source:
  type: guide
  id: fhlmc-4602.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4602.2 — One-Time
    Close transactions
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 4602.2 — One-Time
    Close transactions.
  coverage_tier: operative
obligations:
- id: fhlmc-4602.2-full
  canonical_id: fhlmc-4602.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 4602.2 — One-Time
    Close transactions
  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 4602.2 — One-Time
      Close transactions
    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: '4602.2: One-Time Close transactions (02/04/26) Refer to Bulletin
      2025-7, which announced the policy requirements for Uniform Appraisal Dataset
      (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal® appraisal
      reports that use UAD 3.6 before the mandatory effective November 2, 2026 version
      of this section. The requirements of this section apply to all One-Time Close
      Construction to Permanent Mortgages and Renovation Mortgages unless otherwise
      specified. This section contains requirements related to: ■ Overview of One-Time
      Close transactions ■ One-Time Close with automatic conversion documentation
      structure ■ One-Time Close with a modification agreement documentation structure
      ■ Mortgage purpose ■ Underwriting requirements ■ Calculation of value ■ Appraisal
      requirements (a) Overview of One-Time Close transactions In a One-Time Close
      transaction, the Note and the Security Instrument documenting the Permanent
      Financing are executed at the time of closing for the Interim Construction Financing.
      The terms of the Interim Construction Financing are incorporated into the Note
      for the Permanent Financing. A One-Time Close transaction must be converted
      to Permanent Financing either through automatic conversion or a modification.
      For a One-Time Close transaction, the construction phase of the Construction
      to Permanent Mortgage must be structured as a temporary loan exempt from the
      ability-to-repay requirements under Regulation Z. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-11 (b) One-Time
      Close with automatic conversion documentation structure In a One-Time Close
      with automatic conversion, Interim Construction Financing automatically converts
      to Permanent Financing upon completion of construction or renovations with no
      change to the terms of the Note. For a One-Time Close with automatic conversion,
      the Mortgage file must include all of the following: ■ Uniform Security Instrument
      ■ Uniform Note applicable to the Permanent Financing Mortgage Product ■ Addendum
      to the Uniform Note with the terms of the Interim Construction Financing (c)
      One-Time Close with a modification agreement documentation structure (i)Documentation
      requirements In a One-Time Close with a modification agreement, a Construction
      to Permanent Modification Agreement is used to convert the Interim Construction
      Financing to Permanent Financing. The Seller must use the applicable Construction
      to Permanent Modification Agreement in the table below or a substantially similar
      modification agreement. Mortgage Product for Permanent Financing prior to modification
      at closing of Interim Construction Financing Mortgage Product for modified Permanent
      Financing Freddie Mac Construction to Permanent Modification Agreement Fixed-rate
      Mortgage Fixed-rate Mortgage Form 5166 ARM Fixed-rate Mortgage ARM ARM Form
      5167 In a One-Time Close with a modification agreement, the Mortgage file must
      include all of the following: ■ Uniform Security Instrument Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-12 ■ Uniform Note
      applicable to the Mortgage Product for the Permanent Financing executed at the
      closing of the Interim Construction Financing prior to the modification ■ Addendum
      to the Uniform Note with the terms of the Interim Construction Financing ■ Construction
      to Permanent Modification Agreement applicable to the Mortgage Product for the
      Permanent Financing (ii)Terms of Permanent Financing that may be modified The
      Seller may only modify the following terms of the Permanent Financing: ■ Interest
      rate ■ Loan balance, provided that increases in the loan balance are permitted
      only to cover documented increases in the cost of construction or renovation
      ■ Payment amount ■ Term ■ Change in amortization type from ARM to fixed-rate
      Mortgage Multiple terms described above may be modified simultaneously with
      a Construction to Permanent Modification Agreement. However, such terms may
      only be modified once. Construction to Permanent Mortgages and Renovation Mortgages
      with multiple modification agreements are not eligible for sale to Freddie Mac.
