source:
  type: guide
  id: fhlmc-8405.1
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 8405.1 — 12-month
    occupancy waiver request
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 8405.1 — 12-month
    occupancy waiver request.
  coverage_tier: operative
obligations:
- id: fhlmc-8405.1-full
  canonical_id: fhlmc-8405.1-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 8405.1 — 12-month
    occupancy waiver request
  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 8405.1 — 12-month
      occupancy waiver request
    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: '8405.1: 12-month occupancy waiver request (07/09/25) For Mortgages
      secured by a Borrower’s Primary Residence or a second home, the Fannie Mae/Freddie
      Mac Single-Family Uniform Security Instrument and the Second Home Rider provides
      that a Borrower, except as otherwise permitted by the instrument, must occupy
      the Mortgaged Premises within 60 days of executing the Security Instrument,
      or as applicable, occupy and use the property as the Borrower’s second home,
      and continue to occupy the Mortgaged Premises, or as applicable, keep the Property
      available primarily as a residence for Borrower’s personal use and enjoyment,
      for at least one year after the date of occupancy or as applicable the date
      of the Second Home Rider. When Freddie Mac approval is required, the Servicer
      must document the Borrower’s request and forward a recommendation to Freddie
      Mac via e-mail to ShortSales@FreddieMac.com. Freddie Mac will review the request,
      supporting documentation and the Servicer’s recommendation and notify the Servicer
      of its approval or denial of the request. The Servicer must maintain the Borrower’s
      request, supporting documentation, if applicable, and Freddie Mac’s decision
      in the Mortgage file. Freddie Mac Single-Family Seller/Servicer Guide Chapter
      8406 As of 12/17/25 Page 8406-1 Chapter 8406: Transfers of Ownership and Assumptions
      8406.1: General policy and federal regulation on Transfers of Ownership and
      assumptions (09/10/25) This section contains requirements related to: ■ General
      policy on Transfers of Ownership and assumptions ■ Transfers of Ownership and
      assumptions of Mortgages insured by the FHA or guaranteed by the VA or RHS ■
      Federal restrictions on the exercise of the due-on-transfer clause ■ Additional
      permitted Transfers of Ownership (a) General policy on Transfers of Ownership
      and assumptions (i) General policy on Transfers of Ownership Ownership of the
      Mortgaged Premises securing a Mortgage that does not contain a due- on-transfer
      clause can be transferred without restriction. However, the Servicer must accelerate
      the maturity of a Mortgage that contains a due-on-sale or due-on-transfer clause
      when a Transfer of Ownership occurs, unless acceleration is prohibited by provisions
      of Section 8406.1(c) or 8406.1(d) or applicable law. References in the Guide
      to “due-on-transfer clause” includes “due-on-sale clauses” and similar provisions
      in the Mortgage documents that require acceleration upon a Transfer of Ownership.
      Servicers should review the definition of Transfer of Ownership in the Glossary
      for a list of impacted transactions. Servicers are reminded that when a Transfer
      of Ownership occurs that involves a modified Mortgage, they must review the
      modification documents in addition to the Note and Security Instrument to determine
      if a due-on-transfer clause has been triggered. In accordance with Section 9206.2(c),
      such clauses must be included in a modified Mortgage. Upon learning of a Transfer
      of Ownership that is subject to acceleration under the terms of this chapter,
      the Servicer must accelerate the debt and initiate appropriate foreclosure action
      in accordance with applicable law, the terms of the Security Instrument and
      Chapter 9301. No penalty may be charged for a prepayment resulting from such
      acceleration. (ii) General policy on assumptions of delinquent Mortgages Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 8406 As of 12/17/25 Page 8406-2
      It may be in the best interest of Freddie Mac to permit an assumption of a delinquent
      Mortgage by a creditworthy applicant, even if the Mortgage contains a due-on-transfer
      clause. Freddie Mac approval is necessary to approve or decline any request
      to assume a delinquent Mortgage. In these instances, refer to Section 9207.1
      for workout Mortgage assumption requirements and contact Freddie Mac (see Directory
      5) to determine whether a workout Mortgage assumption is an appropriate alternative
      to foreclosure. (iii) Change in Note Rate requirements Freddie Mac will not
      permit a change in the Note Rate upon a Transfer of Ownership of the Mortgaged
      Premises, except in connection with a simultaneous assumption and modification
      that meets the requirements set forth in Section 9207.1(b). A Servicer that
      intends to modify the Note Rate without meeting the requirements of Section
      9207.1(b) must first repurchase Freddie Mac’s interest in the Mortgage in accordance
      with Chapter 3602. (b) Transfers of Ownership and assumptions of Mortgages insured
      by the FHA or guaranteed by the VA or RHS The Mortgaged Premises securing Mortgages
