source:
  type: guide
  id: fhlmc-5602.2
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 5602.2 — Loan
    Collateral Advisor®
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 5602.2 — Loan
    Collateral Advisor®.
  coverage_tier: operative
obligations:
- id: fhlmc-5602.2-full
  canonical_id: fhlmc-5602.2-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 5602.2 — Loan Collateral
    Advisor®
  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 5602.2 — Loan
      Collateral Advisor®
    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: '5602.2: Loan Collateral Advisor® (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 Single-Family Seller/Servicer Guide Chapter 5602
      As of 05/06/26 Page 5602-3 This section contains requirements related to: ■
      Loan Collateral Advisor® overview ■ Eligible Mortgages ■ Ineligible Mortgages
      ■ Exemptions to appraisal underwriting ■ Exceptions to Loan Collateral Advisor
      appraised value representation and warranty relief (a) Loan Collateral Advisor
      overview For Mortgages with appraisals submitted to the Uniform Collateral Data
      Portal® (UCDP®) and assessed through Loan Collateral Advisor, Freddie Mac will
      not exercise its remedies, including the issuance of repurchase requests, in
      connection with a breach of the Seller’s selling representations and warranties
      related to the appraised value of the Mortgaged Premises, provided the requirements
      below are met. (b) Eligible Mortgages The following requirements must be met
      for Mortgages to be eligible for appraised value representation and warranty
      relief: ■ The Mortgage must have a loan-to-value (LTV)/total TLTV (TLTV)/Home
      Equity Line of Credit (HELOC) TLTV (HTLTV) ratio less than or equal to 95% ■
      The Mortgage must be secured by a 1-unit dwelling (including units in a Condominium
      Project or a Planned Unit Development (PUD)) ■ The Borrower must be an individual
      or a Living Trust ■ The UCDP feedback message FRE4000 must be returned, indicating
      “This appraisal is eligible for representation and warranty relief for property
      value, pending an assessment of the loan”. Note: For Sellers using Loan Collateral
      Advisor, representation and warranty relief eligibility corresponds to an appraisal
      with a risk score of 2.5 or lower. Loan Collateral Advisor will also display
      an “eligible” indicator. Upon submission to Loan Product Advisor® and/or Loan
      Quality Advisor®, a corresponding representation and warranty relief message
      will also be provided in the Feedback Certificate. ■ The final submission to
      Loan Selling Advisor® must indicate the representation and warranty relief status
      is “Y” or “Yes” Freddie Mac Single-Family Seller/Servicer Guide Chapter 5602
      As of 05/06/26 Page 5602-4 (c) Ineligible Mortgages The following Mortgages
      are ineligible for appraised value representation and warranty relief: ■ Mortgages
      secured by Manufactured Homes ■ Mortgages secured by leasehold estates ■ Mortgages
      secured by Mortgaged Premises subject to resale restrictions, excluding those
      subject to age-based resale restrictions ■ Freddie Mac Enhanced Relief Refinance®
      Mortgages ■ Community Land Trust Mortgages ■ Cooperative Share Loans (d) Exemptions
      to appraisal underwriting For Mortgages that are eligible for appraised value
      representation and warranty relief as described above, the Seller/Servicer is
      not responsible for underwriting the appraisal to ensure compliance with the
      following requirements: ■ Justification and support for the appraiser’s opinion
      of market value and how the final value conclusion was determined. (See applicable
      language in Section 5605.7.) ■ The validity of the appraiser’s adjustments in
      the analysis of comparable sales. (See applicable language in Section 5605.6.)