      Changes to the terms above will require resubmission to Loan Product Advisor®
      unless the requirements in Section 4602.2(e)(iii) below do not require the Seller
      to resubmit the Mortgage to Loan Product Advisor. (d) Mortgage purpose (i)Determining
      Mortgage purpose The Mortgage may be a purchase transaction Mortgage or a refinance
      Mortgage as follows: ■ The Mortgage is a purchase transaction Mortgage if, prior
      to the closing of the Interim Construction Financing, the Borrower is not the
      owner of record of the land or Mortgaged Premises, or is not the lessee of the
      leasehold estate, as applicable Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 4602 As of 02/04/26 Page 4602-13 ■ The Mortgage is a refinance Mortgage
      if, prior to the closing of the Interim Construction Financing, the Borrower
      is the owner of record of the land or Mortgaged Premises, or is the lessee of
      the leasehold estate, as applicable (ii)Requirements for refinance Mortgages
      (A) “No cash-out” refinance Mortgages “No cash-out” refinance Mortgages must
      meet the requirements in Section 4301.4, except as stated below. For purposes
      of Section 4301.4, the amount of the Interim Construction Financing secured
      by the Mortgaged Premises is considered an amount used to pay off the first
      Mortgage as described in Section 4301.4. The proceeds of the Permanent Financing
      may be used to pay off a junior lien(s) secured by the Mortgaged Premises provided
      the lien(s) were used in their entirety for the construction or renovation of
      the subject property, as applicable, as documented in the Mortgage file. Paying
      off unsecured lien(s) or construction costs paid by the Borrower outside of
      the secured Interim Construction Financing is considered cash out to the Borrower,
      if above $2,000 or 1% of the loan amount, whichever is greater. (B) Cash-out
      refinance Mortgages Cash-out refinance Mortgages must meet the requirements
      in Section 4301.5. Cash- out refinance Mortgages that are Construction to Permanent
      Mortgages or Renovation Mortgages must not be secured by Manufactured Homes.
      At least one Borrower must have been on the title to the land for six months
      or more prior to the Effective Date of Permanent Financing, or at least one
      Borrower must have inherited or was legally awarded the land in accordance with
      a final judgment or decision from a legal body (e.g., court, jury, judge or
      arbitrator) such as in a case of divorce, separation or dissolution of a domestic
      partnership. (e) Underwriting requirements (i) General underwriting requirements
      The Seller must underwrite the Mortgage based on the terms of Permanent Financing.
      If terms of the Permanent Financing are modified or if the appraisal update
      indicates the property value has declined, then: ■ For a Loan Product Advisor
      Mortgage, it may require resubmission of the Mortgage to Loan Product Advisor
      as described in Section 4602.2(e)(iii), or Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4602 As of 02/04/26 Page 4602-14 ■ For a Non-Loan Product Advisor
      Mortgage, the Mortgage must be re-underwritten (ii) Age of documentation requirements
      The age of documentation requirements in Section 5102.4 must be met. Exceptions:
      ■ For One-Time Close Construction to Permanent Mortgages, income, employment
      and credit report documentation may be dated more than 120 days before the Effective
      Date of Permanent Financing, but dated no more than 540 calendar days before
      the Effective Date of Permanent Financing, when all of the following requirements
      are met: ❑ The Mortgage must be an Accept Mortgage ❑ The documentation must
      be dated no more than 120 calendar days before the Note Date of the Interim
      Construction Financing ❑ The credit report must be dated no more than 120 calendar
      days before the date of the first submission to Loan Product Advisor ❑ The loan-to-value
      (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV)
      ratios must not exceed 95% ❑ For employed Borrowers, the Seller must verify
      employment with a 10-day pre closing verification in accordance with the requirements
      in Section 5302.2(d), except that references to Note Date in Section 5302.2(d)
      shall mean the Note Date of Interim Construction Financing and not the Effective
      Date of Permanent Financing ❑ For self-employed Borrowers, the Seller must verify
      current existence of the business in accordance with Section 5304.1(m) within
      120 days prior to the Note Date of Interim Construction Financing, except that
      references to Note Date in Section 5304.1(m) shall mean the Note Date of the
      Interim Construction Financing and not the Effective Date of Permanent Financing
      ■ For One-Time Close Construction to Permanent Mortgages, asset documentation
      must be dated no more than 120 calendar days before the Note Date of Interim
      Construction Financing. Updated asset documentation is not required unless either
      of the following apply: ❑ Additional funds are required to be paid by the Borrower
      at conversion to Permanent Financing. The additional funds meeting the requirements
      in Chapter 5501 must be verified and the verification documentation must be
      dated no more than 120 calendar days before the Effective Date of Permanent
      Financing, or Freddie Mac Single-Family Seller/Servicer Guide Chapter 4602 As
      of 02/04/26 Page 4602-15 ❑ Additional reserves are required due to re-underwriting
