source:
  type: guide
  id: fhlmc-5501.3
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 5501.3 — Borrower
    personal funds
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 5501.3 — Borrower
    personal funds.
  coverage_tier: operative
obligations:
- id: fhlmc-5501.3-full
  canonical_id: fhlmc-5501.3-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 5501.3 — Borrower
    personal funds
  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 5501.3 — Borrower
      personal funds
    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: '5501.3: Borrower personal funds (08/06/25) This section contains
      requirements related to: ■ Depository and non-depository accounts ■ Securities,
      retirement accounts and government bonds ■ Proceeds from a secured loan Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-8
      ■ Revolving credit card (charges/cash advances) or unsecured line of credit
      ■ Proceeds from credit card reward points ■ Proceeds from the sale of real estate
      and other assets ■ Real estate commission and rent credits ■ Funds from a trust
      ■ Cash value of a life insurance policy ■ Additional requirements for accounts
      held in financial institutions ■ Minimum contribution from Borrower personal
      funds ■ Earnest money deposit (EMD) ■ Business assets ■ Source of funds from
      outside the United States and its territories ■ Cryptocurrency Asset types that
      are considered Borrower personal funds and the eligibility and documentation
      requirements are described in the tables in this section. These requirements
      apply to all funds used to qualify the Borrower, including reserves. Any limitations
      on the use of an asset type are specified in the tables below. See Section 4501.7
      for additional eligible sources of Borrower personal funds for Home Possible®
      Mortgages and Section 4504.7(c)(i) for additional eligible sources of Borrower
      personal funds for HeritageOne® Mortgages. (a) Depository and non-depository
      accounts The following table contains eligibility and documentation requirements
      for depository and non-depository accounts: Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5501 As of 03/04/26 Page 5501-9 Depository and non-depository
      accounts Asset type and eligibility requirements Streamlined Accept Documentation
      requirements Standard Documentation requirements 1. Depository accounts Depository
      accounts used to deposit and withdraw cash, such as: ■ Checking ■ Savings ■
      Money market ■ Certificate of deposit (CD) ■ Other depository accounts Account
      statement covering a one- month period or a direct account verification (i.e.,
      verification of deposit (VOD)) Account statement(s) covering a two- month period
      or a direct account verification (i.e., VOD) 2. Individual Development Account
      (IDA) – Agency matching funds not subject to Recapture ■ With respect to the
      subject Mortgage, the Agency must not: ❑ Be the Seller or have participated
      in any aspect of the Mortgage origination process ❑ Be affiliated with, under
      contract to or financed (directly or indirectly) by the Seller or any party
      that participated in the Mortgage origination process. For these purposes, “affiliated
      with” means that the Agency and the Seller or other party are related to each
      other as a consequence of one entity directly or indirectly controlling the
      other party, being controlled by the other party or being under common control
      with that party. Documentation of the IDA program verifying: ■ Matching funds
      are not subject to Recapture ■ Ratio of matching funds by the Agency ■ Regular
      payments made to the IDA by the Borrower and the matching organization ■ Vested
      balance or the percentage of vesting Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 5501 As of 03/04/26 Page 5501-10 Depository and non-depository
      accounts Asset type and eligibility requirements Streamlined Accept Documentation
      requirements Standard Documentation requirements ■ Any matching funds may be
      considered Borrower personal funds ■ A maximum of a 4-to-1 match by an Agency’s
      funds is permitted ■ The Borrower must satisfy any vesting requirements of the
      matching IDA program Note: See Section 5501.4(b) for information related to
      IDA – Agency matching funds subject to Recapture. 3. Community Savings System
      accounts – Borrower contributions Funds on deposit in a Community Savings System
      that are deposited by the Borrower. A nonprofit community organization must
      administer the savings system. Community Savings Systems account statements
      or a direct account verification identifying the nonprofit community organization
      as the administrator and showing all Borrower contributions. 4. Pooled funds
      Pooled funds are funds on deposit provided by the Borrower and other member(s)
      of a group of Related Persons who: ■ Have resided together for at least one
      year ■ Will continue residing together in the new residence, and are “pooling”
      their funds to buy a home Funds provided by Related Persons who do not reside
      with the Borrower are subject to the requirements of the table in Section 5501.4
