Freddie Mac Single-Family Seller/Servicer Guide 4607.12 — Custodial Accounts for Renovation Funds for CHOICERenovation® Mortgages

Freddie Mac Single-Family Seller/Servicer Guide 4607.12 — Custodial Accounts for Renovation Funds for CHOICERenovation® Mortgages

Effective 2025-09-10 · Freddie Mac's stamp for this section

This section contains requirements related to: ■ General requirements ■ Opening the Custodial Account for Renovation Funds ■ Changing or transferring Custodial Accounts for Renovation Funds ■ Freddie Mac’s rights ■ Seller responsibilities related to maintaining the Custodial Account The requirements of this section apply to CHOICERenovation® In Progress Mortgages. (a) General requirements For each Seller/Servicer number associated with one or more CHOICERenovation Mortgage(s), the Seller must: ■ Open and maintain a separate completion escrow account solely to retain the CHOICERenovation Mortgage proceeds and any other deposited funds to be used to complete the renovations of Mortgaged Premises securing CHOICERenovation Mortgages (such funds, the “Renovation Funds” and each such account, the “Custodial Account for Renovation Funds”) ■ Open and maintain each Custodial Account for Renovation Funds in accordance with the requirements of this section and the account must be utilized exclusively for the CHOICERenovation Mortgages it sells to Freddie Mac under a particular Seller/Servicer number ■ Ensure the Custodial Account for Renovation Funds does not carry a negative balance, even if permitted by its depository institution ■ Maintain a separate account record for each CHOICERenovation Mortgage’s Renovation Funds retained in the Custodial Account for Renovation Funds until all appropriate parties have been paid and the renovation work is completed and all unused funds have been disbursed in accordance with Section 4607.11(c) for unused funds. Each separate account record may not reflect a negative balance. (b) Opening the Custodial Account for Renovation Funds Each Custodial Account for Renovation Funds must meet the requirements in Section 8302.1(b) for Custodial Accounts, Section 8302.2(b) for an Eligible Depository, Section 8302.1(c)(iii) for Escrow Custodial Accounts and Section 8302.1(d) for Custodial Account documentation. The Seller must establish a separate Custodial Account for Renovation Funds which must be named “Freddie Mac Escrow Completion Custodial Account” or “Freddie Mac Renovation Funds Custodial Account.” With respect to the Escrow Custodial Account requirements in Section 8302.1(c)(iii), the Seller may not: ■ Designate the Custodial Account for Renovation Funds using the abbreviated designation “Freddie Mac Escrow Custodial Account” ■ Commingle Renovation Funds with Escrow Funds in the same Custodial Account Custodial Accounts for Renovation Funds are not subject to the tier rating requirements in Section 8302.2(c). (c) Changing or transferring Custodial Accounts for Renovation Funds See Sections 8304.3(b) through 8304.3(d) for Freddie Mac’s requirements for changing or transferring established Custodial Accounts, including Custodial Accounts for Renovation Funds. (d) Freddie Mac’s rights Freddie Mac reserves the right to request that the Seller submit copies of Custodial Account for Renovation Funds records, such as bank account statements, detailed trial balances and completed reconciliations, variance logs, and supporting documentation for such records. (e) Seller responsibilities related to maintaining the Custodial Account The Seller must manage Custodial Accounts for Renovation Funds as required in Sections 8304.1(c), 8304.2(a), 8304.2(c), 8304.2(e), 8304.3(b), 8304.3(c)(i), 8304.3(d) and 8304.4(a).

Source: Freddie Mac Single-Family Seller/Servicer Guide 4607.12 — Custodial Accounts for Renovation Funds for CHOICERenovation® Mortgages · source URL · snapshot 4c94f67729042dd6