source:
  type: guide
  id: fhlmc-8304.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 8304.2 — Maintaining
    Custodial Accounts
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 8304.2 — Maintaining
    Custodial Accounts.
  coverage_tier: operative
obligations:
- id: fhlmc-8304.2-full
  canonical_id: fhlmc-8304.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 8304.2 — Maintaining
    Custodial Accounts
  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 8304.2 — Maintaining
      Custodial Accounts
    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: '8304.2: Maintaining Custodial Accounts (09/10/25) This section
      contains requirements related to: ■ Investing custodial account funds ■ Maintaining
      the Principal and Interest Custodial Account balance ■ Maintaining the Escrow
      Custodial Account balance ■ Maintaining the Buydown Custodial Account ■ Monitoring
      depository eligibility (a) Investing custodial account funds The Servicer may
      not invest funds deposited into any Freddie Mac Custodial Account. (b) Maintaining
      the Principal and Interest Custodial Account balance The Servicer must: ■ Maintain
      Freddie Mac funds separately from the Servicer’s general ledger account; a general
      ledger account is not a substitute for a Demand Deposit account ■ Deposit all
      Freddie Mac funds into a Demand or Interest-Bearing Deposit Account in accordance
      with Section 8302.1(b) ■ Ensure that funds are available for Freddie Mac to
      draft principal and interest or payoff amounts. If the funds available in a
      Principal and Interest Custodial Account are less than the amount due to Freddie
      Mac on the applicable draft date, the Servicer must advance its funds so that
      the amount due to Freddie Mac is available before the applicable draft date.
      ■ Maintain a positive daily balance in the Principal and Interest Custodial
      Account(s) at all times ■ Perform a consolidated reconciliation if the Servicer
      has more than one Principal and Interest Custodial Account under a specific
      Seller/Servicer number The Servicer may recover any funds it advanced for the
      payment of delinquent net yield interest from subsequent collections of Principal
      and Interest Payments. (c) Maintaining the Escrow Custodial Account balance
      The Servicer must: Freddie Mac Single-Family Seller/Servicer Guide Chapter 8304
      As of 09/10/25 Page 8304-4 1. Establish and maintain at least one Escrow Custodial
      Account for each Seller/Servicer number, even if the Servicer does not collect
      Escrow Funds for Mortgages serviced under that number 2. Maintain the Escrow
      Funds separately from the Servicer’s general ledger account; a general ledger
      account is not a substitute for a Demand Deposit Account 3. Deposit all Freddie
      Mac funds into a Demand or Interest-Bearing Deposit Account in accordance with
      Section 8302.1(b) 4. Ensure that each Borrower’s vested interest is ascertainable
      at all times 5. Ensure that funds are available for remittances before disbursing
      funds to third parties 6. Maintain a positive daily balance in the Escrow Custodial
      Account(s) at all times 7. Perform a consolidated reconciliation if the Servicer
      has more than one Escrow Custodial Account under a specific Seller/Servicer
      number 8. Deposit an advance from the Servicer’s funds to the Escrow Custodial
      Account for any shortages on the same day the shortage occurs and before making
      any disbursements. The Servicer must not use the overages of one Borrower account
      to fund the negative Escrow or shortage of other Borrower accounts. The Servicer
      may recover any Escrow advance from subsequent payments to the Escrow Custodial
      Account of the specific Mortgage for which the Servicer made the advance. (d)
      Maintaining the Buydown Custodial Account Servicers may deposit buydown funds
      into the Escrow Custodial Account, or the Servicer may, at its option, open
      a separate Custodial Account for buydown funds. If the Servicer establishes
      a separate Buydown Custodial Account, the Servicer must comply with the requirements
      regarding Custodial Accounts generally, and the maintenance and reconciliation
      of Escrow Custodial Accounts set forth in the Guide for such Buydown Custodial
      Accounts. (e) Monitoring depository eligibility The Servicer must maintain all
      Custodial Accounts in an Eligible Depository at all times. The Servicer must
      have its own oversight process to continually monitor its depository to ensure
      it is viable and in good standing and meets the requirements of Section 8302.2(b).
