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Financial Services Law Insights and Observations

Freddie Mac releases various selling and servicing updates in Guide Bulletin 2018-21

Federal Issues Freddie Mac Selling Guide Servicing Guide Mortgages

Federal Issues

On November 13, Freddie Mac released Guide Bulletin 2018-21 announcing selling and servicing updates, including new requirements for mortgages secured by energy and/or water efficient properties. Effective for mortgages with settlement dates on or after May 1, 2019, Freddie Mac’s GreenCHOICE Mortgages program seeks to improve home affordability by reducing homeowners’ monthly energy or water expenses by facilitating the financing of energy efficient improvements and homes. The bulletin lists specific requirements for the program, including caps for financing the costs of improvements, escrow, and energy reporting requirements. Freddie Mac will apply a $500 credit to help offset transactional costs, provided the seller delivers the requisite Investor Feature Identifier. The Bulletin also includes servicing and transfer of servicing requirements for the program.

Finally, the Bulletin covers property insurance requirements related to flood insurance for condominium projects and revisions to insurance policy premium requirements for condominiums located in Puerto Rico, both of which are effective immediately.

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