      for gift funds. All of the following: ■ Evidence that the Borrower and the Related
      Person have resided together for at least one year ■ Documentation verifying
      the pooled funds per the requirements for the applicable asset type in Sections
      5501.3 and 5501.4 ■ A written statement, in the form of a signed letter or an
      e-mail directly from the Borrower, executed at application attesting to all
      of the following: • The source of the pooled funds • The fact that the pooled
      funds were not borrowed by the contributing Related Person Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-11 Depository and
      non-depository accounts Asset type and eligibility requirements Streamlined
      Accept Documentation requirements Standard Documentation requirements • The
      relationship between the contributing Related Person and the Borrower • That
      the Related Person has resided with the Borrower for the past year and intends
      to continue residing with the Borrower in the new residence for the foreseeable
      future Note: The written statement is not required to be notarized or acknowledged
      but must be kept in the Mortgage file. (b) Securities, retirement accounts and
      government bonds The following table contains eligibility and documentation
      requirements for securities, retirement accounts and government bonds: Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-12
      Securities, retirement accounts and government bonds Asset type and eligibility
      requirements Streamlined Accept Documentation requirements Standard Documentation
      requirements 1. Securities Securities that are traded on an exchange or marketplace,
      generally available to the public such as: ■ Stocks ■ Vested stock options ■
      Bonds ■ Mutual funds ■ U.S. government securities ■ Other securities Value must
      not include margin accounts. Stock with limitations on its accessibility (e.g.,
      restricted stock that has not vested and been distributed to the recipient)
      is not eligible. Account statement covering a one- month period or a direct
      account verification (i.e., VOD) Account statement(s) covering a two- month
      period or a direct account verification (i.e., VOD) If the Borrower does not
      receive a stock/security account statement: ■ Provide evidence the security
      is owned by the Borrower, and ■ Document value using current stock prices from
      a financial publication or website When securities are needed for closing, evidence
      of liquidation is required unless the combined value of the assets is at least
      20% greater than the amount from these assets needed for closing. Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-13
      Securities, retirement accounts and government bonds Asset type and eligibility
      requirements Streamlined Accept Documentation requirements Standard Documentation
      requirements 2. Retirement accounts Independent retirement accounts and Internal
      Revenue Service (IRS)- qualified employer retirement plan accounts such as:
      ■ 401(k) ■ 403(b) ■ Individual Retirement Accounts (IRAs) (traditional and Roth)
      ■ Simplified Employee Pension (SEP)-IRA ■ Savings Incentive Match Plan for Employees
      (SIMPLE) IRA ■ Keogh ■ State retirement savings plans ■ Other independent and
      IRS- qualified employer retirement plan accounts Account statement covering
      a one- month period or a direct account verification (i.e., VOD) Account statement(s)
      covering a two- month period or a direct account verification (i.e., VOD) When
      retirement accounts are needed for closing, evidence of liquidation is required
      unless the combined value of the assets is at least 20% greater than the amount
      from these assets needed for closing. When evidence of liquidation is not required,
      in order to use the vested amount of an IRS-qualified employer retirement account,
      the Mortgage file must include documentation confirming: ■ The Borrower is permitted
      to make withdrawals, and ■ Severance from the Borrower’s current employment
      is not required 3. Government bonds (federal, State or municipal) The value
      used must be based on the lower of the purchase price or current redeemable
      value. Documentation verifying the ownership and the value. When government
      bonds are needed for closing, evidence of liquidation is required unless the
      combined value of the assets is at least 20% greater than the amount from these
      assets needed for closing. Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5501 As of 03/04/26 Page 5501-14 (c) Proceeds from a secured loan The following
      table contains eligibility and documentation requirements for proceeds from
      a secured loan: Proceeds from a secured loan Asset type and eligibility requirements
      Streamlined Accept Documentation requirements Standard Documentation requirements
      1. Proceeds from a loan fully secured by the Borrower’s assets other than real
      property The loan must not be provided by an interested party to the real estate
      or Mortgage transaction. When the loan is secured by a financial asset used
      to qualify the Borrower for the Mortgage transaction, the value of the asset
      must be reduced by the amount of the loan proceeds and any associated fees.
