source:
  type: guide
  id: fhlmc-5601.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 5601.2 — Eligibility
    of a property with an ADU
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 5601.2 — Eligibility
    of a property with an ADU.
  coverage_tier: operative
obligations:
- id: fhlmc-5601.2-full
  canonical_id: fhlmc-5601.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 5601.2 — Eligibility
    of a property with an ADU
  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 5601.2 — Eligibility
      of a property with an ADU
    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: '5601.2: Eligibility of a property with an ADU (02/09/26) 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:
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26
      Page 5601-5 ■ Eligible properties with ADUs ■ Ineligible properties with ADUs
      ■ Appraisal requirements ■ Manufactured Home ADUs (a) Eligible properties with
      ADUs Freddie Mac will purchase an eligible Mortgage secured by a 1-, 2- or 3-unit
      property that has one ADU. For Mortgages secured by Manufactured Homes, including
      CHOICEHomes®, with an ADU, the primary dwelling unit must be a multiwide Manufactured
      Home. An ADU is classified as an additional finished area that: ■ Includes a
      kitchen, bathroom and separate entrance. Note: The absence of cooking appliance(s)
      in a kitchen does not change the classification as an ADU. ■ Is independent
      of the primary dwelling unit ■ Is smaller in size than the primary dwelling
      unit (i.e., the ADU’s finished area is less than the primary dwelling unit’s
      finished area) and ■ Contributes less to the value of the property than the
      primary dwelling unit Examples of eligible ADU configurations include: ■ A 1-,
      2-, or 3-unit dwelling with an ADU above a garage or outbuilding, ■ A dwelling
      with an attached or detached ADU, or ■ A dwelling with an ADU in the basement
      (b) Ineligible properties with ADUs Mortgages secured by the following ADU configurations
      are not eligible for purchase by Freddie Mac: ■ A 2- or 3-unit property with
      an ADU that does not comply with zoning and land use requirements (illegal zoning)
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26
      Page 5601-6 ■ A 1-, 2- or 3-unit property with two or more ADUs ■ A 4-unit property
      with an ADU (c) Appraisal requirements The appraiser must determine whether
      the subject property has an ADU and report the appraisal on the appropriate
      form. When determining whether the subject property has an ADU, the appraiser
      must consider zoning and land use requirements and all property characteristics,
      specifically the unit’s utility and the property’s highest and best use. If
      the appraiser determines the subject property has an ADU, the appraisal report
      must include: ■ A detailed description of the ADU ■ Any effect the ADU has on
      the market value or marketability of the subject property ■ Specific information
      about the ADU, including but not limited to its general condition, its room
      count (including the number of bedrooms and baths) and the finished square footage
      area (i) For properties with legal or legal non-conforming zoning compliance
      or locations without zoning If the subject property ADU complies with the zoning
      and land use requirements (legal or legal non-conforming or locations without
      zoning), the appraisal report must include the following: ■ At least one comparable
      sale with an ADU, when available, is required to demonstrate the property’s
      conformity and marketability to its Market Area ❑ If a recent comparable sale
      with an ADU is not available in the subject’s Market Area, the appraiser can
      use an older sale with an ADU from the subject’s Market Area or a sale with
      an ADU from a competing Market Area as a comparable sale or as supporting market
      data ❑ The appraiser may always use more than three comparable sales, including
      contract sales (pending sales) and/or current listings, to justify and support
      his or her adjustments and opinion of market value, as long as at least three
      are actual closed (settled) sales ■ If a comparable sale with an ADU is not
      available, the appraiser can use a comparable sale in the subject’s Market Area
      without an ADU as long as the appraiser can justify and support such use in
      the appraisal report. Freddie Mac will purchase eligible Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-7 Mortgages secured
      by a property with an ADU if the appraiser can develop a credible opinion of
      market value for the property. (ii) Comparable requirements for properties with
      illegal zoning compliance If the subject property ADU does not comply with the
      zoning and land use requirements (illegal zoning), the Mortgage is eligible
      if: ■ The subject property is a 1-unit property with an ADU ■ The appraisal
      contains at least two comparable sales with an ADU that is non- compliant with
      the zoning and land use requirements (illegal zoning) to demonstrate the marketability
      of the subject property to its Market Area; and ■ The Seller confirms that the
      existence of the ADU will not jeopardize future hazard insurance claims Note:
      2- or 3-unit properties with an ADU that do not comply with the zoning and land
      use requirements (illegal zoning) are not eligible for sale to Freddie Mac.