      insured by the FHA or guaranteed by the VA or RHS may be transferred in accordance
      with applicable FHA, VA or RHS regulations. The Servicer must comply with all
      applicable FHA, VA or RHS requirements to ensure that the FHA insurance, or
      VA or RHS guaranty is maintained and must provide all notices and disclosures
      required under the Equal Credit Opportunity Act, Truth in Lending Act and any
      other applicable law or regulation. Freddie Mac need not be notified of any
      change of ownership allowed by the FHA, VA or RHS, but the Servicer must ensure
      that all insurance and guaranty documents reflect the change. When prior FHA,
      VA or RHS approval is required and such approval is not granted, the Servicer
      must provide an adverse action notice to all applicable parties, in addition
      to any other notice or disclosure required under the Equal Credit Opportunity
      Act, Fair Credit Reporting Act, Truth in Lending Act and any other applicable
      law or regulation. The application for assumption of a Mortgage insured by the
      FHA or guaranteed by the VA or RHS is not complete until the Servicer receives
      the following: 1. The completed application for approval of a loan assumption
      2. An executed copy of the contract of sale or other document reflecting the
      Transfer of Ownership (e.g., quitclaim deed) Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8406 As of 12/17/25 Page 8406-3 3. With regard to (a) the continuation
      of the mortgage insurance provided by the FHA, the Mortgage guaranty provided
      by the VA or the Mortgage guaranty provided by the RHS, as applicable, and (b)
      the release of the prior Borrower of liability, when applicable, written approval
      from: ■ The FHA for Mortgages insured by the FHA ■ The VA for Mortgages guaranteed
      by the VA ■ The RHS for Mortgages insured by the RHS; and 4. All other information
      the FHA, VA or RHS, as applicable, may require (c) Federal restrictions on the
      exercise of the due-on-transfer clause For the following Transfers of Ownership,
      when the Mortgaged Premises is either occupied or to be occupied by the Borrower,
      the Servicer may not accelerate the maturity of the indebtedness: ■ The creation
      of a lien or other encumbrance subordinate to the lender’s Security Instrument,
      which does not relate to a transfer of rights of occupancy in the Mortgaged
      Premises, provided that the lien or encumbrance is not created pursuant to a
      contract for deed ■ The creation of a purchase-money security interest for household
      appliances ■ A transfer by devise, descent or operation of law on the death
      of a joint tenant or tenant by the entirety ■ The granting of a leasehold interest
      with a term of three years or less and without an option to purchase ■ A transfer
      in which the transferee occupies or will occupy the Mortgaged Premises and that
      is one of the following: ❑ A transfer to a relative, resulting from the Borrower’s
      death Note: In the case of a Borrower’s death, the occupancy requirement may
      be waived. The Servicer should submit the waiver recommendation to Freddie Mac
      (see Directory 5) for approval. ❑ A transfer wherein the spouse, domestic partner
      or a child of the transferor becomes an owner of the Mortgaged Premises ❑ A
      transfer resulting from a decree of dissolution of a marriage or domestic partnership,
      a legal separation agreement or from an incidental property settlement Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 8406 As of 12/17/25 Page 8406-4
      agreement by which the spouse or domestic partner becomes an owner of the Mortgaged
      Premises ■ A transfer into an inter vivo trust in which the Borrower is and
      remains the beneficiary and occupant of the Mortgaged Premises unless, as a
      condition precedent to such a transfer, the Borrower refuses to provide the
      Servicer with reasonable means acceptable to the Servicer by which the Servicer
      will be assured of timely notice of any subsequent transfer of the beneficial
      interest or change in occupancy ■ Any other transfer or disposition described
      in regulations of the Federal Home Loan Bank Board as a basis on which due-on-transfer
      clauses may not be exercised Except for the waiver of occupancy requirements
      for transferees as described above, Servicers may not evaluate the creditworthiness
      of a transferee, require a transferee to assume the Mortgage or otherwise require
      the Servicer’s or Freddie Mac’s approval for any of the Transfers of Ownership
      types listed in this section. If the transferee requests to assume the Mortgage
      and/or the transferor requests to be released from liability, then the Servicer
      must determine the creditworthiness of the transferee in accordance with the
      requirements in Sections 8406.2(a) and 8406.2(b). (d) Additional permitted Transfers
      of Ownership (i) Unrestricted Transfers of Ownership In addition to the federal
      restrictions on the exercise of the due-on-transfer clause provided in Section
      8406.1(c), Freddie Mac will not, and the Servicer may not, restrict a Transfer
      of Ownership of the Mortgaged Premises in the following situations: ■ The Security