      The Servicer’s obligation to transfer funds to an Eligible Depository is not
      dependent upon notification from Freddie Mac. The Servicer may determine a depository’s
      eligibility by subscribing to any of the rating services referenced in Section
      8302.2(c) or by contacting Freddie Mac Single-Family Seller/Servicer Guide Chapter
      8304 As of 09/10/25 Page 8304-5 Institutional_Eligibility@FreddieMac.com. In
      addition, the Servicer may determine a depository’s ineligibility based on actual
      knowledge. If the Servicer determines that a depository is no longer eligible,
      it must: 1. Open new Custodial Accounts within 30 days from the release date
      of the ratings that make the depository ineligible 2. Meet the requirements
      listed in Sections 8304.3(c) and 8304.3(d) for changing or transferring accounts
      8304.3: Transferring or changing Custodial Accounts (09/10/25) This contains
      information related to: ■ Freddie Mac''s right to remove accounts from specified
      depositories ■ The Servicer’s right to change or transfer accounts ■ Requirements
      for changing or transferring accounts ■ Liability for Custodial Account transfer
      costs (a) Freddie Mac''s right to remove accounts from specified depositories
      Freddie Mac reserves the right to determine, at Freddie Mac’s sole discretion,
      that the Servicer may no longer deposit or hold Principal and Interest Payments
      and Escrow Funds in a particular depository. Freddie Mac’s exercise of its rights
      under this section means that it may expressly prohibit a Servicer from maintaining
      Custodial Accounts with a particular depository. If Freddie Mac determines that
      a depository no longer meets Freddie Mac’s requirements, Freddie Mac will give
      the Servicer written notice to remove the Custodial Accounts. The Servicer must
      comply with all requirements of the notice and take the following actions: ■
      Close the Custodial Accounts within the time frame as specified in the notice
      ■ Open new Custodial Accounts in accordance with the requirements of Section
      8304.3(c) in an Eligible Depository other than the depository specified in the
      notice (b) The Servicer’s right to change or transfer accounts Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 8304 As of 09/10/25 Page 8304-6 The Servicer may
      choose to change Custodial Accounts or transfer them to another Eligible Depository.
      If the Servicer chooses to do so, it must adhere to the requirements of Section
      8304.3(c). (c) Requirements for changing or transferring accounts Changes to
      or transfers of Custodial Accounts may result from any of the following circumstances:
      ■ The ineligibility of a depository according to the requirements of Section
      8304.2(e) ■ A written notice from Freddie Mac to remove the account according
      to the requirements of Section 8304.3(a) ■ The Servicer’s choice to change or
      transfer the account according to the requirements of Section 8304.3(b) ■ A
      change to the depository’s name, account number or bank routing number (i) Custodial
      Account The Servicer must meet the requirements of Sections 8302.1(b) through
      8302.1(d), 8302.2(b) and 8302.2(c) to change or transfer any Custodial Account.
      (ii) Remittance drafting account In addition to meeting the requirements above,
      if there is any change or transfer that affects the Custodial Account the Servicer
      chose as a remittance drafting account, the Servicer must also: 1. Contact Freddie
      Mac (see Directory 1) 2. Submit the documentation required by Section 8302.1(d)
      at least 15 Business Days before the Servicer plans to use the new account or
      modified bank routing instruction 3. Continue to use the existing account or
      bank routing instructions until Freddie Mac gives the Servicer written authorization
      to use the new account or modified bank routing instructions 4. Transfer funds
      from the former Custodial Account to the new Custodial Account when the Servicer
      receives Freddie Mac’s written notice that Freddie Mac has processed the new
      remittance instructions If Freddie Mac drafts and funds are not available because
      the Servicer changed its drafting account without receiving Freddie Mac’s written
      authorization, the Servicer will Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 8304 As of 09/10/25 Page 8304-7 be subject to an interest reimbursement
      compensatory fee as set forth in Section 8303.5(g). (d) Liability for Custodial
      Account transfer costs Freddie Mac will not be liable to the Servicer for any
      costs, fees, penalties, loss of interest income or any other expenses directly
      or indirectly resulting from the transfer of any Custodial Account from one
      depository to another. Refer to Sections 8304.2(e) through 8304.3(b). This applies
      whether Freddie Mac requires the Servicer, or the Servicer chooses, to transfer
      the Custodial Account.'
  judgment: false