      Note: See Section 5401.2(c)(vii) for when the monthly payment on a loan secured
      by the Borrower’s financial asset may be excluded from the monthly debt payment-to-income
      (DTI) ratio. All of the following: ■ Documentation verifying the value and ownership
      of the asset and which supports that the loan is secured by that asset ■ Evidence
      of receipt of the loan proceeds 2. Proceeds from a loan secured by the Borrower’s
      real property (including proceeds from a Home Equity Line of Credit (HELOC)
      or a bridge loan) For refinance Mortgages, the cash- out proceeds from the subject
      cash- out refinance transaction and any cash back received on the subject “no
      cash-out” refinance transaction are not eligible sources of funds for reserves.
      All of the following: ■ Evidence the loan is secured by the Borrower’s real
      property ■ Evidence of the Borrower’s receipt of the disbursed loan proceeds
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26
      Page 5501-15 (d) Revolving credit card (charges/cash advances) or unsecured
      line of credit The following table contains eligibility and documentation requirements
      for using a revolving credit card (charges/cash advances) or unsecured line
      of credit: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of
      03/04/26 Page 5501-16 Revolving credit card (charges/cash advances) or unsecured
      line of credit Asset type and eligibility requirements Streamlined Accept Documentation
      requirements Standard Documentation requirements Borrower’s revolving credit
      card (charges/cash advances) or unsecured line of credit Borrower’s revolving
      credit card (charges/cash advances) or unsecured line of credit may only be
      used to pay fees associated with the Mortgage application process (e.g., origination
      fees, commitment fees, lock-in fees, appraisal, credit report and flood certifications).
      The maximum amount charged or advanced may not exceed the greater of 2% of the
      Mortgage amount or $1,500. Additionally, one of the following requirements must
      be met: ■ The Borrower must have sufficient verified funds to pay these fees
      (in addition to the funds needed to qualify for the Mortgage transaction); however,
      the Borrower is not required to pay off these charges at closing ■ The amount
      charged or advanced must be included in the Borrower’s total outstanding debt
      and the repayment of such amount must be included when determining the Borrower’s
      monthly DTI ratio as described in Section 5401.2 Note: See Section 4408.1(d)
      when the Borrower uses a revolving credit card or unsecured line of credit to
      pay fees that will be reimbursed pursuant to an employee relocation program.
      All of the following: ■ The account statement or receipt showing the amount
      charged or advanced ■ Verification of sufficient funds to pay the amount charged
      or advanced if the amount charged or advanced is not included in the monthly
      DTI ratio (e) Proceeds from credit card reward points The following table contains
      eligibility and documentation requirements for proceeds from credit card reward
      points: Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26
      Page 5501-17 Proceeds from credit card reward points Asset type and eligibility
      requirements Streamlined Accept Documentation requirements Standard Documentation
      requirements Credit card reward points The reward points must be redeemed for
      cash. All of the following for reward points that are not yet deposited in the
      Borrower’s account: ■ Evidence of the Borrower’s ownership of the reward points
      and their cash value, and ■ Evidence that the reward points are redeemed for
      cash prior to closing, which may include a direct transfer of the cash to the
      settlement or closing agent For reward points redeemed for cash and deposited
      in the Borrower’s account, refer to the requirements for evaluation of deposits
      in the Borrower’s accounts in Section 5501.1(e) (f) Proceeds from the sale of
      real estate and other assets The following table contains eligibility and documentation
      requirements for proceeds from the sale of real estate and other assets: Proceeds
      from the sale of real estate and other assets Asset type and eligibility requirements
      Streamlined Accept Documentation requirements Standard Documentation requirements
      1. Proceeds from the sale of the Borrower’s real property (including proceeds
      from a 1031 exchange) ■ The Settlement/Closing Disclosure Statement or an alternative
      form required by law verifying the proceeds from the sale of the Borrower’s
      real property, and/or ■ An executed buy-out agreement that is part of an employer
      relocation plan that takes responsibility for the outstanding Mortgage(s) Freddie
      Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26 Page 5501-18
      Proceeds from the sale of real estate and other assets Asset type and eligibility
      requirements Streamlined Accept Documentation requirements Standard Documentation
      requirements 2. Trade equity: Net proceeds of the trade-in of the Borrower’s
      previously owned residence The Borrower’s equity in the previously owned residence
      is determined by subtracting any outstanding liens on the previously owned residence,
      plus any transfer costs, from the lesser of the appraised value of the previously
      owned residence or its trade-in price as shown in the trade-in contract. All
      of the following: ■ The appraisal of the Borrower’s previously owned residence
      ■ The trade-in contract 3. Proceeds from the sale of the Borrower’s assets other
      than real property or exchange-traded securities The purchaser of the Borrower’s
      asset must not be an interested party to the real estate or Mortgage transaction.
