Freddie Mac Single-Family Seller/Servicer Guide Section 4701.1 — Mortgage insurance

Freddie Mac Single-Family Seller/Servicer Guide Section 4701.1 — Mortgage insurance

4701.1: Mortgage insurance (02/04/26) This section contains requirements related to: ■ Mortgage insurance coverage options ■ Custom mortgage insurance options ■ Mortgaged Premises located in the State of New York ■ MI master policy and approved insurers ■ Credit Fees Mortgage insurance is required for each conventional Mortgage Freddie Mac purchases that has a loan-to-value (LTV) ratio of more than 80%. The LTV ratio is obtained by dividing the original loan amount by the value, as defined in Section 4203.1(a). (a) Freddie Mac’s mortgage insurance coverage options Freddie Mac offers two mortgage insurance coverage options: ■ Standard mortgage insurance ■ Custom mortgage insurance The standard and custom coverage levels apply as stated in the table below. Standard and custom mortgage insurance coverage levels Transaction type Mortgage insurance coverage LTV ratio > 80% and ≤ 85% > 85% and ≤ 90% > 90% and ≤ 95% > 95% and ≤ 97% Fixed rate, term ≤ 20 years Standard 6% 12% 25% 35% Custom* N/A N/A 16% 18% Standard 12% 25% 30% 35% Freddie Mac Single-Family Seller/Servicer Guide Chapter 4701 As of 02/04/26 Page 4701-2 Standard and custom mortgage insurance coverage levels Transaction type Mortgage insurance coverage LTV ratio > 80% and ≤ 85% > 85% and ≤ 90% > 90% and ≤ 95% > 95% and ≤ 97% ■ Fixed rate, term > 20 years ■ ARMs1; and ■ Manufactured Homes1 Custom* 6% 12% 16% 18% Home Possible® Mortgages, fixed rate, term ≤ 20 years Standard 6% 12% 25% 25% Custom* N/A N/A 16% 18% Home Possible Mortgages: ■ Fixed rate, term > 20 years ■ ARMs1; and ■ Manufactured Homes1 Standard 12% 25% 25% 25% Custom* 6% 12% 16% 18% 1Except for Mortgages secured by a CHOICEHome® as described in Section 5703.12, Manufactured Homes and ARMs are limited to a maximum LTV ratio of 95%. *If custom mortgage insurance is chosen, in addition to all other applicable Credit Fees, the custom mortgage insurance Credit Fee in Price in Exhibit 19, Credit Fees, applies, including on Home Possible Mortgages. (b) Custom mortgage insurance options The custom mortgage insurance option provides an alternative to standard mortgage insurance coverage. Custom mortgage insurance is available only for Accept Mortgages. Custom mortgage insurance may not be financed as part of the principal amount of the Mortgage. (c) Mortgaged Premises located in the State of New York For Mortgaged Premises located in the State of New York, the “value” is the appraised value of the Mortgaged Premises on the Note Date of the Mortgage and is used solely for the purpose of determining whether mortgage insurance is required or should be canceled. This Freddie Mac Single-Family Seller/Servicer Guide Chapter 4701 As of 02/04/26 Page 4701-3 definition of the “value” of Mortgaged Premises located in the State of New York applies only to the above-stated mortgage insurance requirements and is not applicable for any other purposes under the terms of the Purchase Documents. After determining that mortgage insurance is required, the definition of “value” from Section 4203.1(a) should be used for the purposes of selecting the appropriate mortgage insurance coverage level. Note: For special requirements related to Cooperative Share Loans when the Cooperative Unit is located in the state of New York, see Section 4701.5. (d) MI master policy and approved insurers The Mortgage must be insured by an approved private MI or State housing finance agency that is approved to insure Mortgages as of the Delivery Date of the Mortgage (see Exhibit 10, Freddie Mac-Approved Mortgage Insurers). The Mortgage must be insured under an approved master policy or loan loss reserve agreement in accordance with Exhibit 10. Mortgage insurance coverage must continue to be carried with the MI that insured the Mortgage, except as provided for transfers of mortgage insurance coverage in Section 8203.5(b). The required mortgage insurance must be in full force and effect as of the Delivery Date and remain in force until canceled in accordance with the requirements of Sections 8203.2 through 8203.4(c) or pursuant to applicable law. Mortgage insurance coverage must not be subject to any exclusion besides those exclusions stated in the relevant master policy or loan loss reserve agreement. Coverage must run to the benefit of Freddie Mac for a whole loan or a participation loan insured under a participation policy or to the Seller for any other insured participation loan. No action may have been taken, or no action may have failed to be taken, that would impair the rights of Freddie Mac or the Seller. Participation policies with provisions inconsistent with this section or that impose premium payment or reporting requirements on Freddie Mac are not acceptable. The Seller warrants that the Borrower has been given all disclosures required by law, including, but not limited to, the Homeowners Protection Act of 1998 (HPA), as amended, relating to the terms on which Borrower-paid mortgage insurance may be canceled. This includes all disclosures required by the HPA at loan origination to describe the Borrower’s mortgage insurance cancelation rights under the HPA. (e) Credit Fees Mortgages sold to Freddie Mac with mortgage insurance coverage lower than the standard levels shown in Section 4701.1(b) will be assessed the Custom Mortgage Insurance Option Credit Fee in Price, as described in Exhibit 19.

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