source:
  type: guide
  id: fhlmc-5605.4
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 5605.4 — Site
    and location analysis
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 5605.4 — Site
    and location analysis.
  coverage_tier: operative
obligations:
- id: fhlmc-5605.4-full
  canonical_id: fhlmc-5605.4-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 5605.4 — Site and
    location analysis
  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 5605.4 — Site
      and location analysis
    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: '5605.4: Site and location analysis (01/26/26) 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. This section contains requirements related to: ■ Property characteristics
      ■ Environmental issues and detrimental conditions (a) Property characteristics
      The “Site” section of the appraisal report must accurately describe the physical
      characteristics of the site, site improvements, site view and available utilities,
      and it must fully analyze any locational factors affecting the site. Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5605 As of 02/04/26 Page 5605-10
      (i) Zoning The appraisal report must accurately describe: ■ The zoning classification
      ■ A description of the zoning classification ■ Whether the land use of the subject
      property represents a legal use, a legal non- conforming use (commonly referred
      to as grandfathered use), or an illegal use, or there is no zoning (A) Eligible
      zoning classification Freddie Mac does not limit Mortgage purchases to Mortgages
      secured by properties with specific zoning classifications; however, the Mortgaged
      Premises zoning classification is an important characteristic the Seller must
      consider when determining whether the Mortgage is eligible for sale to Freddie
      Mac. Example: If a property is zoned for agricultural use, the Seller must ensure
      the property is residential in nature, its residential use is a permissible
      use under the zoning classification and its use does not primarily involve commercial
      activities such as farming or ranching. (B) Eligible zoning compliance The zoning
      compliance must be either legal or legal non-conforming. A 1-unit property with
      an ADU that has illegal zoning compliance may be eligible if the requirements
      of Section 5601.2 are met. A 2- or 3-unit property with an ADU must have legal
      or legal non-conforming zoning compliance. A 4-unit property with an ADU is
      not eligible. Mortgaged Premises in jurisdictions with no zoning are acceptable
      security for Mortgages delivered to Freddie Mac. For Mortgaged Premises with
      a land use that is legal non-conforming, the appraisal report must reflect any
      adverse effect the non-conforming use has on the opinion of market value. A
      Mortgage is ineligible for sale to Freddie Mac if the Mortgage is secured by
      property that is subject to coastal tideland, wetland or setback laws or regulations
      that Freddie Mac Single-Family Seller/Servicer Guide Chapter 5605 As of 02/04/26
      Page 5605-11 prevent the rebuilding or maintenance of the property improvements
      if they are damaged or destroyed. (ii) Highest and best use For the Mortgage
      to be eligible for sale to Freddie Mac, the highest and best use of the subject
      property as improved (or as proposed per plans and specifications) must be the
      present use. (iii) Utilities The appraisal report must describe the utilities
      permanently connected to the site and the impact to value and marketability.
      The utilities serving the subject property must meet community standards. The
      comparable sales should have utilities similar to the subject property. When
      differences in utilities exist between the subject property and the comparable
      sales, any adjustments or lack of adjustments made to the comparable sales for
      significant differences must be explained in the comments area or on an attached
      addendum. (iv) Streets The subject property must have legal ingress and egress
      by streets constructed and maintained in a manner that meets community standards.
      Refer to Section 4702.4(e) for requirements related to access provided by a
      private road, joint-driveway or easement. The appraisal report should contain
      comparable sales with street access, ownership, maintenance and materials similar
      to the subject property. When differences in street access, ownership, maintenance
      or materials exist between the subject property and a comparable sale, the appraisal
      report must include justification and support for the adjustments, or lack of
      adjustments, made to the comparable sale. The appraisal report should include
      an explanation of the effect these differences have on the subject property’s
      value or marketability. (v) Site size Freddie Mac does not limit Mortgage purchases
      based on the size of the subject property site. The appraisal report must identify
      the total area of the site. The appraisal report should include comparable sales
      with similar site sizes. When differences in site size exist between the subject
      property and the comparable sales, the appraisal report must include an explanation
      in the comments area of the appraisal report or on an attached addendum for
      any adjustments or lack of adjustments made for significant differences in site
      size between the subject property and the Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5605 As of 02/04/26 Page 5605-12 comparable sales and the effect
      these differences have on the subject property’s value or marketability. (vi)
      Flood hazard area The flood hazard section of the appraisal report is not required
      to be completed if the flood zone is determined by another party, such as a
      non-appraiser on the staff of the Seller, a surveyor or a specialized flood
      zone determination company. If the property is in a “Special Flood Hazard Area”
      as identified by the Federal Emergency Management Agency through the National
      Flood Insurance Program, the appraisal report must describe any impacts this
      has on the subject property’s value or marketability. See Section 4703.3 for
      flood zone determination and flood insurance requirements. (b) Environmental
      issues and detrimental conditions (i) Impact of Contaminated Sites, Hazardous
      Substances and other adverse conditions If the Seller knows of the existence
      of a Contaminated Site in the Neighborhood where the property is located, it
      must inform the appraiser of the Contaminated Site when ordering the appraisal.