      All of the following: ■ A signed bill of sale documenting the asset and transfer
      of ownership ■ Evidence of receipt of the proceeds (g) Real estate commission
      and rent credits The following table contains eligibility and documentation
      requirements for real estate commission and rent credits: Real estate commission
      and rent credits Asset type and eligibility requirements Streamlined Accept
      Documentation requirements Standard Documentation requirements 1. Borrower’s
      real estate commission Borrower’s real estate commission is an eligible source
      of funds for Down Payment and/or Closing Costs when the Borrower is a licensed
      real estate agent that is due to receive a sales The Settlement/Closing Disclosure
      Statement, which must reflect the commission earned by the Borrower and credited
      toward the Mortgage transaction. Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 5501 As of 03/04/26 Page 5501-19 Real estate commission and rent credits
      Asset type and eligibility requirements Streamlined Accept Documentation requirements
      Standard Documentation requirements commission from their purchase of the subject
      property. 2. Rent credits The portion of rental payments paid by the Borrower
      credited towards the Down Payment and/or Closing Costs under a documented rental/purchase
      agreement. The credit must not exceed the difference between the market rent
      and actual rent paid. The rental/purchase agreement must have an original term
      of at least 12 months and the rent must be based on a minimum of 12 months rental
      payments. All of the following: ■ The rental/purchase agreement ■ Evidence of
      rental payments (see Section 5202.1(b) for acceptable documentation for rental
      verification) ■ Appraiser’s determination of the market rent for the subject
      property (h) Funds from a trust The following table contains eligibility and
      documentation requirements for funds from a trust: Funds from a trust Asset
      type and eligibility requirements Streamlined Accept Documentation requirements
      Standard Documentation requirements Funds from a trust The Borrower must be
      the beneficiary of the trust and have access to the funds as of the Note Date.
      The Borrower’s portion of undistributed trust funds may be used as reserves
      only. The trust agreement or a signed statement from the trustee or trust manager
      that documents the following information: ■ Identifies the Borrower as the beneficiary
      ■ Confirms that the Borrower has access to all or a certain specific amount
      of the funds ■ Confirms that the trust has sufficient assets to disburse funds
      needed by the Borrower Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5501 As of 03/04/26 Page 5501-20 Funds from a trust Asset type and eligibility
      requirements Streamlined Accept Documentation requirements Standard Documentation
      requirements When trust funds are needed for closing, evidence of receipt of
      the disbursed funds from the trust is required. (i) Cash value of a life insurance
      policy The following table contains eligibility and documentation requirements
      for cash value of a life insurance policy: Cash value of a life insurance policy
      Asset type and eligibility requirements Streamlined Accept Documentation requirements
      Standard Documentation requirements Cash value of a life insurance policy (not
      the face value) The Borrower must be the owner of the policy and not the beneficiary.