      Instrument does not contain a due-on-transfer clause ■ The Security Instrument
      contains an unenforceable due-on-transfer clause ■ The title is acquired by
      the junior lienholder (that is an institutional counterparty) as the result
      of a foreclosure or acceptance of a deed-in-lieu of foreclosure of the junior
      lien. However, Freddie Mac will require acceleration of the indebtedness if
      the title is further transferred after acquisition by the junior lienholder;
      or ■ The title to the leasehold estate and the improvements are acquired by
      the fee simple landowner/lessor as the result of the Borrower being evicted
      from the leasehold estate by court order. However, Freddie Mac will require
      acceleration of the indebtedness if the title is further transferred to a new
      lessee after acquisition by the lessor. In connection with any Transfer of Ownership
      listed in this Section 8406.1(d)(i), a Servicer may not evaluate the creditworthiness
      of a transferee, require a transferee to assume the Mortgage, or otherwise require
      the Servicer’s or Freddie Mac’s approval of Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8406 As of 12/17/25 Page 8406-5 the transfer. However, if the
      transferee requests to assume the Mortgage and/or the transferor requests to
      be released of liability, the Servicer must determine the creditworthiness of
      the transferee, either manually or by using Loan Product Advisor®. Note: Refer
      to Sections 8406.2(a) and 8406.2(b) for additional information on Transfers
      of Ownership. (ii) Permitted Transfers of Ownership In situations where all
      of the following conditions are met, Freddie Mac will permit a Transfer of Ownership
      of the Mortgaged Premises: ■ At least 12 months have passed since the Origination
      Date ■ The Servicer has complied with all mortgage insurance requirements applicable
      to the transfer ■ Either: ❑ The transfer is to a transferee who occupies or
      will occupy the Mortgaged Premises as a Primary Residence and is: ■ A parent
      or child of the transferor ■ A grandparent or grandchild of the transferor ■
      A brother or sister of the transferor, or ■ An original co-Borrower of the transferor
      under the Note, whether or not related to the transferor ❑ The transfer is to
      a limited liability company (LLC) or limited partnership (LP), provided that:
      ■ The managing member/general partner of the LLC/LP is the original Borrower.
      If there are multiple Borrowers, all of them must be members/partners of the
      LLC/LP, and at least one of them must be a managing member/general partner.
      If the transfer results in a permitted change of occupancy type to an investment
      property, such change must not violate the Security Instrument (e.g., the 12-month
      occupancy requirement for a Primary Residence), and ■ The Servicer notifies
      the original owner or natural person that the Mortgaged Premises transferred
      to an LLC/LP must be transferred back to the original owner or natural person
      prior to any subsequent refinance or modification application to meet Freddie
      Mac’s underwriting requirements Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 8406 As of 12/17/25 Page 8406-6 ❑ The Mortgage is a HeritageOne® Mortgage,
      and the transfer is to the Eligible Native American Tribe (as defined in Section
      4504.2(c)) within whose Tribal Area the Mortgaged Premises are located if, after
      acquisition, the Eligible Native American Tribe further transfers or will transfer
      the title to a transferee who occupies or will occupy the Mortgaged Premises
      as a Primary Residence, and at least one transferee is also an enrolled member
      of a Native American Tribe (as defined in Section 8901.1(a)) In connection with
      any Transfer of Ownership that meets the conditions of this Section 8406.1(d)(ii),
      a Servicer may not evaluate the creditworthiness of a transferee, require a
      transferee to assume the Mortgage or otherwise require the Servicer’s or Freddie
      Mac’s approval of the transfer. However, if the transferee requests to assume
      the Mortgage and/or the transferor requests to be released of liability, the
      Servicer must determine the creditworthiness of the transferee, either manually
      or by using Loan Product Advisor. Refer to Sections 8406.2(a) and 8406.2(b)
      for additional information. (iii) Transfers of Ownership that require a determination
      of creditworthiness In the following situations, the Servicer must determine
      the creditworthiness of the transferee, even if the transferee is not assuming
      the Mortgage, and process the Transfer of Ownership in accordance with Sections
      8406.2(a) through 8406.3(b): ■ The Security Instrument contains a due-on-transfer
      clause that does not allow unrestricted or automatic acceleration of the indebtedness
      upon transfer of the Mortgaged Premises to a creditworthy transferee, or ■ The
      title is acquired by the junior lienholder (that is not an institutional counterparty)
      as the result of a foreclosure or acceptance of a deed-in-lieu of foreclosure
      of the junior lien. However, Freddie Mac will require acceleration of the indebtedness
      if the title is further transferred after acquisition by the junior lienholder.