      ■ Whether the opinion of market value of the subject property is credible and
      adequately supported. (See applicable language in Section 5605.1.) (e) Exceptions
      to Loan Collateral Advisor appraised value representation and warranty relief
      Even if a Mortgage meets the eligibility requirements above, the Seller/Servicer
      remains responsible for compliance with the following requirements. Freddie
      Mac may still enforce remedies if these requirements are not met, even if such
      matters are related to appraised value: ■ The Mortgaged Premises must meet Freddie
      Mac’s property eligibility requirements (e.g., not vacant, or undeveloped land,
      not primarily used for agricultural or farming purposes or for a commercial
      enterprise, etc.). (See Sections 5601.1 and 5701.2 for additional details regarding
      property eligibility.) Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5602 As of 05/06/26 Page 5602-5 ■ The Mortgaged Premises must not be subject
      to a pending legal proceeding for condemnation in whole or in part (see Section
      5601.1) ■ When applicable, Form 442, Appraisal Update and/or Completion Report,
      or Form 400, Warranty of Completion of Construction or Repairs/Alterations,
      must be obtained to verify that any outstanding conditions of the appraisal
      have been satisfied. (See Section 5605.8 for additional requirements on these
      forms.) ■ The Seller must ensure the appraiser’s description of the subject
      property must be complete and accurate (e.g., accuracy of quality and condition
      ratings, photographs that support the quality and condition of the property,
      etc.). (See applicable language for appraisal requirements in Chapter 5605.)
      5602.2: Loan Collateral Advisor® (Future effective date 11/02/26) This section
      contains requirements related to: ■ Loan Collateral Advisor® overview ■ Eligible
      Mortgages ■ Ineligible Mortgages ■ Exemptions to appraisal underwriting ■ Exceptions
      to Loan Collateral Advisor appraised value representation and warranty relief
      (a) Loan Collateral Advisor overview For Mortgages with appraisal reports submitted
      to the Uniform Collateral Data Portal® (UCDP®) and assessed through Loan Collateral
      Advisor, Freddie Mac will not exercise its remedies, including the issuance
      of repurchase requests, in connection with a breach of the Seller’s selling
      representations and warranties related to the appraised value of the Mortgaged
      Premises, provided the requirements below are met. (b) Eligible Mortgages The
      following requirements must be met for Mortgages to be eligible for appraised
      value representation and warranty relief: ■ The Mortgage must have a loan-to-value
      (LTV)/total TLTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratio
      less than or equal to 95% Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5602 As of 05/06/26 Page 5602-6 ■ The Mortgage must be secured by a 1-unit dwelling
      (including units in a Condominium Project or a Planned Unit Development (PUD))
      ■ The Borrower must be an individual or a Living Trust ■ The UCDP feedback message
      FRE4000 must be returned, indicating “This appraisal is eligible for representation
      and warranty relief for property value, pending an assessment of the loan”.
      Note: For Sellers using Loan Collateral Advisor, representation and warranty
      relief eligibility corresponds to an appraisal with a risk score of 2.5 or lower.
      Loan Collateral Advisor will also display an “eligible” indicator. Upon submission
      to Loan Product Advisor® and/or Loan Quality Advisor®, a corresponding representation
      and warranty relief message will also be provided in the Feedback Certificate.
      ■ The final submission to Loan Selling Advisor® must indicate the representation
      and warranty relief status is “Y” or “Yes” (c) Ineligible Mortgages The following
      Mortgages are ineligible for appraised value representation and warranty relief:
      ■ Mortgages secured by Manufactured Homes ■ Mortgages secured by leasehold estates
      ■ Mortgages secured by Mortgaged Premises subject to resale restrictions, excluding
      those subject to age-based resale restrictions ■ Freddie Mac Enhanced Relief
      Refinance® Mortgages ■ Community Land Trust Mortgages ■ Cooperative Share Loans
      (d) Exemptions to appraisal underwriting For Mortgages that are eligible for
      appraised value representation and warranty relief as described above, the Seller/Servicer
      is not responsible for underwriting the appraisal to ensure compliance with
      the following requirements: ■ Justification and support for the appraiser’s
      opinion of market value and how the final value conclusion was determined. (See
      applicable language in Section 5605.8.) ■ The validity of the appraiser’s adjustments
      in the analysis of comparable sales. (See applicable language in Section 5605.7.)
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5602 As of 05/06/26
      Page 5602-7 ■ Whether the opinion of market value of the subject property is
      credible and adequately supported. (See applicable language in Section 5605.1.)