      (d) Manufactured Home ADUs Freddie Mac will purchase a Mortgage secured by a
      1-, 2-, or 3-unit property that contains a Manufactured Home ADU that meets
      the following additional requirements: ■ The Manufactured Home ADU must be legally
      classified as real property ■ The Manufactured Home ADU must have a minimum
      of 400 square feet of finished area ■ The Manufactured Home ADU must meet the
      general requirements related to Manufactured Homes in Section 5703.2, property
      eligibility requirements in Section 5703.3(a) and titling and lien requirements
      in Section 5703.4 For Mortgages secured by Manufactured Homes, including CHOICEHomes,
      containing an ADU, the primary dwelling unit must be a multiwide Manufactured
      Home. 5601.2: Eligibility of a property with an ADU (Future effective date 11/02/26)
      This section contains requirements related to: ■ Eligible properties with ADUs
      ■ Ineligible properties with ADUs Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-8 ■ Appraisal report requirements
      ■ Manufactured Home ADUs (a) Eligible properties with ADUs Freddie Mac will
      purchase an eligible Mortgage secured by a 1-, 2- or 3-unit property that has
      one ADU. For Mortgages secured by Manufactured Homes, including CHOICEHomes®,
      with an ADU, the primary dwelling unit must be a multiwide Manufactured Home.
      An ADU is classified as an additional finished area that: ■ Includes a kitchen,
      bathroom and separate entrance. Note: The absence of cooking appliance(s) in
      a kitchen does not change the classification as an ADU. ■ Is independent of
      the primary dwelling unit ■ Is smaller in size than the primary dwelling unit
      (i.e., the ADU’s finished area is less than the primary dwelling unit’s finished
      area) and ■ Contributes less to the value of the property than the primary dwelling
      unit Examples of eligible ADU configurations include: ■ A 1-, 2-, or 3-unit
      dwelling with an ADU above a garage or outbuilding, ■ A dwelling with an attached
      or detached ADU, or ■ A dwelling with an ADU in the basement (b) Ineligible
      properties with ADUs Mortgages secured by the following ADU configurations are
      not eligible for purchase by Freddie Mac: ■ A 2- or 3-unit property with an
      ADU that does not comply with zoning and land use requirements (illegal zoning)
      ■ A 1-, 2- or 3-unit property with two or more ADUs ■ A 4-unit property with
      an ADU Freddie Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26
      Page 5601-9 (c) Appraisal report requirements The appraisal report must identify
      whether the subject property has an ADU. When determining whether the subject
      property has an ADU, the appraiser must consider zoning and land use requirements
      and all property characteristics, specifically the unit’s utility and the property’s
      highest and best use. If the appraiser determines the subject property has an
      ADU, the appraisal report must include: ■ A detailed description of the ADU
      ■ Any effect the ADU has on the market value or marketability of the subject
      property ■ Specific information about the ADU, including, but not limited to,
      its location within the dwelling, its interior condition, its room summary (e.g.,
      bathrooms, bedrooms, kitchen) and the above-grade and below-grade finished and
      unfinished area (i) For properties with legal or legal non-conforming zoning
      compliance or locations without zoning If the subject property ADU complies
      with the zoning and land use requirements (legal or legal non-conforming or
      locations without zoning), the appraisal report must include the following:
      ■ At least one comparable sale with an ADU, when available, is required to demonstrate
      the property’s conformity and marketability to its Market Area ❑ If a recent
      comparable sale with an ADU is not available in the subject property’s Market
      Area, the appraisal report can include an older sale with an ADU from the subject
      property’s Market Area or a sale with an ADU from a competing Market Area as
      a comparable sale or as supporting market data ❑ The appraisal report may include
      more than three comparable sales, including contract sales (pending sales) and/or
      current listings, to support the adjustments and the opinion of market value,
      as long as at least three are closed (settled) sales ■ If a comparable sale
      with an ADU is not available, the appraisal report can include comparable sales
      in the subject property’s Market Area without an ADU as long as the appraisal
      report includes justification for such use (ii) Comparable requirements for
      properties with illegal zoning compliance If the subject property ADU does not
      comply with the zoning and land use requirements (illegal zoning), the Mortgage
      is eligible for sale to Freddie Mac if: Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-10 ■ The subject property is a 1-unit
      property with an ADU ■ The appraisal report includes at least two comparable