      (iv) Assumptions, releases of liability and determination of creditworthiness
      If the transferee requests an assumption of the Mortgage obligation as part
      of a Transfer of Ownership, the Servicer must determine the creditworthiness
      of the transferee in accordance with the manual underwriting requirements in
      Topics 5100 through 5500. The Servicer must prepare a written assumption agreement
      that must be executed by all parties concerned as required in Section 8406.2(c).
      In addition, if the transferor requests to be released of liability, once the
      Servicer has determined the creditworthiness of the transferee, the Servicer
      must require a written assumption and release of liability agreement, which
      then must be executed by all parties concerned in accordance with Section 8406.2(c).
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 8406 As of 12/17/25
      Page 8406-7 Servicers must accelerate the Note if title is further transferred
      by the transferee to someone who is not an eligible transferee under Sections
      8406.1(c) or 8406.1(d). 8406.2: Eligibility and application for approval of
      Transfers of Ownership, assumptions and releases of liability (12/17/25) This
      section contains requirements related to: ■ Application for approval of Transfers
      of Ownership, assumptions and releases of liability ■ Determining eligibility
      for Transfers of Ownership, assumptions and releases of liability ■ Approval
      of the application for Transfers of Ownership ■ Adverse action notice requirements
      for declined Mortgage assumption (a) Application for approval of Transfers of
      Ownership, assumptions and releases of liability For Transfers of Ownership
      that require the Servicer to first determine the creditworthiness of the transferee,
      and for all assumptions and releases of liability, the Servicer must obtain
      the following: ■ Form 65, Uniform Residential Loan Application, completed and
      executed by the transferee ■ A copy of the executed contract of sale or other
      document reflecting the Transfer of Ownership (e.g., quitclaim deed) ■ A current
      credit report for the transferee, as described in Section 5203.1 ■ Income documentation
      and asset documentation for the transferee as required by Topics 5100 through
      5500 ■ In accordance with requirements in Chapters 5302 through 5307 and Chapter
      5501 for standard documentation ❑ Written verification of the transferee’s current
      employment and income from a reliable source and ❑ Verification or other acceptable
      evidence of the source and amount of funds for the Down Payment and payment
      of prepaid items, as reported in the application Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8406 As of 12/17/25 Page 8406-8 Note: Refer to Section 8406.2(b)
      for underwriting requirements to determine whether a transferee is creditworthy.
      The Servicer must comply with the Equal Credit Opportunity Act, Fair Credit
      Reporting Act, Truth in Lending Act and any other applicable law or regulation.
      Note: See also Section 1301.2 for additional compliance requirements. The Servicer
      must also notify the transferee of the decision on the application within 25
      days after the Servicer receives all information that constitutes a completed
      application. (b) Determining eligibility for Transfers of Ownership, assumptions
      and releases of liability (i) Manually reviewing transferee eligibility When
      required to determine the creditworthiness of a transferee for assumptions and
      releases of liability, and when manually underwriting a Transfer of Ownership
      following the requirements of Section 8406.1(d), the Servicer must review the
      application to ensure compliance with Freddie Mac’s credit underwriting guidelines
      in Topics 5100 through 5500 including, but not limited to, income and employment,
      source of funds for Down Payment and Closing Costs and credit history. The Servicer’s
      analysis must be documented on Form 1077, Uniform Underwriting and Transmittal
      Summary, or on another document in the Mortgage file. (ii) Use of Loan Product
      Advisor® to assess creditworthiness for Transfers of Ownership and Mortgage
      assumptions For Mortgage assumptions that require the Servicer to first determine
      the creditworthiness of the transferee as described in Section 8406.1(d)(iv),
      Servicers may use Loan Product Advisor to assess the creditworthiness of the
      transferee(s) as described in this section. This functionality is permitted
      only for transferees who request an assumption of the Mortgage obligation as
      part of a Transfer of Ownership and must only be used to assess creditworthiness
      of the transferee. All other Guide requirements regarding Transfers of Ownership
      and Mortgage assumptions remain in effect. Servicers that opt to use Loan Product
      Advisor to assess a transferee’s creditworthiness to process assumptions in
      Loan Product Advisor must use the “no cash-out” refinance option and the “Assumption
      FRE Owned Loan” Loan Program Identifier. Loan Product Advisor uses the Mortgage’s
      original value to assess the transferee’s creditworthiness; therefore, Servicers
      have the flexibility to manually underwrite an assumption for any reason, including
      if the transferee requests use of the Mortgage’s current value with a BPO obtained
      via BPODirect. If the Feedback Certificate returned from the Servicer’s last
      submission to Loan Product Advisor prior to the Servicer’s assumption determination
      (the Last Assumption Feedback Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 8406 As of 12/17/25 Page 8406-9 Certificate) returns a Feedback Certificate
      with a Risk Class of “Accept”, the Servicer is not required to manually underwrite
      the assumption of the Mortgage in accordance with the requirements in Topics
      5100 through 5500. To move forward with the assumption, the Servicer must follow
      the steps in Sections 8406.2(c) through 8406.3(b), as applicable, to complete
      the assumption and must maintain the Last Assumption Feedback Certificate in
      the Mortgage file. If Loan Product Advisor returns a Feedback Certificate with
      a Risk Class of “Caution”, the Servicer may manually underwrite the assumption
      of the Mortgage in accordance with the requirements in Topics 5100 through 5500.