      of the Mortgage prior to conversion to Permanent Financing. The full amount
      of required reserves meeting the requirements in Chapter 5501 must be verified
      and verification documentation must be dated no more than 120 calendar days
      before the Effective Date of Permanent Financing (iii)Resubmission of Loan Product
      Advisor Mortgages not required Loan Product Advisor Mortgages must meet the
      requirements in Chapter 5101 except that resubmission of a Mortgage to Loan
      Product Advisor is not required if there is: ■ A change from the previous submission
      if the change involves one of the exceptions in Section 5101.3 ■ A decrease
      in the loan amount, provided the Permanent Financing complies with all of the
      following requirements: ❑ When there is an increase in the Down Payment, all
      funds used to reduce the loan amount must meet the requirements of Chapter 5501
      ❑ The decrease in the loan amount does not change the level of mortgage insurance
      coverage. For example, if the property value is $120,000 and the loan amount
      is $114,000 (95% LTV ratio), the loan amount may decrease to $109,200 (91% LTV
      ratio). However, if the loan amount decreases to $108,000 (90% LTV ratio), the
      loan must be resubmitted. ■ A change from an ARM to a fixed-rate Mortgage, provided
      the Permanent Financing complies with all of the following requirements: ❑ The
      Permanent Financing is not subject to a temporary subsidy buydown plan ❑ In
      the prior submission, the Borrower was qualified with an ARM monthly housing
      expense payment equal to or greater than the fixed-rate monthly housing expense
      ❑ The Mortgage term of the fixed-rate Mortgage is the same as the Mortgage term
      for the ARM ■ A decrease in the reserves amount, provided that the amount of
      verified reserves is no less than the reserves required to be verified on the
      Feedback Certificate (f) Calculation of value The value used to determine the
      LTV, TLTV and HTLTV ratios must be established as follows: Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-16 Value for One-Time
      Close purchase transaction Mortgages Property type Construction to Permanent
      Mortgages Renovation Mortgages 1- to 4-unit site- built home Value is the lesser
      of: ■ The purchase price of the Mortgaged Premises (the purchase price of the
      land1 and total construction costs2), or ■ Appraised value of the Mortgaged
      Premises, as completed Value is the lesser of: ■ The purchase price of the Mortgaged
      Premises prior to the renovation plus the renovation costs (costs of demolition
      and reconstruction)2, or ■ Appraised value of the Mortgaged Premises, as completed
      1-unit Manufactured Home Value is the lesser of: ■ The purchase price of the
      Manufactured Home, plus the lowest purchase price at which the land was sold
      during the most recent 12-month period1, or ■ Appraised value of the Mortgaged
      Premises, as completed Not eligible 1If the Borrower acquired the land as a
      gift or by inheritance, the value of the land as reported on the appraisal report
      may be used in lieu of the purchase price of the land. 2Any item that is included
      in the calculation of cost to construct or renovate the property must be commonly
      and customarily included in the cost to construct or renovate other properties
      in the area where the Mortgaged Premises is located. The cost to construct or
      renovate must not include items such as furniture, electronic and home entertainment
      equipment or other personal property, except for appliances. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-17 Value for One-Time
      Close “no cash-out” refinance Mortgages Property type Construction to Permanent
      Mortgages Renovation Mortgages 1- to 4-unit site- built home Appraised value
      of the Mortgaged Premises, as completed 1-unit Manufactured Home Appraised value
      of the Mortgaged Premises, as completed Not eligible Value for One-Time Close
      cash-out refinance Mortgages Property type Value 1- to 4-unit site-built home
      Appraised value of the Mortgaged Premises, as completed 1-unit Manufactured
      Home Not eligible (g) Appraisal requirements The Seller must obtain an appraisal
      report with an interior and exterior inspection. The appraisal report must include
      an “as completed” value of the property subject to completion of the improvements
      based on the plans and specifications. Upon completion of the construction or
      renovations, the Seller must obtain an appraisal update reported on Form 442,
      Appraisal Update and/or Completion Report. Form 442 must also document that
      all improvements were completed in accordance with the plans and specifications
      and must meet the requirements for verifying completion in Section 5605.8. The
      effective date of the appraisal update must be no more than 120 days before
      the Effective Date of Permanent Financing. When the appraisal update indicates
      the value of the subject property has declined, the Seller must obtain a new
      appraisal report. For One-Time Close Construction to Permanent Mortgages, the
      effective date of the appraisal report must be no more than 4 months prior to
      the Note Date of the Interim Construction Financing. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-18 For One-Time
      Close Renovation Mortgages, the effective date of the appraisal report must
      be no more than 12 months before the Effective Date of Permanent Financing.