      sales with an ADU that is non- compliant with the zoning and land use requirements
      (illegal zoning) to demonstrate the marketability of the subject property to
      its Market Area; and ■ The Seller confirms that the existence of the ADU will
      not jeopardize future hazard insurance claims Note: A Mortgage secured by a
      2- or 3-unit property with an ADU that does not comply with the zoning and land
      use requirements (illegal zoning) is not eligible for sale to Freddie Mac. (d)
      Manufactured Home ADUs Freddie Mac will purchase a Mortgage secured by a 1-,
      2-, or 3-unit property that contains a Manufactured Home ADU that meets the
      following additional requirements: ■ The Manufactured Home ADU must be legally
      classified as real property ■ The Manufactured Home ADU must have a minimum
      of 400 square feet of finished area ■ The Manufactured Home ADU must meet the
      general requirements related to Manufactured Homes in Section 5703.2, property
      eligibility requirements in Section 5703.3(a) and titling and lien requirements
      in Section 5703.4 For Mortgages secured by Manufactured Homes, including CHOICEHomes,
      containing an ADU, the primary dwelling unit must be a multiwide Manufactured
      Home. 5601.3: Eligibility of a property with incomplete improvements (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. A Mortgage is only eligible for delivery to
      Freddie Mac prior to the completion of improvements when all of the following
      conditions are satisfied: 1. The appraiser has provided the “as completed” value
      as the opinion of market value 2. The appraiser has provided a list of the incomplete
      items, and the appraiser or a disinterested (but relevant) party has provided
      a cost to complete the incomplete items Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-11 For example: A contractor/painter
      who provides an estimate to paint interior walls is a disinterested (but relevant)
      party. A relevant party also includes, but is not limited to, a representative
      of a home improvement store or an independent contractor who performs the services
      needed to complete the improvements. 3. The incomplete items do not adversely
      affect the safety, soundness or structural integrity of the Mortgaged Premises
      4. The Seller determines that the improvements cannot be completed for valid
      reasons; examples include, but are not limited to, inclement weather or temporary
      shortages of building materials. Exception: This requirement does not apply
      to GreenCHOICE Mortgages®. 5. The improvements will be satisfactorily completed
      no more than 365 days after the Note Date 6. The Mortgage is not secured by
      a Manufactured Home. Exceptions: This requirement does not apply to GreenCHOICE
      Mortgages or CHOICERenovation® Mortgages. 7. The cost to complete the incomplete
      items does not exceed 10% of the “as completed” value of the Mortgaged Premises;
      provided, however, if the Mortgage is a GreenCHOICE Mortgage meeting the requirements
      of Chapter 4606, the cost to complete the incomplete items may not exceed 15%
      of the “as completed” value of the Mortgaged Premises 8. The Seller has established
      a completion escrow account for the incomplete improvements. The Seller and
      the Borrower must execute a written escrow agreement detailing how the funds
      will be managed and disbursed. A copy of the escrow agreement must be retained
      in the Mortgage file. 9. The mortgage insurance must be maintained in compliance
      with the master policy and applicable guides of the selected mortgage insurer
      10. The title to the Mortgaged Premises will not be impaired or adversely affected
      by the delayed completion of all improvements 11. Upon completion of all improvements,
      the Seller/Servicer must obtain a completion report documenting that the property
      has been completed and retain it in the Mortgage file. See Section 5605.8 for
      more information on completion report requirements. Third parties may perform
      certain incomplete improvement functions identified above as obligations or
      requirements of the Seller or the Servicer. However, the Seller remains responsible
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26
      Page 5601-12 for compliance with these and all other requirements of the Purchase
      Documents. See Section 4201.8 for more details on Wholesale Home Mortgages.
      5601.3: Eligibility of a property with incomplete improvements (Future effective
      date 11/02/26) A Mortgage is eligible for delivery to Freddie Mac prior to the
      completion of improvements only when all of the following conditions are satisfied:
      1. The appraisal report is based on the “as completed” value as the opinion
      of market value 2. The appraisal report includes a list of the incomplete items,
      and the appraiser or a disinterested (but relevant) party has provided a cost
      to complete the incomplete items For example: A contractor/painter who provides
      an estimate to paint interior walls is a disinterested (but relevant) party.