      If the Servicer ultimately declines the assumption application, the Servicer
      must follow the requirements in Section 8406.2(d) to notify all affected parties.
      Loan Product Advisor may be used to assess the creditworthiness of transferees
      who want to assume a Mortgage with a previous Payment Deferral; however, it
      may not be used to assess the creditworthiness of transferees who want to assume
      a Mortgage that has been previously modified. Modified Mortgages are eligible
      to be assumed, but they must be manually underwritten using the manual underwriting
      requirements in Topics 5100 through 5500. (iii) Optional use of Loan Product
      Advisor Servicers may continue to process Mortgage assumptions manually if they
      choose to do so or at the request of the transferee. The following requirements
      must be met for all assumptions, when applicable: 1. The transferee must be
      determined to be creditworthy in accordance with Section 5102.2(b) and: ■ The
      assumption is manually underwritten, or ■ If Loan Product Advisor was used to
      assess Transferee creditworthiness, the assumption is one for which Borrower
      creditworthiness is permitted to be assessed through Loan Product Advisor and
      the Last Assumption Feedback Certificate includes a Risk Class of Accept 2.
      A written assumption and release of liability agreement must be executed by
      all parties concerned in accordance with Section 8406.2(c) Note: Freddie Mac
      will require acceleration of the indebtedness if title is further transferred
      by the transferee to someone who is not an eligible transferee under Section
      8406.1(c) or 8406.1(d). 3. If the Mortgage is being assumed, the transferee
      must pay at least 5% of the sale price in addition to all adjustments (e.g.,
      for property taxes, and property and mortgage Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8406 As of 12/17/25 Page 8406-10 insurance premiums) from cash
      or other equity as defined in Chapter 5501. (Note: The transferee is not required
      to pay 5% for those Transfers of Ownership protected by federal restrictions
      on exercise of the due-on-transfer clause as set forth in Section 8406.1(c)
      or for those Transfers of Ownership permitted under Sections 8406.1(d)(i) and
      8406.1(d)(ii), even if, in those cases, the transferee is also assuming the
      Mortgage.) 4. There must be no changes in the terms of the Security Instrument
      and the Note other than a change to the name of the transferee, any release
      and subsequent assumption of personal liability, where applicable, and any change
      allowed in Section 8103.3(d) 5. Mortgage insurance coverage must be maintained,
      if applicable If the Mortgaged Premises to be transferred secures a Mortgage
      that is covered by a buydown agreement, the Servicer must underwrite the transferee
      according to the qualification requirements provided in Section 4204.3. See
      Section 8406.3(d) for additional information. (c) Approval of the application
      for Transfers of Ownership The Servicer must approve the Transfer of Ownership
      if, based on its eligibility review in accordance with Section 8406.2(b), it
      reasonably determines that the security interest in the Mortgaged Premises will
      not be impaired by this transfer. The Servicer is not required to notify Freddie
      Mac of the Transfer of Ownership permitted under Sections 8406.1(c) and 8406.1(d),
      provided the Mortgage is not assumed by the transferee or the transferor is
      not being released of liability, unless it becomes necessary later to communicate
      with Freddie Mac concerning this Mortgage. The Servicer must prepare the necessary
      documents and have them executed by all parties concerned. In addition, if the
      transferor requests to be released of liability under the Note and Security
      Instrument, a written assumption and release of liability agreement must be
      executed. If State law requires Freddie Mac to execute the documents, the Servicer
      warrants that: ■ The documents reflect terms that are consistent with the requirements
      of this chapter ■ All statements set forth in the documents are accurate, and
      ■ The documents comply with all applicable State and local requirements The
      Servicer must: ■ Deliver the original executed assumption agreement and, as
