source:
  type: guide
  id: fhlmc-4301.4
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4301.4 — "No
    cash-out" refinance Mortgages
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 4301.4 — "No
    cash-out" refinance Mortgages.
  coverage_tier: operative
obligations:
- id: fhlmc-4301.4-full
  canonical_id: fhlmc-4301.4-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 4301.4 — "No cash-out"
    refinance Mortgages
  type: do
  tags:
  - regulator-direct
  - fhlmc
  - freddie-guide
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4301.4 — "No
      cash-out" refinance Mortgages
    source_class: fhlmc-guide
    source_url: https://guide.freddiemac.com/ci-guide
    snapshot_id: 5869ee9e606cd4ae
    fetched_at: '2026-05-23T00:27:40Z'
    content_hash: sha256:9a1b23e5024bb369e7a59d36b3702383c11ace68b5d209fdef791bc8f955c637
    paragraph_quote: '4301.4: “No cash-out” refinance Mortgages (02/04/26) A “no cash-out”
      refinance Mortgage is a Mortgage for which the proceeds may be used only as
      described in this section. A “no cash-out” refinance Mortgage must meet the
      Borrower requirements in Section 4301.2. This section contains requirements
      related to: ■ Allowable uses of proceeds from a “no cash-out” refinance Mortgage
      ■ Allowable uses of proceeds for Refi Possible® Mortgages, CHOICERenovation®
      Mortgages, GreenCHOICE Mortgages®, Construction to Permanent Mortgages and Renovation
      Mortgages ■ Treatment of excess proceeds (a) Allowable uses of proceeds from
      a “no cash-out” refinance Mortgage Proceeds from a “no cash-out” refinance Mortgage
      may be used only to: ■ Pay off the principal and interest due, which may include
      the payoff of a balance deferred under a loss mitigation plan, for the following:
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 4301 As of 02/04/26
      Page 4301-5 ❑ First Mortgage, regardless of its age, provided the first Mortgage
      was used to acquire the property, regardless of the age of the first Mortgage,
      or ❑ First Mortgage, originated as a refinance transaction, with a Note Date
      no less than 30 days prior to the Note Date of the “no cash-out” refinance Mortgage,
      as documented in the Mortgage file (e.g., on the credit report or the title
      commitment) ■ 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 liens secured by the Mortgaged Premises that
      were used in their entirety to acquire the subject property. Any remaining balance
      must be subordinated to the refinance Mortgage. ❑ The Borrower is not required
      to satisfy outstanding junior liens secured by the Mortgaged Premises, provided
      that the junior lien meets the requirements for secondary financing in Section
      4204.1 and/or Affordable Seconds® in Section 4204.2, as applicable ❑ If a junior
      lien was paid off as part of the “no cash-out” refinance transaction, the Seller
      must maintain documentation in the Mortgage file demonstrating that the full
      amount of the lien was used for the purchase of the subject property ■ Pay any
      required share of appreciation due to the subsidy provider per the resale restricted
      covenants, subject to the requirements in Section 4406.8(b) ■ Pay related Closing
      Costs. Note: Real estate taxes that are past due and/or delinquent, as defined
      by the taxing authority, may not be paid with the proceeds of the “no cash-out”
      refinance Mortgage, except that if the transaction results in cash out as permitted
      in the following bullet, these funds may be used to pay the delinquent taxes.
      ■ Disburse cash out to the Borrower (or any other payee) up to the greater of
      1% of the new refinance Mortgage or $2,000 ■ Pay off the outstanding balance
      of a land contract or contract for deed if the following requirements from Section
      4404.1 are met: ❑ A copy of the executed land contract or contract for deed
      must be included in the Mortgage file ❑ The land contract or contract for deed
      must have been executed at least 12 months prior to the Application Received
      Date Freddie Mac Single-Family Seller/Servicer Guide Chapter 4301 As of 02/04/26
      Page 4301-6 ❑ The Mortgage file must include third-party documentation evidencing
      payments in accordance with the land contract or contract for deed for the most
      recent 12-month period ❑ The loan-to-value ratio must be calculated using the
      current appraised value of the Mortgaged Premises ■ Pay off a Property Assessed
      Clean Energy (PACE) or PACE-like obligation, subject to the additional requirements
      in Section 4301.8 (b) Allowable uses of proceeds for Refi Possible Mortgages,
      CHOICERenovation Mortgages, GreenCHOICE Mortgages, Construction to Permanent
      Mortgages and Renovation Mortgages ■ For Refi Possible Mortgages, see the limitations
      on the uses of proceeds in Section 4302.5 ■ For CHOICERenovation Mortgages,
      proceeds may be used to pay off the existing Mortgage debt and/or finance the
      eligible renovations as described in Section 4607.6, subject to the additional
      requirements in Sections 4607.7(c) and 4607.7(d), as applicable ■ For GreenCHOICE
      Mortgages, proceeds may be used to pay an Existing Debt, as defined in Section
      4606.1(c), subject to the additional requirements in Section 4606.3(b), and
      to finance eligible improvements as described in Section 4606.1(b), subject
      to the additional requirements in Section 4606.3(a) ■ For Construction to Permanent
      Mortgages and Renovation Mortgages, see Chapter 4602 (c) Treatment of excess
      proceeds If there are remaining proceeds from the “no cash-out” refinance Mortgage
      after the proceeds are applied as described above: ■ The Mortgage amount must
      be reduced, or ■ The excess amount must be applied as a principal curtailment
      to the new refinance Mortgage at closing and must be clearly reflected on the
      Settlement/Closing Disclosure Statement. See Section 6302.32 for special delivery
      requirements for Mortgages with principal curtailments. Under no circumstances
      may cash disbursed to the Borrower (or any other payee) exceed the maximum permitted
      for “no cash-out” refinance Mortgages. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4301 As of 02/04/26 Page 4301-7'
  judgment: false
