source:
  type: guide
  id: fhlmc-4302.4
  authority: Freddie Mac Single-Family Seller/Servicer Guide Section 4302.4 — Borrower
    eligibility
  description: Freddie Mac Single-Family Seller/Servicer Guide Section 4302.4 — Borrower
    eligibility.
  coverage_tier: operative
obligations:
- id: fhlmc-4302.4-full
  canonical_id: fhlmc-4302.4-full
  section: Freddie Mac Single-Family Seller/Servicer Guide Section 4302.4 — Borrower
    eligibility
  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 4302.4 — Borrower
      eligibility
    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: '4302.4: Borrower eligibility (12/04/24) Borrower eligibility
      requirements for Refi Possible® Mortgages Topic Borrower eligibility requirements
      Borrower income ■ The Borrower’s qualifying income converted to an annual basis
      must not exceed 100% of the Area Median Income for the location of the Mortgaged
      Premises ■ To determine if the Borrower’s income exceeds the income limits,
      the Seller must rely on the income used to qualify the Borrower ■ For Loan Product
      Advisor Mortgages, Loan Product Advisor will use the income used to qualify
      the Borrower that was submitted to determine the income eligibility of the Mortgage
      ■ For non-Loan Product Advisor Mortgages, the Seller must use the Home Possible®
      Income & Property Eligibility tool. The Seller may not use other published Area
      Median Income versions (such as Area Median Incomes posted on https://www.huduser.gov/portal/home.html)
      to determine Mortgage or product eligibility. Change in Borrowers ■ The Borrower(s)
      obligated on the Note for the Refi Possible Mortgage must be the same as the
      Borrower(s) obligated on the Note for the Mortgage being refinanced, except
      that a Borrower obligated on the Note for the Mortgage being refinanced may
      be omitted from the Note for the Refi Possible Mortgage provided that: ❑ The
      Mortgage file contains evidence that the remaining Borrower has been making
      the Mortgage payments, including the payments for any secondary financing, for
      the most recent 12-month period from their own funds; or Freddie Mac Single-Family
      Seller/Servicer Guide Chapter 4302 As of 04/12/26 Page 4302-4 Borrower eligibility
      requirements for Refi Possible® Mortgages Topic Borrower eligibility requirements
      ❑ In the case of death, the Seller obtains and retains in the Mortgage file
      documentation of the Borrower’s death ■ In all cases, at least one Borrower
      from the Mortgage being refinanced must be retained 4302.5: Special eligibility
      and underwriting requirements for Refi Possible® (04/12/26) The following table
      describes the special requirements for Refi Possible® Mortgages applicable to
      Loan Product Advisor® Mortgages and Manually Underwritten Mortgages, except
      as specifically stated otherwise: Special eligibility and underwriting requirements
      for Refi Possible Mortgages Topic Special eligibility and underwriting requirements
      Underwriting path The Refi Possible Mortgage must be: ■ Submitted to Loan Product
      Advisor in accordance with the requirements of Chapter 5101, or ■ Manually underwritten
      in accordance with the requirements of the Guide except as specifically stated
      otherwise in this chapter. The Mortgage must be otherwise eligible for manual
      underwriting in accordance with the Guide. General eligibility requirements
      ■ The Refi Possible Mortgage must be a fixed-rate Mortgage ■ The Refi Possible
      Mortgage must not be: ❑ A Mortgage with a temporary interest rate buydown ❑
      A super conforming Mortgage ❑ Originated pursuant to Section 50(a)(6) of Article
      XVI of the Texas Constitution. Refer to Section 4301.7 for additional information
      regarding Texas Equity Section 50(a)(6) Mortgages. Secondary financing An existing
      junior lien: ■ Must be subordinated to the Refi Possible Mortgage and must meet
      requirements for secondary financing in Chapter 4204 ■ May be refinanced simultaneously
      with the existing First Lien provided that: ❑ The UPB of the new junior lien
      is not more than the UPB, at the time of Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4302 As of 04/12/26 Page 4302-5 Special eligibility and underwriting
      requirements for Refi Possible Mortgages Topic Special eligibility and underwriting
      requirements payoff, of the junior lien being refinanced, ❑ There is no increase
      in the monthly Principal and Interest Payment of the junior lien No new subordinate
      financing is permitted, except to replace existing subordinate financing as