      applicable, release of liability agreement, to the Document Custodian; and copies
      to all other parties concerned Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 8406 As of 12/17/25 Page 8406-11 Note: Per Section 1402.5(b)(ii), the
      Servicer must update the MERS® eRegistry (as defined in Section 1402.1(b)) to
      provide notice of the assumption agreement upon an assumption (with or without
      a release of liability) of an eMortgage (as defined in Section 1402.1(b)) ■
      Retain a copy of the executed assumption agreement and, as applicable, release
      of liability agreement, in the Mortgage file ■ Arrange for any recordation commonly
      required by private institutional Mortgage investors or required by law to ensure
      the priority of the existing lien and assess any related costs to the transferee
      ■ Provide all notices and disclosures required under the Equal Credit Opportunity
      Act, Fair Credit Reporting Act, Truth in Lending Act and any other applicable
      law or regulation (see also Section 1301.2 for additional compliance requirements)
      ■ Ensure that all insurance policies reflect the change of ownership and take
      any action necessary to continue any required insurance coverage including,
      mortgage insurance, where applicable ■ Document transferee information in the
      Freddie Mac Post-Fund Data Correction tool (see Exhibit 88, Servicing Tools).
      Servicer must submit copies of the settlement statement and assumption agreement
      in accordance with instructions for use of the tool. If Servicer needs to submit
      more than one request to change information, Servicer may import the Post-Fund
      Data Correction Form excel spreadsheet (DCR Form) found on the Post-Fund Data
      Correction tool webpage (https://sf.freddiemac.com/tools-learning/technology-
      tools/our-solutions/post-fund-data-correction) into the Post-Fund Data Correction
      tool, in accordance with the spreadsheet instructions. ■ For Cooperative Share
      Loans, comply with the requirements in Section 8801.3(a) When applicable, the
      Servicer may cancel mortgage insurance following the Transfer of Ownership of
      the Mortgaged Premises in accordance with Sections 8203.2 through 8203.4(a).
      If the Servicer is unable to approve the Transfer of Ownership or assumption
      following Guide requirements and believes that approval is in the Borrower’s
      and Freddie Mac’s best interest, the Servicer must send the request for approval
      to ShortSales@FreddieMac.com. (d) Adverse action notice requirements for declined
      Mortgage assumption If the application for a Mortgage assumption is declined,
      the Servicer must provide an adverse action notice to all applicable parties,
      or any other notice or disclosure required under the Equal Credit Opportunity
      Act, Fair Credit Reporting Act, Truth in Lending Act and any other applicable
      federal, State or local law. Freddie Mac must not be identified as a Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 8406 As of 12/17/25 Page 8406-12
      creditor in any notice or disclosure that may be required, as Freddie Mac is
      not participating in the decision on the application. 8406.3: File retention,
      fees and special provisions for Transfers of Ownership and assumptions (09/10/25)
      This section contains information related to: ■ File retention for Transfers
      of Ownership and assumptions ■ Transfer of Ownership fees ■ Assumability provisions
      and rate cap requirements for ARMs ■ Transfers of Ownership and buydown accounts
      (a) File retention for Transfers of Ownership and assumptions All original documents
      relating to the application for a Transfer of Ownership must be kept in the
      Mortgage file, including the Last Assumption Feedback Certificate, as defined
      in Section 8406.2(b), if Loan Product Advisor® was used to assess Transferee
      creditworthiness. If the application is approved, the documentation must be
      maintained in the Mortgage file for at least seven years from the date that
      Freddie Mac’s interest in the Mortgage is satisfied. If the application is declined,
      the documentation must be kept for the duration required under the Equal Credit
      Opportunity Act, Fair Credit Reporting Act or any other applicable law or regulation.