      A relevant party also includes, but is not limited to, a representative of a
      home improvement store or an independent contractor who performs the services
      needed to complete the improvements. 3. The incomplete items do not adversely
      affect the soundness or structural integrity of the Mortgaged Premises 4. The
      Seller determines that the improvements cannot be completed for valid reasons;
      examples include, but are not limited to, inclement weather or temporary shortages
      of building materials. Exception: This requirement does not apply to GreenCHOICE
      Mortgages®. 5. The improvements will be satisfactorily completed no more than
      365 days after the Note Date 6. The Mortgage is not secured by a Manufactured
      Home. Exceptions: This requirement does not apply to GreenCHOICE Mortgages or
      CHOICERenovation® Mortgages. 7. The cost to complete the incomplete items does
      not exceed 10% of the “as completed” value of the Mortgaged Premises; provided,
      however, if the Mortgage is a GreenCHOICE Mortgage meeting the requirements
      of Chapter 4606, the cost to complete the incomplete items may not exceed 15%
      of the “as completed” value of the Mortgaged Premises 8. The Seller has established
      a completion escrow account for the incomplete improvements. The Seller and
      the Borrower must execute a written escrow agreement detailing how the Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-13
      funds will be managed and disbursed. A copy of the escrow agreement must be
      retained in the Mortgage file. 9. The mortgage insurance must be maintained
      in compliance with the master policy and applicable guides of the selected mortgage
      insurer 10. The title to the Mortgaged Premises will not be impaired or adversely
      affected by the delayed completion of all improvements 11. Upon completion of
      all improvements, the Seller/Servicer must obtain a completion report documenting
      that the property has been completed and retain it in the Mortgage file. See
      Section 5605.9 for more information on completion report requirements. Third
      parties may perform certain incomplete improvement functions identified above
      as obligations or requirements of the Seller or the Servicer. However, the Seller
      remains responsible for compliance with these and all other requirements of
      the Purchase Documents. See Section 4201.8 for more details on Wholesale Home
      Mortgages. 5601.4: Eligibility of properties with energy-efficient improvements
      and properties with solar panels (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.
      Freddie Mac purchases Mortgages secured by properties with energy-efficient
      improvements and properties with solar panels as specified below. This section
      contains requirements related to: ■ Properties with energy-efficient improvements
      ■ Properties with solar panels (a) Properties with energy-efficient improvements
      The appraisal report must: ■ Identify energy-efficient features (e.g., photovoltaic
      systems, water efficient improvements, energy-efficient windows) or high-performing
      energy-efficient homes and any impact to market value Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-14 ■ Assess the
      contributory value of energy improvements and any premium paid for a high- performing
      energy-efficient home based on the market reaction, similar to any other property
      feature ■ Consider appropriate valuation methods (e.g., income approach, cost
      analysis, discounted cash flows, or market surveys or any other applicable methods)
      when determining contributory value ■ Justify and support any adjustments in
      the appraisal report in an addendum or in supplementary documentation, if necessary
      Appraisers must be familiar with energy reports, energy ratings or other new
      concepts that may be developed to identify the energy efficiency of a home.
      If relied upon, any reports must be generally acceptable, and, if available,
      these reports and information must be included in the appraisers’ analysis.
      Additional due diligence may be necessary if the high-performing energy-efficient
      home or energy improvements are new to the market and there are a lack of sales
      with similar features or a lack of data available from traditional data sources.
      Note: The Appraisal Institute’s Form 820.05, Residential Green and Energy Efficient
      Addendum, may be used to collect and report energy efficiency data associated
      with a property. Resources Seller resources related to energy-efficient properties
      and the appraisal of properties with energy-efficient features: ■ The Appraisal
      Institute (including the use of the Residential Green and Energy Efficient Addendum)
      ■ The Home Energy Rating System (HERS®) Index provided by the Residential Energy
      Services Network (RESNET®) ■ The Home Energy Score provided by the U.S. Department
      of Energy’s Better Buildings® initiative ■ EiValue® – Tool used in the valuation
      of photovoltaic systems and/or the energy related efficiency of a property (income
      and cost approaches) ■ PV Value® – Tool used in the valuation of photovoltaic
      systems (income approach) (a) Properties with solar panels Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-15 The Seller must
      take into consideration ownership of the solar panels and any liens upon the
      property relating to debt or lease payments used to obtain the solar panels.
      For example, solar panels not owned by the Borrower can be financed via several
      types of agreements such as lease agreements or a power purchase agreement (PPA).
