FHLMC Single-Family Seller/Servicer Guide Chapter 4204 — Secondary Financing and Other Financing Arrangements
FHLMC Single-Family Guide §4204.1 governs Mortgages with secondary financing (subordinate liens, HELOCs, EAH Benefits, Affordable Seconds carve-out): disclosure to appraiser and MI; prohibition on sharing LTV-target information with the appraiser; no-equity- sharing rule (except Affordable Seconds); 5-year minimum amortization, maturity, and call-provision rules for new secondary financing; regular-monthly-payment-covering-interest rule; subordination-evidence requirement for existing secondary financing. Fills FHLMC Selling Guide Chapter 4204 gap.
Verbatim regulatory text
Verbatim provisions from FHLMC Single-Family Seller/Servicer Guide Chapter 4204 — Secondary Financing and Other Financing Arrangements — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
FHLMC Single-Family Guide §4204.1(a) — Disclose secondary financing terms to appraiser and MI
The terms of any secondary financing must be disclosed to the appraiser and to the MI.
FHLMC Single-Family Guide §4204.1(a) — No value-needed or LTV-expected information to appraiser
The Seller may not indicate a value needed to support the transaction, or provide to the appraiser any information about an expected
FHLMC Single-Family Guide §4204.1(a) — No equity sharing in secondary financing (except Affordable Seconds)
the terms of secondary financing must not permit the provider or any other party to share in the appreciation of the Mortgaged Premises
FHLMC Single-Family Guide §4204.1(b) — New secondary financing maturity at least 5 years after Note Date
The maturity date of the secondary financing must be at least five years after the Note Date
FHLMC Single-Family Guide §4204.1(b) — Secondary financing scheduled payments must cover monthly interest
The terms of the secondary financing must provide for regular monthly payments that cover at least the interest that accrues during the previous month.