      Copies of documents may be scanned and stored as: ■ Portable Document Format
      (PDF) ■ Tagged Image File (TIF) format ■ Joint Photograph Experts Group (JPEG)
      format; or ■ Other electronic document formats commonly used by the Mortgage
      industry in the regular course of business Note: Refer to Chapter 3302 for Mortgage
      file retention requirements including those requirements regarding documents
      for which the paper originals must be maintained. (b) Transfer of Ownership
      fees Freddie Mac Single-Family Seller/Servicer Guide Chapter 8406 As of 12/17/25
      Page 8406-13 The Servicer may charge and retain a fee for processing a Transfer
      of Ownership of, or an interest in, the Mortgaged Premises securing a Mortgage
      purchased by Freddie Mac as permitted by applicable law. Where applicable law
      or regulation limits the amount of the allowable fee, the Servicer may not charge
      more than the lesser of: ■ The maximum fee allowed under applicable law or regulation,
      or ■ The maximum fee allowed by Freddie Mac as stated below This fee must be
      set in accordance with the following provisions: (i) Security Instruments without
      a due-on-transfer clause The fee charged by the Servicer for changing its records
      for a Transfer of Ownership for which its consent was not required must not
      exceed $100. (ii) Security Instruments with a due-on-transfer clause When determining
      the creditworthiness of a transferee for a Transfer of Ownership, the Servicer
      may charge and retain a fee based on the following guidelines: ■ The fee may
      not exceed the greater of $400 or 1% of the UPB, capped at a maximum fee of
      $900 ■ The Transfer fee excludes out-of-pocket expenses paid to independent
      third parties for services required to comply with the application and approval
      process (per sections 8406.2(a) through 8406.2(d)) and to record the change
      of ownership ■ Any additional services requested by the transferee, such as
      surveys, owner’s title policies, etc., are the sole responsibility of the transferee
      ■ Loan discount fees, yield enhancement fees, lost opportunity fees and similar
      devices designed to circumvent these limitations or increase the effective interest
      rate or yield of the Mortgage previously sold to Freddie Mac, regardless of
      the Servicer’s retained interest in the Mortgage, are expressly prohibited The
      Servicer may implement a transfer fee schedule that results in charges less
      than those permitted by Freddie Mac. However, if any fee charged by the Servicer
      on Mortgages sold to Freddie Mac exceeds the amounts stated above, it will be
      considered a breach of this Guide and, unless refunded to the Borrower, Freddie
      Mac may exercise any remedy available under this Guide or applicable law to
      remediate the violation. (c) Assumability provisions and rate cap requirements
      for ARMs (i) Assumability provisions Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8406 As of 12/17/25 Page 8406-14 The loan instruments used to
      originate an ARM contain the provisions governing the right of the lender to
      accelerate the loan, in the event of a Transfer of Ownership. These provisions
      determine whether or not the ARM is assumable by the party to whom the Mortgaged
      Premises is transferred, and, if it is assumable, the transferee must agree
      to assume the Mortgage loan obligation. Some loan instruments provide that the
      ARM is assumable for the life of the loan. Other loan instruments provide that
      the ARM is assumable only after the initial fixed-rate period has expired or
      until a specified event has occurred and is thereafter not assumable. The Servicer
      must review the loan instruments to determine the assumption provisions for
      an ARM. Regardless of whether a loan instrument indicates that an ARM is not
      assumable, the ARM may be assumed as a workout Mortgage assumption or a simultaneous
      modification and assumption. Servicers must refer to and follow the requirements
      in Section 9207.1 for these assumptions. (ii) Rate cap requirements If the Note
      for an ARM sold to Freddie Mac does not provide for a Lifetime Ceiling, the
      following provision or substantially similar provision must be included in the
      Mortgage assumption and release of liability agreement: The interest rate I
      am required to pay after I assume this Mortgage obligation and for the entire
      term of this Mortgage will never be greater than (see note below) percent. Note:
      To determine the appropriate interest rate to insert in the preceding provision,
      the Servicer must add six percentage points to the sum of the Margin and the
      Index value in effect on the date of the Mortgage assumption and release of
      liability agreement, subject to applicable law, such as the Servicemembers Civil
      Relief Act (SCRA). Refer to Chapter 8503. (d) Transfers of ownership and buydown
      accounts Where a Transfer of Ownership is approved, any funds remaining in a
      related buydown account may continue to be used to reduce the Mortgage payments
      when: ■ The Mortgaged Premises is sold and the Mortgage is assumed by the purchaser,
      and ■ The terms of the original buydown plan allow for the continued application
      of the buydown funds if the Mortgage is assumed Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8501 As of 08/13/25 Page 8501-1 Chapter 8501: Special Requirements
      for Servicing Step-Rate Mortgages 8501.1: Servicer staff requirements related