      (e) Exceptions to Loan Collateral Advisor appraised value representation and
      warranty relief Even if a Mortgage meets the eligibility requirements above,
      the Seller/Servicer remains responsible for compliance with the following requirements.
      Freddie Mac may still enforce remedies if these requirements are not met, even
      if such matters are related to appraised value: ■ The Mortgaged Premises must
      meet Freddie Mac’s property eligibility requirements (e.g., not vacant, or undeveloped
      land, not primarily used for agricultural or farming purposes or for a commercial
      enterprise, etc.). (See Sections 5601.1 and 5701.2 for additional details regarding
      property eligibility.) ■ The Mortgaged Premises must not be subject to a pending
      legal proceeding for condemnation in whole or in part (see Section 5601.1) ■
      When applicable, a UAD Completion Report or Form 400, Warranty of Completion
      of Construction or Repairs/Alterations, must be obtained to verify that any
      outstanding conditions of the appraisal have been satisfied. (See Section 5605.9
      for additional requirements related to the use of these reports.) ■ The Seller
      must ensure the appraiser’s description of the subject property must be complete
      and accurate (e.g., accuracy of quality and condition ratings, photographs that
      support the quality and condition of the property, etc.). (See applicable language
      for appraisal requirements in Chapter 5605.) 5602.3: Automated collateral evaluation
      (ACE) (05/06/26) This section contains requirements related to: ■ Automated
      collateral evaluation (ACE) overview ■ Process for qualifying for and accepting
      the ACE offer ■ Eligible Mortgages ■ Ineligible Mortgages ■ Conditions that
      prevent the Seller from accepting an ACE offer Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5602 As of 05/06/26 Page 5602-8 ■ Acceptable age of the ACE offer
      ■ Data changes that impact ACE eligibility ■ ACE requirements for Settlement
      Dates more than 120 days after the Note Date ■ ACE eligibility in disaster areas
      ■ Seller representation of property review or valuation (a) ACE overview For
      certain Loan Product Advisor® Mortgages, the Seller may receive the option to
      accept an ACE offer and originate the Mortgage without an appraisal. If the
      Seller accepts the ACE offer, Freddie Mac will: ■ Accept the value of the Mortgaged
      Premises as: ❑ The purchase price of the Mortgaged Premises, for purchase transactions,
      or ❑ The estimated value of the Mortgaged Premises, for refinance transactions
      ■ Not exercise its remedies, including the issuance of repurchase requests,
      in connection with a breach of the Seller’s selling representations and warranties
      related to the value, condition and marketability of the Mortgaged Premises
      For refinance transactions, the Sellers must have written procedures in place
      that prohibit changes to the estimated value in Loan Product Advisor for the
      purpose of obtaining ACE or more favorable mortgage terms (e.g., avoiding mortgage
      insurance). The procedures must include a process for establishing the estimated
      value, which may include, but is not limited to, the use of the Borrower’s estimated
      value, an Automated Valuation Model (AVM) or an online valuation tool or website.
