Freddie Mac issued Bulletin 2019-11 (Bulletin), announcing revisions to the Single-Family Seller/Servicer Guide. Per the Bulletin, Freddie Mac revised requirements related to credit underwriting and mortgage eligibility. Specifically, the revised requirements: now allow the delivery of mortgages secured by manufactured homes with land contract or contract for deed pay offs; clarify that monthly bridge loan payments must be included in debt payment-to-income ratio calculations; and reduce the recovery time period for a discharged Chapter 12 bankruptcy to 24 months (as opposed to 48 months).
In addition, Freddie Mac:
- Amended requirements related to condominium projects (including condominium projects with commercial parking facilities);
- Clarified policy related to the acceptance of private flood insurance;
- Revised Guide Exhibit 5 (Authorized Changes to Notes, Riders, Security Instruments and the URLA) to confirm that sellers may use the Demographic Information Addendum as a replacement for the existing Section X (Information for Government Monitoring Purposes) on the URLA (Guide Form 65);
- Retired the eMortgage Guide on Freddie Mac.com and reissued requirements from the eMortgage Guide in a new Chapter (Chapter 1402) of the Single-Family Seller/Servicer Guide;
- Added special delivery instructions for mortgages with electronic documentation (including eMortgages and mortgages with remote online electronic notarization);
- Now allows 15- and 30-year fixed-rate mortgages to be sold in exchange for UMBS and MBS with coupons at any increment (i.e., coupons not divisible by .5% [aka “odd coupons”]);
- Now offers new 15- and 30-year fixed-rate assumable mortgages for sale under the Guarantor program; and
- Updated requirements with respect to 10-year cash contracts.
The revisions related to mortgage backed securities with coupons not divisible by .5% (odd coupons) and the sale of fixed-rate assumable products under the Guarantor Program are effective July 1, 2019. The revisions related to condominium projects with commercial parking facilities are effective September 5, 2019. All other revisions are effective immediately.