      stated above. Occupancy and property eligibility ■ The Refi Possible Mortgage
      must be secured by a one-unit Primary Residence ■ The Mortgaged Premises must
      be an attached or detached dwelling, a Manufactured Home, a unit in a Condominium
      Project or Planned Unit Development, or, if the Seller is permitted to deliver
      Cooperative Share Loans under its Purchase Documents, a Cooperative Unit ■ For
      Mortgages secured by Condominium Units or Cooperative Share Loans, the Seller
      is not required to evaluate if the Condominium or Cooperative Project meets
      the project eligibility requirements, provided that: ❑ The Seller represents
      and warrants that the project is not located in a Condominium Hotel or a cooperative
      hotel, houseboat project, timeshare project or project with segmented ownership;
      and ❑ The project has insurance that meets the applicable insurance requirements
      of Chapter 4703 Maximum loan-to- value (LTV)/total LTV (TLTV)/Home Equity Line
      of Credit (HELOC) TLTV (HTLTV) ratios Property/transaction type Max LTV/TLTV/HTLTV
      ratios 1-unit other than Manufactured Homes 97%* Manufactured Homes 95% Mortgage
      with a non-occupying Borrower, whether or not secured by a Manufactured Home
      95%* *A TLTV ratio up to 105% is permitted when the Mortgage is not secured
      by a Manufactured Home and secondary financing is an Affordable Second®. Borrower
      benefit The refinance transaction must result in both of the following: ■ A
      First Lien Mortgage interest rate reduction of at least 50 basis points AND
      ■ A reduction in the Borrower’s First Lien monthly principal, interest and mortgage
      insurance (if applicable) payment amount Freddie Mac Single-Family Seller/Servicer
      Guide Chapter 4302 As of 04/12/26 Page 4302-6 Special eligibility and underwriting
      requirements for Refi Possible Mortgages Topic Special eligibility and underwriting
      requirements Use of Mortgage proceeds The proceeds of the Refi Possible Mortgage
      must be used only to: ■ Pay off the first Mortgage ■ Pay related Closing Costs
      ■ Disburse cash to the Borrower not to exceed $250 In the event there are remaining
      proceeds from the Refi Possible Mortgage after the proceeds are applied as described
      above, the excess proceeds must be applied as a principal curtailment to the
      Refi Possible Mortgage and must be clearly reflected on the Settlement/Closing
      Disclosure Statement. Minimum Indicator Score There is no minimum Indicator
      Score required for eligibility of Refi Possible Mortgages; however, the Seller
      must identify and deliver an Indicator Score for all Refi Possible Mortgages
      in accordance with the requirements for identifying the Indicator Score in Section
      5202.1. If the Seller determines that there is no usable Credit Score due to
      insufficient information or inaccurate information, the Mortgage is not eligible
      for sale to Freddie Mac. Credit assessment for manually underwritten Refi Possible
      Mortgages For Manually Underwritten Mortgages, the Seller does not need to perform
      a credit assessment of the Borrower in accordance with Chapter 5202 provided
      that: ■ In addition to meeting the payment history requirements for the Mortgage
      being refinanced, the Mortgage complies with the recovery time periods for reestablishment
      of credit following a significant derogatory event, as stated in Section 5202.1(d)
      ■ If the significant derogatory event was caused by extenuating circumstances,
      the Mortgage file must contain documentation attributing the cause of the financial
      difficulties to outside factors beyond the Borrower’s control Maximum debt payment-to-
      income (DTI) ratio ■ There is no maximum housing expense-to-income ratio ■ The
      total monthly DTI ratio must be less than or equal to 65%, including when a
      non-occupying Borrower is present Qualifying income In determining the Borrower’s
      qualifying income in accordance with Topic 5300, the Borrower’s base earnings
      must be considered for both non-fluctuating and fluctuating employment earnings
      before any additional employment earnings (e.g., bonus, commission, overtime,
      tips) may be considered. Income and employment documentation ■ The minimum documentation
      requirements in the table below apply to the referenced income types in lieu
      of the Streamlined Accept and Standard Documentation Level requirements stated
      for these income types in Freddie Mac Single-Family Seller/Servicer Guide Chapter
      4302 As of 04/12/26 Page 4302-7 Special eligibility and underwriting requirements