      Documentation from the life insurance company verifying the following information:
      ■ Policy owner(s) ■ Period covered and current cash value, and ■ Any outstanding
      loans When cash value of the life insurance policy is needed for closing, evidence
      of liquidation is required. (j) Additional requirements for accounts held in
      financial institutions All accounts held in financial institutions must be owned
      by the Borrower and the Borrower must have access to the funds. ■ Funds in accounts
      that are owned jointly by the Borrower and a non-Borrower are considered Borrower
      personal funds ■ Accounts held in the name of a Living Trust are considered
      to be owned by the Borrower when the Borrower is the Settlor of the Living Trust
      Freddie Mac Single-Family Seller/Servicer Guide Chapter 5501 As of 03/04/26
      Page 5501-21 ■ When the Borrower is a Living Trust, the Underwritten Settlor
      is considered to be the owner of accounts held in the name of the trust (k)
      Minimum contribution from Borrower personal funds For a purchase transaction
      Mortgage, the Borrower must make a minimum contribution from Borrower personal
      funds when required in the Guide, as described in the table below: Minimum contribution
      from Borrower personal funds Mortgage type Guide section Mortgages with loan-to-value
      (LTV)/total LTV (TLTV)/Home Equity Line of Credit (HELOC) TLTV (HTLTV) ratios
      ≤ 80% Mortgages with LTV/TLTV/HTLTV ratios > 80% Mortgage secured by a 1- to
      4-unit Primary Residence N/A None Mortgage secured by a second home Section
      4201.12 None 5% of value, when gift funds are used for the transaction Mortgage
      secured by an Investment Property Section 4201.13 All funds used for the transaction
      must be Borrower personal funds Mortgages with shared equity plans Section 4204.4
      5% of value (must be Owner-Occupant’s personal funds) See Section 4501.7(a)(iii)
      for requirements for minimum contribution from Borrower personal funds for Home
      Possible® Mortgages and Section 4504.7(a) for requirements for minimum contribution
      from Borrower personal funds for HeritageOne® Mortgages. (l) Earnest money deposit
      (EMD) When an EMD for a purchase transaction Mortgage is used to qualify the
      Borrower, the Seller must document that the EMD cleared the Borrower’s account
      (e.g., copy of the canceled check, asset account statement, written statement
      from the EMD holder verifying receipt of the funds or wire transfer confirmation).
      When the EMD is needed to meet the minimum contribution from Borrower personal
      funds, the Seller must: Freddie Mac Single-Family Seller/Servicer Guide Chapter
      5501 As of 03/04/26 Page 5501-22 ■ Verify that the source of the EMD is an eligible
      asset type and document it in accordance with the applicable requirements in
      this section ■ Provide account statement(s) (based on Streamlined Accept or
      Standard documentation requirements, as applicable) or a direct account verification
      (i.e., verification of deposit (VOD)) that covers the period up to and including
      the date the EMD funds cleared the account The EMD must not be counted twice
      in the evaluation of the Mortgage (i.e., deducted from the funds to close and
      counted in assets). If the source of the Borrower’s EMD is gift funds, see Section
      5501.4(a)(1). (m)Business assets Funds from a Borrower’s business account may
      be used to qualify the Borrower, provided they meet the requirements of this
      chapter, except as stated below. Documentation of large deposits, as described
      in Section 5501.1(f), is not required provided that the Seller: ■ Reviews a
      minimum of the most recent two months of the business account statements, and
      ■ Determines the deposits are typical for the Borrower’s business See Section
      5304.1(l) for additional requirements when self-employed income from the business
      is used for qualifying. (n) Source of funds from outside the United States and
      its territories When the source of funds needed for closing is, or otherwise
      originates from, asset(s) located outside the United States and its territories:
      ■ Funds must be transferred into a U.S.- or State-regulated financial institution
      and verified in U.S. dollars prior to the closing of the Mortgage transaction,
      or ■ Combined value of the assets must be at least 20% greater than the amount
      from these assets needed for closing See Section 5102.3(b) for additional requirements
      when funds from outside the United States and its territories are used to qualify
      the Borrower. (o) Cryptocurrency Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 5501 As of 03/04/26 Page 5501-23 Any amount of cryptocurrency must be
      exchanged for U.S. dollars if it will be used as a source of funds for the Mortgage
      transaction (i.e., any funds required to be paid by the Borrower and Borrower
      reserves).'
  judgment: false