      The Seller must also review any UCC-1 Financing Statement or lease agreement
      associated with the solar panels to determine if liens are against the real
      estate or against the solar panels. The property must maintain access to electrical
      utilities consistent with community standards. If solar panels are present on
      the Mortgaged Premises, the Seller must follow the requirements outlined in
      the table below: Properties with solar panels PPA Solar panel lease Solar panels
      financed as personal property Solar panel financed as a fixture to real estate
      Solar panels owned free and clear Description The Borrower purchases power produced
      by the solar panels but does not own the solar panels. The Borrower pays monthly
      lease payments to access the solar panels but does not own them. The Borrower
      owns the solar panels, having purchased them with a note/security agreement
      and is entitled to power produced by the panels. Borrower owns the solar panels
      and has no related debt. Title UCC-1 Financing Statement or lease agreement
      associated with the solar panels recorded in the applicable land records and
      claiming an interest in the solar panels but not the real estate; the Seller
      is not required to obtain a subordination agreement of the UCC-1 Financing Statement.
      UCC-1 Financing Statement recorded against title to the Mortgaged Premises,
      creating a lien on the real estate itself (i.e., claiming an interest in both
      the solar panels There must be no UCC- 1 Financing Statement or notice recorded
      against the Mortgage Premises. In the event there is a UCC-1 Financing Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-16
      and the real estate, not just the solar panels); the Seller must either subordinate
      or release this lien. Statement, it must be released. Appraisal The solar panels
      must not be included in the appraised value of the property. The appraiser must
      comment on the marketability of the home with solar panels present and identify
      the panels and system features. The solar panels must not be included in the
      appraised value of the property if the lender may repossess them for default
      on the financing terms. Seller must ensure the appraiser has recognized the
      existence of the solar panels and considered the solar panels in the appraiser’s
      opinion of the market value of the property. Debt payment- to-income (DTI) ratio
      Lease payments for solar panels may be excluded from the monthly DTI ratio if
      the lease: ■ Provides for delivery of a specific amount of energy for an agreed
      upon payment during a given period, and ■ Includes a production guarantee under
      which the Borrower is compensated on a prorated basis when the solar panel energy
      production falls below the level required by the lease agreement Payment to
      solar company or lender is included in the DTI ratio. Payment to solar company
      or lender is included in the DTI ratio. N/A – no payment required Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-17
      Payments for solar panels subject to a PPA or similar type of agreement may
      be excluded from the monthly DTI ratio if the payment is calculated based only
      on the generated energy. Total loan-to- value (TLTV) ratio Not included in the
      TLTV ratio Included in the TLTV ratio N/A Obtain a copy of the lease, PPA or
      note/security agreement Damage that occurs as a result of installation, malfunction
      or the removal of the solar panels is the responsibility of the owner of the
      equipment. The owner must be obligated to repair the damage and return the improvements
      to their original or prior condition. In the event of foreclosure, the Seller/Servicer
      may: ■ Terminate the lease agreement or PPA and require the owner of the equipment
      to remove the panels and supporting equipment ■ Become the beneficiary of the
      Borrower’s lease agreement or PPA without incurring a transfer fee; or ■ Enter
      into a new lease agreement or PPA with the owner of the equipment under terms
      no less favorable than the existing agreement ■ The Mortgage file must contain
      a copy of the lease agreement, PPA or similar type of agreement, as applicable
      N/A Homeowner’s insurance The owner of the solar panels agrees to not be a loss
      payee (or named insured) on the homeowner’s insurance policy covering the property.