      (b) Process for qualifying for and accepting the ACE offer For a Mortgage to
      qualify for an ACE offer: ■ The Mortgage must be an Accept Mortgage ■ The Last
      Feedback Certificate must indicate the Mortgage is eligible for representation
      and warranty relief with ACE. (This represents the “offer.”) Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5602 As of 05/06/26 Page 5602-9 ■ The final submission
      of the Mortgage to Loan Selling Advisor® must indicate the representation and
      warranty relief status is “Y” or “Yes” In lieu of accepting the ACE offer, the
      Seller may deliver the Mortgage with a PDR or an appraisal report if the eligibility
      requirements for ACE+ PDR or the selected appraisal type are met To accept the
      ACE offer, the Seller must deliver the Mortgage with the ULDD Data Points described
      in the data delivery instructions in Section 6302.10(c). (c) Eligible Mortgages
      To be eligible for an ACE offer, the Mortgage must: ■ Be secured by a 1-unit
      dwelling that is either a Primary Residence or a second home ■ Meet the following
      occupancy and maximum loan-to-value (LTV)/total LTV (TLTV) ratio requirements:
      Mortgage purpose Occupancy type Maximum LTV/TLTV ratios Purchase Primary Residence
      or second home 90% “No cash-out” refinance Primary Residence or second home
      90% Cash-out refinance Primary Residence 70% Second home 60% (d) Ineligible
      Mortgages The following Mortgages are ineligible for ACE: ■ Mortgages for which
      an appraisal or a PDR has been obtained in connection with the Mortgage ■ Mortgages
      secured by one of the following: ❑ A Manufactured Home, or ❑ A leasehold estate
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5602 As of 05/06/26
      Page 5602-10 ■ Mortgages secured by Mortgaged Premises subject to resale restrictions
      (excluding those subject to age-based resale restrictions) ■ Mortgages secured
      by a property acquired in a Non-arm’s Length Transaction ■ Mortgages secured
      by a property where the property owner at the time of sale (i.e., the property
      seller) is a lender or a government entity ■ Mortgages with an estimate of value
      or purchase price greater than $1,000,000 ■ CHOICERenovation® Mortgages ■ Community
      Land Trust Mortgages ■ Construction to Permanent Mortgages ■ Cooperative Share
      Loans ■ Freddie Mac Enhanced Relief Refinance® Mortgages ■ GreenCHOICE Mortgages®
      ■ Renovation Mortgages ■ Seller-Owned Modified Mortgages that are Home Possible®
      Mortgages ■ Texas Equity Section 50(a)(6) and Texas Section 50(f)(2) Mortgages
      (e) Conditions that prevent the Seller from accepting an ACE offer Sellers may
      not accept the ACE offer if: ■ An appraisal is required by law or regulation
      ■ Rental income from an ADU on a subject 1-unit Primary Residence is used to
      qualify the Borrower ■ The Seller is aware, based on a review of the sales contract,
      property disclosure statement, property inspection, disclosure by the Borrower,
      etc., of an adverse physical property deficiency that warrants a PDR or an appraisal
      report being obtained. For purchase transaction Mortgages, the Seller must review
      the sales contract and, if provided, the property disclosure statement, for
      adverse physical property deficiencies. Examples of an adverse physical property
      deficiency that warrants a PDR or an appraisal report being obtained include,
      but are not limited to: Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5602 As of 05/06/26 Page 5602-11 ❑ A contaminated site or hazardous substance
      that affects the property or the Neighborhood in which the property is located
      ❑ The property has a deficiency that is consistent with a C5 or C6 condition
      rating (e.g., active roof leak(s), damaged or failing foundation). Refer to
      Section 5605.5(a) for further information related to property condition. Note:
      Refer to Section 5603.3(a) for further information on property disclosure statements.
      (f) Acceptable age of the ACE offer The ACE offer provided through the Loan
      Product Advisor Feedback Certificate message is valid for 120 days. If the offer
      is more than 120 days old on the Note Date, resubmission to Loan Product Advisor
      is required to determine ongoing ACE eligibility. (g) Data changes that impact
      ACE eligibility If the Seller changes loan data (e.g., address of the property,
      loan amount, purchase price, estimate of value, loan type, property type, occupancy
      of the property, etc.) in a subsequent submission, the original offer will become
      invalid, and Loan Product Advisor may provide a different ACE eligibility determination.
      (h) ACE requirements for Settlement Dates more than 120 days after the Note
      Date If the Settlement Date is more than 120 days after the Note Date, the Seller
      must warrant that the value of the subject property as of the Settlement Date
      is no less than the estimated value or sales price submitted to Loan Product
      Advisor. (i) ACE eligibility in disaster areas Sellers may accept an ACE offer
      for properties located in disaster areas if the Seller can represent and warrant
      that the value and marketability of the Mortgaged Premises has not been adversely
      impacted. See Section 4407.1 for property condition requirements. (j) Seller
      representation of property review or valuation A Seller that has accepted an
      ACE offer must not make any representation that Freddie Mac has performed a
      property review or obtained a valuation of the Mortgaged Premises.'
  judgment: false