      for Refi Possible Mortgages Topic Special eligibility and underwriting requirements
      requirements Topic 5300 Income type Minimum documentation requirements Base
      non-fluctuating employment (primary only) ■ Year-to-date (YTD) paystub documenting
      the YTD earnings, or ■ Written verification of employment (VOE) documenting
      the YTD earnings, and ■ 10-day pre-closing verification of employment Fluctuating
      hourly employment (primary only) Tip, bonus, overtime and commission income
      ■ YTD paystub documenting the YTD earnings and W-2 for the most recent calendar
      year, or ■ Written VOE documenting the YTD earnings and the earnings for the
      most recent calendar year and ■ 10-day pre-closing verification of employment
      Military income (basic pay, entitlements, Reserve and National Guard income)
      YTD Military Leave and Earnings Statement Self-employment ■ Complete federal
      individual and business income tax returns for the most recent one-year period,
      and ■ Verification of the current existence of the business through a third-party
      source obtained either no more than 120 calendar days prior to Note Date or
      after the Note Date but prior to the Delivery Date Alimony, child support or
      separate maintenance ■ Copy of legally binding documentation verifying the payor’s
      obligation (i.e., signed court order, final divorce decree, legally binding
      separation agreement, legally binding child support agreement or other legally
      binding documentation) for the previous one month, including the amount and
      the duration of the obligation Freddie Mac Single-Family Seller/Servicer Guide
      Chapter 4302 As of 04/12/26 Page 4302-8 Special eligibility and underwriting
      requirements for Refi Possible Mortgages Topic Special eligibility and underwriting
      requirements ■ Documentation to evidence receipt of the alimony, child support
      and/or separate maintenance payment for the most recent one month: ❑ Evidence
      that the payment was cashed or deposited into the Borrower’s depository account
      at a financial institution, or ❑ Evidence that the payment was transferred into
      a third-party money transfer application account owned by the Borrower, or ❑
      Statement from a government agency (i.e., child support agency) reflecting the
      Borrower’s name and the amounts paid ■ All other income types must be documented
      in accordance with the Streamlined Accept and Standard Documentation Level requirements
      in Topic 5300 ■ All other documentation requirements, including Chapter 5302
      and additional requirements for certain employment characteristics in Section
      5303.1, apply Asset documentation requirements ■ When funds required for closing
      are more than $500, sufficient Borrower funds must be documented in accordance
      with Topic 5500, except that funds in a depository, securities or retirement
      account used for closing must be documented with one-month account statement
      or a direct account verification ■ When funds required for closing are $500
      or less, verification of funds is not required Property valuation requirements
      ■ The Seller must obtain an appraisal with an interior and exterior inspection
      that meets the requirements of Topic 5600 unless the Last Feedback Certificate
      includes an automated collateral evaluation (ACE) offer stating that the Mortgage
      is eligible for collateral representation and warranty relief with ACE, or ACE+
      PDR, and the Seller has accepted the offer. See Section 5602.3 for more information
      on ACE or Section 5602.4 for information on ACE+ PDR. ■ Refi Possible Mortgages
      secured by Manufactured Homes must meet the appraisal and valuation requirements
      of Chapter 5703 and are not eligible for ACE or ACE+ PDR ■ An appraisal cost
      offset credit will be provided if an appraisal was obtained for Freddie Mac
      Single-Family Seller/Servicer Guide Chapter 4302 As of 04/12/26 Page 4302-9
      Special eligibility and underwriting requirements for Refi Possible Mortgages
      Topic Special eligibility and underwriting requirements the transaction and
      the loan is delivered without ACE or ACE+ PDR ■ The appraisal cost offset credit
      as described in Exhibit 19, Credit Fees, must be passed to the Borrower Negotiated
      provisions Unless specifically made applicable to Refi Possible Mortgages, negotiated
      underwriting provisions that impact the underwriting or eligibility requirements
      of Refi Possible Mortgages must not be used with these Mortgages.'
  judgment: false