      N/A Any title insurance policy exceptions due to the existence of the lease
      agreement, PPA or similar type of agreement must comply with the acceptable
      exceptions found in Section 4702.4. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-18 5601.4: Eligibility of properties
      with energy-efficient improvements and properties with solar panels (Future
      effective date 11/02/26) Freddie Mac purchases Mortgages secured by properties
      with energy-efficient improvements and properties with solar panels as specified
      below. This section contains requirements related to: ■ Properties with energy-efficient
      improvements ■ Properties with solar panels (a) Properties with energy-efficient
      improvements The appraiser must: ■ Identify energy-efficient features (e.g.,
      photovoltaic systems, water efficient improvements, energy-efficient windows)
      or high-performing energy-efficient homes and identify any impact to value or
      marketability ■ Assess the contributory value of energy improvements and any
      premium paid for a high- performing energy-efficient home based on the market
      reaction, similar to any other property feature ■ Consider appropriate valuation
      methods (e.g., income approach, cost analysis, discounted cash flows, or market
      surveys or any other applicable methods) when determining contributory value
      ■ Justify and support any adjustments in the appraisal report by including commentary
      or exhibits ■ Include photos of energy-efficient or green features ■ Identify
      whether the property has an efficiency rating; if the property has an efficiency
      rating, the rating organization, rating and score must be identified Appraisers
      must be familiar with energy reports, energy ratings or other concepts that
      may be developed to identify the energy efficiency of a home. If relied upon,
      any reports must be generally acceptable, and, if available, these reports and
      information must be included in the appraisers’ analysis and included in the
      appraisal report as an exhibit. Additional due diligence may be necessary if
      the high-performing energy-efficient home or energy improvements are new to
      the market and there are a lack of sales with similar features or a lack of
      data available from traditional data sources. Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-19 Note: The Appraisal Institute’s
      Form 820.05, Residential Green and Energy Efficient Addendum, may be used to
      collect and report energy efficiency data associated with a property. If Form
      820.05 is used, it must be included as an exhibit in the appraisal report. Resources
      Seller resources related to energy-efficient properties and the appraisal of
      properties with energy-efficient features: ■ The Appraisal Institute (including
      the use of the Residential Green and Energy Efficient Addendum) ■ The Home Energy
      Rating System (HERS®) Index provided by the Residential Energy Services Network
      (RESNET®) ■ The Home Energy Score provided by the U.S. Department of Energy’s
      Better Buildings® initiative ■ EiValue® – Tool used in the valuation of photovoltaic
      systems and/or the energy related efficiency of a property (income and cost
      approaches) ■ PV Value® – Tool used in the valuation of photovoltaic systems
      (income approach) (b) Properties with solar panels The Seller must take into
      consideration ownership of the solar panels and any liens upon the property
      relating to debt or lease payments used to obtain the solar panels. For example,
      solar panels not owned by the Borrower can be financed via several types of
      agreements such as lease agreements or a power purchase agreement (PPA). The
      Seller must also review any UCC-1 Financing Statement or lease agreement associated
      with the solar panels to determine if liens are against the real estate or against
      the solar panels. The property must maintain access to electrical utilities
      consistent with community standards. If solar panels are present on the Mortgaged
      Premises, the Seller must follow the requirements outlined in the table below:
      Properties with solar panels PPA Solar panel lease Solar panels financed as
      personal property Solar panel financed as a fixture to real estate Solar panels
      owned free and clear Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5601 As of 05/06/26 Page 5601-20 Description The Borrower purchases power produced
      by the solar panels but does not own the solar panels. The Borrower pays monthly
      lease payments to access the solar panels but does not own them. The Borrower
      owns the solar panels, having purchased them with a note/security agreement
      and is entitled to power produced by the panels. Borrower owns the solar panels
      and has no related debt. Title UCC-1 Financing Statement or lease agreement
      associated with the solar panels recorded in the applicable land records and
      claiming an interest in the solar panels but not the real estate; the Seller
      is not required to obtain a subordination agreement of the UCC-1 Financing Statement.
      UCC-1 Financing Statement recorded against title to the Mortgaged Premises,
      creating a lien on the real estate itself (i.e., claiming an interest in both
      the solar panels and the real estate, not just the solar panels); the Seller
      must either subordinate or release this lien. There must be no UCC-1 Financing
      Statement or notice recorded against the Mortgage Premises. In the event there
      is a UCC-1 Financing Statement, it must be released. Appraisal The solar panels
      must not be included in the appraised value of the property. The appraisal report
      must include comments on the marketability of the home with solar panels present
      and identify the panels and system features. The solar panels must not be included
      in the appraised value of the property if the lender may repossess them for
      default on the financing terms. Seller must ensure the appraiser has recognized
      the existence of the solar panels and considered the solar panels and reported
      any impact to value and Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5601 As of 05/06/26 Page 5601-21 marketability. Debt payment-to- income (DTI)
      ratio Lease payments for solar panels may be excluded from the monthly DTI ratio
      if the lease: ■ Provides for delivery of a specific amount of energy for an
      agreed upon payment during a given period, and ■ Includes a production guarantee
      under which the Borrower is compensated on a prorated basis when the solar panel
      energy production falls below the level required by the lease agreement Payments
      for solar panels subject to a PPA or similar type of agreement may be excluded
      from the monthly DTI ratio if the payment is calculated based only on the generated
      energy. Payment to solar company or lender is included in the DTI ratio. Payment
      to solar company or lender is included in the DTI ratio. N/A – no payment required
      Total loan-to- value (TLTV) ratio Not included in the TLTV ratio Included in
      the TLTV ratio N/A Obtain a copy of the lease, PPA or note/security agreement
      Damage that occurs as a result of installation, malfunction or the removal of
      the solar panels is the responsibility of the owner of the equipment. The owner
      must be obligated to repair the damage and return the improvements to their
      original or prior condition. In the event of foreclosure, the Seller/Servicer
      may: ■ Terminate the lease agreement or PPA and require the owner of the equipment
      to remove the panels and supporting equipment ■ Become the beneficiary of the
      Borrower’s lease agreement or PPA without incurring a transfer fee; or ■ Enter
      into a new lease agreement or PPA with the N/A Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5601 As of 05/06/26 Page 5601-22 owner of the equipment under
      terms no less favorable than the existing agreement ■ The Mortgage file must
      contain a copy of the lease agreement, PPA or similar type of agreement, as
      applicable Homeowner’s insurance The owner of the solar panels agrees to not
      be a loss payee (or named insured) on the homeowner’s insurance policy covering
      the property. N/A Any title insurance policy exceptions due to the existence
      of the lease agreement, PPA or similar type of agreement must comply with the
      acceptable exceptions found in Section 4702.4. 5601.5: Eligibility of a property
      with mixed-use (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. Freddie Mac
      purchases Mortgages secured by residential properties with mixed-use characteristics.