      The Seller represents and warrants that the originating lender provided the
      appraiser with all the appraisal information required in Topic 5600, including
      plans and specifications. 4602.2: One-Time Close transactions (Future effective
      date 11/02/26) The requirements of this section apply to all One-Time Close
      Construction to Permanent Mortgages and Renovation Mortgages unless otherwise
      specified. This section contains requirements related to: ■ Overview of One-Time
      Close transactions ■ One-Time Close with automatic conversion documentation
      structure ■ One-Time Close with a modification agreement documentation structure
      ■ Mortgage purpose ■ Underwriting requirements ■ Calculation of value ■ Appraisal
      requirements (a) Overview of One-Time Close transactions In a One-Time Close
      transaction, the Note and the Security Instrument documenting the Permanent
      Financing are executed at the time of closing for the Interim Construction Financing.
      The terms of the Interim Construction Financing are incorporated into the Note
      for the Permanent Financing. A One-Time Close transaction must be converted
      to Permanent Financing either through automatic conversion or a modification.
      For a One-Time Close transaction, the construction phase of the Construction
      to Permanent Mortgage must be structured as a temporary loan exempt from the
      ability-to-repay requirements under Regulation Z. (b) One-Time Close with automatic
      conversion documentation structure Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4602 As of 02/04/26 Page 4602-19 In a One-Time Close with automatic
      conversion, Interim Construction Financing automatically converts to Permanent
      Financing upon completion of construction or renovations with no change to the
      terms of the Note. For a One-Time Close with automatic conversion, the Mortgage
      file must include all of the following: ■ Uniform Security Instrument ■ Uniform
      Note applicable to the Permanent Financing Mortgage Product ■ Addendum to the
      Uniform Note with the terms of the Interim Construction Financing (c) One-Time
      Close with a modification agreement documentation structure (i)Documentation
      requirements In a One-Time Close with a modification agreement, a Construction
      to Permanent Modification Agreement is used to convert the Interim Construction
      Financing to Permanent Financing. The Seller must use the applicable Construction
      to Permanent Modification Agreement in the table below or a substantially similar
      modification agreement. Mortgage Product for Permanent Financing prior to modification
      at closing of Interim Construction Financing Mortgage Product for modified Permanent
      Financing Freddie Mac Construction to Permanent Modification Agreement Fixed-rate
      Mortgage Fixed-rate Mortgage Form 5166 ARM Fixed-rate Mortgage ARM ARM Form
      5167 In a One-Time Close with a modification agreement, the Mortgage file must
      include all of the following: ■ Uniform Security Instrument ■ Uniform Note applicable
      to the Mortgage Product for the Permanent Financing executed at the closing
      of the Interim Construction Financing prior to the modification Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-20
      ■ Addendum to the Uniform Note with the terms of the Interim Construction Financing
      ■ Construction to Permanent Modification Agreement applicable to the Mortgage
      Product for the Permanent Financing (ii)Terms of Permanent Financing that may
      be modified The Seller may only modify the following terms of the Permanent
      Financing: ■ Interest rate ■ Loan balance, provided that increases in the loan
      balance are permitted only to cover documented increases in the cost of construction
      or renovation ■ Payment amount ■ Term ■ Change in amortization type from ARM
      to fixed-rate Mortgage Multiple terms described above may be modified simultaneously
      with a Construction to Permanent Modification Agreement. However, such terms
      may only be modified once. Construction to Permanent Mortgages and Renovation
      Mortgages with multiple modification agreements are not eligible for sale to
      Freddie Mac. Changes to the terms above will require resubmission to Loan Product
      Advisor® unless the requirements in Section 4602.2(e)(iii) below do not require
      the Seller to resubmit the Mortgage to Loan Product Advisor. (d) Mortgage purpose
      (i)Determining Mortgage purpose The Mortgage may be a purchase transaction Mortgage
      or a refinance Mortgage as follows: ■ The Mortgage is a purchase transaction
      Mortgage if, prior to the closing of the Interim Construction Financing, the
      Borrower is not the owner of record of the land or Mortgaged Premises, or is
      not the lessee of the leasehold estate, as applicable ■ The Mortgage is a refinance
      Mortgage if, prior to the closing of the Interim Construction Financing, the
      Borrower is the owner of record of the land or Mortgaged Premises, or is the
      lessee of the leasehold estate, as applicable Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4602 As of 02/04/26 Page 4602-21 (ii)Requirements for refinance
      Mortgages (A) “No cash-out” refinance Mortgages “No cash-out” refinance Mortgages
      must meet the requirements in Section 4301.4, except as stated below. For purposes
      of Section 4301.4, the amount of the Interim Construction Financing secured
      by the Mortgaged Premises is considered an amount used to pay off the first
      Mortgage as described in Section 4301.4. The proceeds of the Permanent Financing
      may be used to pay off a junior lien(s) secured by the Mortgaged Premises provided
      the lien(s) were used in their entirety for the construction or renovation of
      the subject property, as applicable, as documented in the Mortgage file. Paying
      off unsecured lien(s) or construction costs paid by the Borrower outside of
      the secured Interim Construction Financing is considered cash out to the Borrower,
      if above $2,000 or 1% of the loan amount, whichever is greater. (B) Cash-out
      refinance Mortgages Cash-out refinance Mortgages must meet the requirements
      in Section 4301.5. Cash- out refinance Mortgages that are Construction to Permanent
      Mortgages or Renovation Mortgages must not be secured by Manufactured Homes.
