Risk of Property Ownership If a property securing a Mortgage has been identified as posing a Risk of Property Ownership, the Servicer must report the Property Update default related reporting event in accordance with Section 9102.6 and Exhibit 82, even if the Mortgage is not delinquent. The Servicer must submit copies of the most recent six consecutive months (or less, depending on the level of Delinquency) of Form 1013 and any other relevant information when reporting the Risk of Property Ownership to Freddie Mac (see Directory 5).

(c) Servicing Mortgages on Abandoned Properties A Servicer is responsible for acting without delay and in an efficient and responsible manner to protect both the Servicer’s and Freddie Mac’s interests when the Servicer becomes aware of an Abandoned Property. Note: Refer to Section 9401.1(b) for information regarding Freddie Mac’s rights when Servicer becomes aware of a distressed property and fails to act to protect both Servicer’s and Freddie Mac’s interests as required by this section. (i) Defined term The following additional terms are used in this chapter: Abandoned Property definition A Abandoned Property An Abandoned Property is real property to which the owner has voluntarily and intentionally relinquished possession, claim and control, or real property defined as abandoned property by applicable laws. Conditions that may lead to abandonment include vacancy, waste, deterioration, lack of utilities or Delinquency. A Servicer must report the occupancy status and property condition of all Mortgages on Abandoned Properties that are 30 or more days delinquent to Freddie Mac via the Property Update default related reporting event in accordance with Section 9102.6 and Exhibit 82 when the Servicer determines the property is abandoned. (ii) Determining if property is abandoned In accordance with applicable law, the Servicer must first determine if the Borrower has, in fact, abandoned the property and then take the following actions: 1. Attempt to locate the Borrower and determine the reason for abandonment 2. Protect the property from waste, damage and vandalism, and ensure the continuation of utilities, where necessary. Exhibit 57 describes the allowable preservation and maintenance expenses that may be incurred without obtaining Freddie Mac’s preapproval. (Refer to Section 9701.2(d) regarding reimbursement for property preservation expenses.) 3. Maintain accurate reports of any of these conditions, detailing actions to prevent losses 4. Ensure that property insurance is maintained. This includes taking all actions required in the mortgage clause of all applicable property insurance policies, including, but not limited to, providing all notices to the insurer required under such clause, in order to preserve the coverage and its maximum benefits for the Servicer and/or Freddie Mac, as mortgagee. If the property is damaged, file a claim with the applicable property insurance company. 5. Obtain interior and exterior inspections in accordance with Section 9202.3(c) 6. Comply with the requirements of the VA, FHA, RHS or MI, if applicable 7. Initiate foreclosure proceedings if the Mortgage payments are delinquent. (Refer to Section 9301.6(d) regarding preserving the property during the foreclosure process.) 8. Provide to the Internal Revenue Service (IRS) and the Borrower IRS Form 1099-A, Acquisition or Abandonment of Secured Property, as required under Section 6050J of the Internal Revenue Code. (For IRS filing requirements see Section 8106.2(b).) Servicers must obtain Freddie Mac’s prior written approval via PAID before incurring expenses that either exceed the approval limits contained in Exhibit 57 or will be incurred after the date of a foreclosure sale, including where the property is sold to a third party. When a delay in taking protective action may result in impairment of the property, the Servicer must contact Freddie Mac via PAID for immediate approval. If the circumstance of incurring the expense is such that the Servicer cannot obtain Freddie Mac’s prior approval, then the Servicer must notify Freddie Mac via PAID by the next Business Day after the Servicer incurred the expense. If the Servicer’s determination to incur the expense was reasonable, as determined in Freddie Mac’s sole discretion, Freddie Mac will reimburse the Servicer for the expense.