      This section contains: ■ Eligibility requirements ■ Appraiser requirements (a)
      Eligibility requirements A residential property with mixed-use must meet the
      following requirements: ■ The property must be a 1-unit Primary Residence ■
      The property must be located in a predominantly residential Neighborhood, be
      primarily residential in nature based on the characteristics of the property
      and be typical for the properties in the Market Area ■ The mixed-use must represent
      a legal, permissible use of the property under the local zoning requirements
      ■ If the property has a commercial use, the Borrower must be the owner and the
      operator of the business Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5601 As of 05/06/26 Page 5601-23 ■ The dwelling may not be modified in a manner
      that has an adverse impact on its marketability as a residence ■ The commercial
      use must not have an adverse effect on the habitability and safety of the property
      or site (b) Appraiser requirements The appraiser must provide the following
      when appraising a mixed-use property: ■ An appraisal with an interior and exterior
      inspection ■ A detailed description of any accommodations made for the commercial
      use of the subject property ■ A discussion of any positive or adverse impacts
      of the commercial use and whether the cost to restore the property to solely
      residential use will affect its value ■ A statement describing any market resistance
      to the commercial use and adjustments for any commercial features made to the
      comparable sales ■ An opinion of market value based on the property’s residential
      nature Note: See Section 5701.8(b)(ii) for Condominium Unit live-work requirements.
      5601.5: Eligibility of a property with mixed-use (Future effective date 11/02/26)
      Freddie Mac purchases Mortgages secured by residential properties with mixed-use
      characteristics. This section contains: ■ Eligibility requirements ■ Appraisal
      report requirements (a) Eligibility requirements A residential property with
      mixed-use must meet the following requirements: ■ The property must be a 1-unit
      Primary Residence ■ The property must be located in a predominantly residential
      Neighborhood, be primarily residential in nature based on the characteristics
      of the property and be typical for the properties in the Market Area Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-24
      ■ The mixed-use must represent a legal, permissible use of the property under
      the local zoning requirements ■ If the property has a commercial use, the Borrower
      must be the owner and the operator of the business ■ The dwelling may not be
      modified in a manner that has an adverse impact on its marketability as a residence
      ■ The commercial use must not have an adverse effect on the habitability and
      safety of the property or site (b) Appraisal report requirements The Seller
      must deliver a Traditional Appraisal Report or Hybrid Appraisal Report that
      includes: ■ The type(s) of non-residential use observed on the property ■ Identification
      of whether the use is adverse, beneficial or neutral. If the use is adverse
      or beneficial, a description of the impact to value or marketability is required
      ■ Commentary related to whether the cost to restore the property to solely residential
      use will affect its value ■ Commentary describing any market resistance to the
      commercial use ■ Adjustments to the comparable sales related to the commercial
      use ■ An opinion of market value based on the property’s residential use Note:
      See Section 5701.8(b)(ii) for Condominium Unit live-work requirements. 5601.6:
      Eligibility of a property with two or more adjoining parcels (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 Section 5605.4. When the Mortgaged Premises includes two or
      more parcels of real estate, the following requirements apply: Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-25 ■ 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 Seller provides evidence in the Mortgage file that
      the parcel without the residence cannot be improved with a dwelling. ■ The Mortgaged
      Premises must contain only one residence. (An ADU is allowed only 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 or agricultural) ■ Each parcel
      must be conveyed in its entirety ■ The site description must accurately describe
      the land and any improvements included on each of the parcels ■ The residence
      or improvements may be built across the lot lines ■ Non-residential improvements
      such as garages or outbuildings are acceptable on any parcel In addition, the
      appraiser must consider how the existence of two or more parcels, adjoining