      to Servicing Step-Rate Mortgages (07/09/25) The Servicer must employ staff,
      including phone agents for both incoming and outgoing calls, that is adequately
      trained to discuss interest rate adjustments for Step-Rate Mortgages. Phone
      agents answering incoming calls must be able to identify potential default situations
      and promptly refer Borrowers to a default management unit with the ability to
      advise on default prevention options. Phone agents making outgoing calls must
      be able to discuss step-rate adjustments when making calls to delinquent Borrowers
      in accordance with Borrower solicitation and communication requirements in Section
      9102.5. 8501.2: Communicating upcoming interest rate adjustments (07/09/25)
      This section contains requirements related to: ■ Written notice as early as
      the 150th day and no later than the 90th day prior to the first payment Due
      Date following the initial interest rate adjustment ■ Written notice as early
      as the 75th day and no later than the 60th day prior to the first payment Due
      Date following the initial interest rate adjustment ■ Written notice as early
      as the 120th day and no later than the 60th day prior to the first payment Due
      Date at each subsequent adjusted rate level The Servicer must send two separate
      written notifications to the Borrower prior to an initial interest step-rate
      adjustment on a Step-Rate Mortgage. These notifications must be sent in order
      to ensure that Borrowers are fully prepared for increases to their PITIAS Payment
      amounts and have a full understanding of when and why the payment amount will
      increase. If after the initial step-rate adjustment the Mortgage will be subject
      to subsequent interest rate adjustments, the Servicer, in accordance with Section
      8501.2(c) below, must send one notification letter prior to the payment Due
      Date associated with each subsequent adjustment. (a) Written notice as early
      as the 150th day and no later than the 90th day prior to the first payment Due
      Date following the initial interest rate adjustment Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 8501 As of 08/13/25 Page 8501-2 The Servicer must
      provide the Borrower with a written notice of the initial interest rate adjustment
      that will occur as a result of a step-rate feature on the Borrower’s Step-Rate
      Mortgage (i.e., at the end of a fixed-rate term). (b) Written notice as early
      as the 75th day and no later than the 60th day prior to the first payment Due
      Date following the initial interest rate adjustment The Servicer must provide
      the Borrower with a second written notice of the initial interest rate adjustment.
      Each written notice of an upcoming interest rate adjustment sent to the Borrower
      in accordance with the requirements in Section 8501.2(a), 8501.2(b) or 8501.2(c)
      must: ■ Provide the amount and effective date of the interest rate increase,
      and the amount and Due Date of the Borrower’s first increased monthly payment
      at the new adjusted level ■ Explain that, pursuant to the terms of the modification
      agreement, at the end of the initial fixed-rate term, the interest rate will
      increase according to the schedule in the agreement until it reaches a pre-determined
      Interest Rate Cap Note: As applicable, the Servicer must explain how the Interest
      Rate Cap was derived, and that once the interest rate reaches its cap, it will
      remain fixed for the remaining Mortgage term. ■ Explain that the monthly payment
      includes an Escrow for property taxes, hazard insurance and other escrowed expenses,
      which could also increase the monthly payment amount if those amounts are increased
      ■ Explain how the new payment is determined ■ Include a payment schedule table
      similar to the one included in the Borrower’s modification agreement, which
      outlines the future interest rates and monthly payment amounts (identifying
      principal and interest, as well as Escrows), and the effective dates for each;
      alternatively, the Servicer may explain these terms, dates and amounts ■ Include
      the Servicer’s contact information and instructions for the Borrower to contact
      the Servicer if the Borrower has any questions regarding the content of the
      notice ■ Include the Homeowners HOPE™ Hotline Number (888-995-HOPE) ■ Explain
      that free budgeting assistance from the HUD-approved housing counseling agencies
      is available via HUD.gov; and ■ Provide information regarding the availability
      of additional information on Freddie Mac’s Mortgage Help Resource Center website
      (http://myhome.freddiemac.com/) Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 8501 As of 08/13/25 Page 8501-3 (c) Written notice as early as the 120th
      day and no later than the 60th day prior to the first payment Due Date at each
      subsequent adjusted rate level Servicers must provide each Borrower with a written
      notice of each subsequent interest rate adjustment that will occur as a result
      of a step-rate feature on a Step-Rate Mortgage. 8501.3: Freddie Mac Flex Modification®
      for Step-Rate Mortgages (08/13/25) Servicers must refer to Section 9206.1(c)
      for complete requirements for a streamlined offer for a Freddie Mac Flex Modification®
      to a Borrower with a Step-Rate Mortgage. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 8502 As of 08/13/25 Page 8502-1 Chapter 8502: Special Servicing
      and Reporting Requirements for ARMs'
  judgment: false