      The appraisal report must identify any known environmental issues, such as Contaminated
      Sites, Hazardous Substances or other adverse conditions, that affect the property
      or the Neighborhood in which the property is located. The appraisal report must
      include adjustments to reflect any impact on market value and commentary on
      any effect to the marketability of the subject property. Examples of conditions
      that require analysis and commentary include, but are not limited to: ■ Presence
      of asbestos, urea-formaldehyde or any similar insulation in the dwelling ■ Proximity
      of the subject property to: ❑ A Contaminated Site ❑ Ground water contamination,
      chemical or petroleum spills or other Hazardous Substances that are expected
      to impact the area for more than one year ❑ Areas that may affect the value
      or marketability of the subject property, including, but not limited to: Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5605 As of 02/04/26 Page 5605-13
      ■ Industrial sites ■ Waste or water treatment facilities ■ Commercial establishments
      (other than retail establishments that serve the Neighborhood) ■ Airport approach
      paths ■ Floodplains ■ Landslide areas (ii) Detrimental conditions The appraisal
      report must identify the presence of detrimental conditions, such as expansive
      soils, underground mines or subsidence, in the immediate area or on the subject
      property site. If the detrimental condition(s) is located on the subject property
      site, the appraisal report must be made “subject to” an inspection by an appropriately
      licensed professional or another person trained in the particular field of concern
      to determine if a repair or alteration is required. The appraiser must consider
      the effect the condition(s) may have on estimating the subject property’s market
      value and marketability. For any appraisal report that is made subject to an
      inspection(s) due to a detrimental condition(s), the Seller must include in
      the Mortgage file evidence of repair, alteration or an inspection report indicates
      the condition does not require or alteration. (See Section 5605.8 for additional
      information related to appraisal reports completed “subject to” and inspection.)
      5605.4: Site (Future effective date 11/02/26) This section contains requirements
      related to: ■ Site characteristics ■ Environmental issues and detrimental conditions
      ■ Utilities ■ Hazard zones Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5605 As of 02/04/26 Page 5605-14 ■ Property restrictions (a) Site characteristics
      The “Site” section of the appraisal report must accurately describe the characteristics
      of the site, such as size, number of parcels, property access, site influences,
      view, site features, and utilities. The appraisal report must identify any impact
      the site features or view have on the value and marketability of the subject
      property. (i) Site size and parcels Freddie Mac does not limit Mortgage purchases
      based on the size of the subject property site. The appraisal report must identify
      the total area of the site. If the Mortgaged Premises is situated on more than
      one parcel, the appraisal report must identify whether the parcels have at least
      one common boundary or an object or element separates the parcels. When the
      Mortgaged Premises is situated on two or more parcels: ■ The parcels must be
      adjoining. Exception: Parcels that would otherwise be adjoined but are separated
      by a road (e.g., a waterfront property where the parcel without the residence
      offers access to the water) are eligible if the parcel without the residence
      is non-buildable (but may include non-residential improvements such as a garage
      or dock) and the Mortgage file contains evidence that the parcel without the
      residence cannot be improved with a dwelling. ■ The Mortgaged Premises must
      contain only one residence. (An ADU is allowed on the parcel that contains the
      residence if the eligibility requirements of Section 5601.2 are met.) ■ The
      Mortgage must be a valid First Lien on each parcel ■ Each parcel must have the
      same basic zoning (e.g., residential, agricultural) ■ Each parcel must be conveyed
      in its entirety ■ The site description must accurately describe the land and
      any improvements included on each parcel ■ The residence or improvements may
      be situated across lot lines ■ Non-residential improvements (e.g., garages,
      outbuildings) are acceptable on any parcel Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5605 As of 02/04/26 Page 5605-15 (ii) Zoning The appraisal report
      must accurately describe: ■ The zoning classification code as defined by the
      local governing authority (e.g., R-1, R-2) ■ A description of the zoning classification
      code and the details of the classification code as used and defined by the local
      governing authority (e.g., residential single- family dwellings on 1-acre lots,
      residential 2-4 family dwellings) ■ The level of compliance of the site or improvements
      with zoning regulations. Acceptable responses include: ❑ Legal use ❑ Legal non-conforming
      use (any illegal use that is grandfathered or allowed by special exception)
      ❑ Illegal use ❑ There is no zoning (A) Eligible zoning classification Freddie
      Mac does not limit Mortgage purchases to Mortgages secured by properties with
      specific zoning classifications; however, the Mortgaged Premises zoning classification
      is an important characteristic the Seller must consider when determining whether
      the Mortgage is eligible for sale to Freddie Mac. Example: If a property is
      zoned for agricultural use, the Seller must ensure the property is residential