      or not, influence the value use and marketability of the property. 5601.6: Eligibility
      of a property with two or more adjoining parcels (Future effective date 11/02/26)
      Effective November 2, 2026, Section 5601.6 is deleted. See Section 5605.4 for
      information related to eligibility of a property with two or more adjoining
      parcels. 5601.7: Seller verification of subject property Owner of Record (05/06/26)
      This section contains requirements related to: ■ Verifying the Owner of Record
      ■ Investigating and documenting Owner of Record discrepancies Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5601 As of 05/06/26 Page 5601-26 (a) Verifying
      the Owner of Record The Seller must verify the information outlined in the table
      below: Owner of Record verification by transaction type Transaction type The
      Seller must verify: Purchase ■ The property seller listed on the sales contract
      is the Owner of Record of the subject property; or ■ If the transaction involves
      the sale of land separate from the dwelling, the property seller listed on the
      sales contract for the land is the Owner of Record for the land Refinance The
      Borrower is an Owner of Record of the subject property. Payoff of a land contract
      ■ The property seller is the vendor on the recorded land contract and the Owner
      of Record of the subject property; and ■ The Borrower is a vendee on the recorded
      land contract (b) Investigating and documenting Owner of Record discrepancies
      If the property seller for purchase transactions or the Borrower for refinance
      transactions is not the Owner of Record, the Seller must investigate the circumstances
      of the transaction to ensure the transaction is legitimate. If the Seller determines
      the transaction is legitimate, the Seller must retain in the Mortgage file documentation
      evidencing the verification or legitimacy of the transaction, which may include:
      ■ The appraiser’s analysis and conclusions in the appraisal report ■ A property
      sales history report ■ A copy of the recorded deed ■ A copy of a property tax
      bill ■ A copy of property title information indicating legal ownership of the
      property (e.g., title property report summary, title commitment or binder, attorney
      opinion of title letter) Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5602 As of 05/06/26 Page 5602-1 Chapter 5602: Collateral Representations and
      Warranties, Loan Collateral Advisor® and Automated Collateral Evaluation (ACE
      and ACE+ PDR) 5602.1: Collateral representations and warranties (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:
      ■ Value warranty ■ Condition warranty ■ Marketability warranty In addition to
      all other representations and warranties specified in the Seller’s Purchase
      Documents, the Seller makes the following representations and warranties: (a)
      Value warranty The Seller represents and warrants that the appraisal accurately
      reflects the market value of the Mortgaged Premises. Note: See Section 5604.3
      for information regarding requirements for Mortgages with Settlement Dates more
      than 120 days after the Note Date. (b) Condition warranty As of the Settlement
      Date, the Seller represents and warrants that the Mortgaged Premises is not
      in C5 or C6 condition. For property types not required to utilize the Uniform
      Appraisal Dataset condition ratings, the Seller represents that the subject
      property is in a condition consistent with condition ratings C1 through C4.
      (c) Marketability warranty Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5602 As of 05/06/26 Page 5602-2 As of the Settlement Date, the Seller represents
      and warrants that the Mortgaged Premises is acceptable to typical purchasers
      in the subject property’s Market Area. 5602.1: Collateral representations and
      warranties (Future effective date 11/02/26) This section contains requirements
      related to: ■ Value warranty ■ Condition warranty ■ Marketability warranty In
      addition to all other representations and warranties specified in the Seller’s
      Purchase Documents, the Seller makes the following representations and warranties:
      (a) Value warranty The Seller represents and warrants that the appraisal accurately
      reflects the market value of the Mortgaged Premises. Note: See Section 5604.3
      for information regarding requirements for Mortgages with Settlement Dates more
      than 120 days after the Note Date. (b) Condition warranty As of the Settlement
      Date, the Seller represents and warrants that the Mortgaged Premises is not
      in C5 or C6 condition. (c) Marketability warranty As of the Settlement Date,
      the Seller represents and warrants that the Mortgaged Premises is acceptable
      to typical purchasers in the subject property’s Market Area.'
  judgment: false