      At least one Borrower must have been on the title to the land for six months
      or more prior to the Effective Date of Permanent Financing, or at least one
      Borrower must have inherited or was legally awarded the land in accordance with
      a final judgment or decision from a legal body (e.g., court, jury, judge or
      arbitrator) such as in a case of divorce, separation or dissolution of a domestic
      partnership. (e) Underwriting requirements (i) General underwriting requirements
      The Seller must underwrite the Mortgage based on the terms of Permanent Financing.
      If terms of the Permanent Financing are modified or if the appraisal update
      indicates the property value has declined, then: ■ For a Loan Product Advisor
      Mortgage, it may require resubmission of the Mortgage to Loan Product Advisor
      as described in Section 4602.2(e)(iii), or ■ For a Non-Loan Product Advisor
      Mortgage, the Mortgage must be re-underwritten Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4602 As of 02/04/26 Page 4602-22 (ii) Age of documentation requirements
      The age of documentation requirements in Section 5102.4 must be met. Exceptions:
      ■ For One-Time Close Construction to Permanent Mortgages, income, employment
      and credit report documentation may be dated more than 120 days before the Effective
      Date of Permanent Financing, but dated no more than 540 calendar days before
      the Effective Date of Permanent Financing, when all of the following requirements
      are met: ❑ The Mortgage must be an Accept Mortgage ❑ The documentation must
      be dated no more than 120 calendar days before the Note Date of the Interim
      Construction Financing ❑ The credit report must be dated no more than 120 calendar
      days before the date of the first submission to Loan Product Advisor ❑ The loan-to-value
      (LTV), total LTV (TLTV) and Home Equity Line of Credit (HELOC) TLTV (HTLTV)
      ratios must not exceed 95% ❑ For employed Borrowers, the Seller must verify
      employment with a 10-day pre closing verification in accordance with the requirements
      in Section 5302.2(d), except that references to Note Date in Section 5302.2(d)
      shall mean the Note Date of Interim Construction Financing and not the Effective
      Date of Permanent Financing ❑ For self-employed Borrowers, the Seller must verify
      current existence of the business in accordance with Section 5304.1(m) within
      120 days prior to the Note Date of Interim Construction Financing, except that
      references to Note Date in Section 5304.1(m) shall mean the Note Date of the
      Interim Construction Financing and not the Effective Date of Permanent Financing
      ■ For One-Time Close Construction to Permanent Mortgages, asset documentation
      must be dated no more than 120 calendar days before the Note Date of Interim
      Construction Financing. Updated asset documentation is not required unless either
      of the following apply: ❑ Additional funds are required to be paid by the Borrower
      at conversion to Permanent Financing. The additional funds meeting the requirements
      in Chapter 5501 must be verified and the verification documentation must be
      dated no more than 120 calendar days before the Effective Date of Permanent
      Financing, or Freddie Mac Single-Family Seller/Servicer Guide Chapter 4602 As
      of 02/04/26 Page 4602-23 ❑ Additional reserves are required due to re-underwriting
      of the Mortgage prior to conversion to Permanent Financing. The full amount
      of required reserves meeting the requirements in Chapter 5501 must be verified
      and verification documentation must be dated no more than 120 calendar days
      before the Effective Date of Permanent Financing (iii)Resubmission of Loan Product
      Advisor Mortgages not required Loan Product Advisor Mortgages must meet the
      requirements in Chapter 5101 except that resubmission of a Mortgage to Loan
      Product Advisor is not required if there is: ■ A change from the previous submission
      if the change involves one of the exceptions in Section 5101.3 ■ A decrease
      in the loan amount, provided the Permanent Financing complies with all of the
      following requirements: ❑ When there is an increase in the Down Payment, all
      funds used to reduce the loan amount must meet the requirements of Chapter 5501
      ❑ The decrease in the loan amount does not change the level of mortgage insurance
      coverage. For example, if the property value is $120,000 and the loan amount
      is $114,000 (95% LTV ratio), the loan amount may decrease to $109,200 (91% LTV