      in nature, its residential use is a permissible use under the zoning classification
      and its use does not primarily involve commercial activities such as farming
      or ranching. (B) Eligible zoning compliance The zoning compliance must be either
      legal or legal non-conforming. A 1-unit property with an ADU that has illegal
      zoning compliance may be eligible if the requirements of Section 5601.2 are
      met. A 2- or 3-unit property with an ADU must have legal or legal non-conforming
      zoning compliance. A 4-unit property with an ADU is not eligible. Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 5605 As of 02/04/26 Page 5605-16
      Mortgaged Premises in jurisdictions with no zoning are acceptable security for
      Mortgages delivered to Freddie Mac. For Mortgaged Premises with a land use that
      is legal non-conforming, the appraisal report must reflect any adverse effect
      the non-conforming use has on the opinion of market value. A Mortgage is ineligible
      for sale to Freddie Mac if the Mortgage is secured by property that is subject
      to coastal tideland, wetland or setback laws or regulations that prevent the
      rebuilding or maintenance of the property improvements if they are damaged or
      destroyed. (iii)Property access The Mortgaged Premises must have legal ingress
      and egress by streets constructed and maintained in a manner that meets community
      standards. Refer to Section 4702.4(e) for requirements related to access provided
      by a private road, joint-driveway or easement. The appraisal report should contain
      comparable sales with street access, ownership, maintenance and materials similar
      to the subject property. (b) Environmental issues and detrimental conditions
      (i) Impact of Contaminated Sites, Hazardous Substances and other adverse conditions
      If the Seller knows of the existence of a Contaminated Site in the Neighborhood,
      the Seller must inform the appraiser of the Contaminated Site when ordering
      the appraisal. The appraisal report must identify any known environmental issues,
      such as Contaminated Sites, Hazardous Substances or other adverse conditions,
      that affect the subject property or are within the vicinity of the property.
      The appraisal report must include adjustments to reflect any impact on market
      value and commentary on any effect to the marketability of the subject property.
      Examples of conditions that require analysis and commentary include, but are
      not limited to: ■ Hazardous Above Ground Storage Tank ■ Hazardous Substances
      ■ Landfill ■ Radon Freddie Mac Single-Family Seller/Servicer Guide Chapter 5605
      As of 02/04/26 Page 5605-17 ■ Slush Pit ■ Soil Contamination ■ Superfund Site
      ■ Underground Storage Tank ■ Water Contamination (ii) Detrimental conditions
      The appraisal report must identify the presence of detrimental conditions, such
      as expansive soils, underground mines or subsidence, in the immediate area or
      on the subject property site. If the detrimental condition(s) is located on
      the subject property site, the appraisal report must be made “subject to” an
      inspection by an appropriately licensed professional or another person trained
      in the particular field of concern to determine if a repair or alteration is
      required. The appraiser must consider the effect the condition(s) may have on
      the subject property’s market value and marketability. For any appraisal report
      that is made subject to an inspection(s) due to a detrimental condition(s),
      the Seller must include in the Mortgage file evidence of repair, alteration
      or an inspection report indicates the condition does not require or alteration.
      (See Section 5605.9 for additional information related to appraisal reports
      completed “subject to” and inspection.) (c) Utilities The appraisal report must
      describe the utilities that are permanently connected to the site and the impact
      of the utilities on the value and marketability of the subject property. The
      utilities that serve the subject property must meet community standards. The
      comparable sales should have utilities that are similar to the subject property’s
      utilities. When differences exist between the utilities that serve subject property
      and those that serve the comparable sales, any adjustments or lack of adjustments
      to the comparable sales must be explained in the appraisal report. (d) Hazard
      zones If the subject property is in a hazard zone (i.e., flood zone, lava zone),
      the appraiser must include that information in the appraisal report. Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5605 As of 02/04/26 Page 5605-18
      If the flood zone determination is made by another party other than the appraiser,
      such as a non-appraiser on the staff of the Seller, a surveyor or a specialized
      flood zone determination company, the flood hazard section of the appraisal
      report is not required to be completed. If the property is in a “Special Flood
      Hazard Area” (SFHA) as identified by the Federal Emergency Management Agency
      (FEMA) through the National Flood Insurance Program (NFIP), the appraisal report
      must describe any impacts of the SFHA on the subject property’s value or marketability.
      See Section 4703.3 for flood zone determination and flood insurance requirements.
      (e) Property restrictions The appraisal report must identify any property restrictions
      or encumbrances that affect the subject property and identify the impact of
      such restrictions or encumbrances on the subject property including commentary
      describing any impact to the subject property’s value or marketability.'
  judgment: false