      ratio). However, if the loan amount decreases to $108,000 (90% LTV ratio), the
      loan must be resubmitted. ■ A change from an ARM to a fixed-rate Mortgage, provided
      the Permanent Financing complies with all of the following requirements: ❑ The
      Permanent Financing is not subject to a temporary subsidy buydown plan ❑ In
      the prior submission, the Borrower was qualified with an ARM monthly housing
      expense payment equal to or greater than the fixed-rate monthly housing expense
      ❑ The Mortgage term of the fixed-rate Mortgage is the same as the Mortgage term
      for the ARM ■ A decrease in the reserves amount, provided that the amount of
      verified reserves is no less than the reserves required to be verified on the
      Feedback Certificate (f) Calculation of value The value used to determine the
      LTV, TLTV and HTLTV ratios must be established as follows: Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-24 Value for One-Time
      Close purchase transaction Mortgages Property type Construction to Permanent
      Mortgages Renovation Mortgages 1- to 4-unit site- built home Value is the lesser
      of: ■ The purchase price of the Mortgaged Premises (the purchase price of the
      land1 and total construction costs2), or ■ Appraised value of the Mortgaged
      Premises, as completed Value is the lesser of: ■ The purchase price of the Mortgaged
      Premises prior to the renovation plus the renovation costs (costs of demolition
      and reconstruction)2, or ■ Appraised value of the Mortgaged Premises, as completed
      1-unit Manufactured Home Value is the lesser of: ■ The purchase price of the
      Manufactured Home, plus the lowest purchase price at which the land was sold
      during the most recent 12-month period1, or ■ Appraised value of the Mortgaged
      Premises, as completed Not eligible 1If the Borrower acquired the land as a
      gift or by inheritance, the value of the land as reported on the appraisal report
      may be used in lieu of the purchase price of the land. 2Any item that is included
      in the calculation of cost to construct or renovate the property must be commonly
      and customarily included in the cost to construct or renovate other properties
      in the area where the Mortgaged Premises is located. The cost to construct or
      renovate must not include items such as furniture, electronic and home entertainment
      equipment or other personal property, except for appliances. Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4602 As of 02/04/26 Page 4602-25 Value for One-Time
      Close “no cash-out” refinance Mortgages Property Type Construction to Permanent
      Mortgages Renovation Mortgages 1- to 4-unit site- built home Appraised value
      of the Mortgaged Premises, as completed 1-unit Manufactured Home Appraised value
      of the Mortgaged Premises, as completed Not eligible Value for One-Time Close
      cash-out refinance Mortgages Property Type Value 1- to 4-unit site-built home
      Appraised value of the Mortgaged Premises, as completed 1-unit Manufactured
      Home Not eligible (g) Appraisal requirements The Seller must obtain a Traditional
      Appraisal Report, which must include an “as completed” value of the property
      subject to completion of the improvements based on the plans and specifications.
      Upon completion of the construction or renovations, the Seller must obtain the
      following: ■ Restricted Appraisal Update Report. The effective date of the appraisal
      update must be no more than 120 days before the Effective Date of Permanent
      Financing. ■ Documentation verifying that all improvements were completed in
      accordance with the plans and specifications. The requirements in Section 5605.9
      for verifying completion must be met. When the appraisal update indicates the
      value of the subject property has declined, the Seller must obtain a new Traditional
      Appraisal Report or Exterior Appraisal Report. For One-Time Close Construction
      to Permanent Mortgages, the effective date of the Traditional Appraisal Report
      must be no more than 4 months prior to the Note Date of the Interim Construction
      Financing. For One-Time Close Renovation Mortgages, the effective date of the
      Traditional Appraisal Report must be no more than 12 months before the Effective
      Date of Permanent Financing. Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 4602 As of 02/04/26 Page 4602-26 The Seller represents and warrants
      that the originating lender provided the appraiser with all the appraisal information
      required in Topic 5600, including plans and specifications.'
  judgment: false
