Freddie Mac Single-Family Seller/Servicer Guide §5601.5 — Eligibility of a property with mixed-use (01/26/26)
Freddie Mac Guide §5601.5 (Eligibility of a property with mixed-use). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §5601.5 — Eligibility of a property with mixed-use (01/26/26) — 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.
Freddie Mac Guide 5601.5
(01/26/26) Refer to Bulletin 2025-7, which announced the policy requirements for Uniform Appraisal Dataset (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal® appraisal reports that use UAD 3.6 before the mandatory effective November 2, 2026 version of this section. Freddie Mac purchases Mortgages secured by residential properties with mixed-use characteristics. This section contains: ■ Eligibility requirements ■ Appraiser requirements (a) Eligibility requirements A residential property with mixed-use must meet the following requirements: ■ The property must be a 1-unit Primary Residence ■ The property must be located in a predominantly residential Neighborhood, be primarily residential in nature based on the characteristics of the property and be typical for the properties in the Market Area ■ The mixed-use must represent a legal, permissible use of the property under the local zoning requirements ■ If the property has a commercial use, the Borrower must be the owner and the operator of the business
Freddie Mac Guide 5601.5
601-23 ■ The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residence ■ The commercial use must not have an adverse effect on the habitability and safety of the property or site (b) Appraiser requirements The appraiser must provide the following when appraising a mixed-use property: ■ An appraisal with an interior and exterior inspection ■ A detailed description of any accommodations made for the commercial use of the subject property ■ A discussion of any positive or adverse impacts of the commercial use and whether the cost to restore the property to solely residential use will affect its value ■ A statement describing any market resistance to the commercial use and adjustments for any commercial features made to the comparable sales ■ An opinion of market value based on the property’s residential nature Note: See Section 5701.8(b)(ii) for Condominium Unit live-work requirements.
Freddie Mac Guide 5601.5
Eligibility of a property with mixed-use (Future effective date 11/02/26) Freddie Mac purchases Mortgages secured by residential properties with mixed-use characteristics. This section contains: ■ Eligibility requirements ■ Appraisal report requirements (a) Eligibility requirements A residential property with mixed-use must meet the following requirements: ■ The property must be a 1-unit Primary Residence ■ The property must be located in a predominantly residential Neighborhood, be primarily residential in nature based on the characteristics of the property and be typical for the properties in the Market Area
Freddie Mac Guide 5601.5
601-24 ■ The mixed-use must represent a legal, permissible use of the property under the local zoning requirements ■ If the property has a commercial use, the Borrower must be the owner and the operator of the business ■ The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residence ■ The commercial use must not have an adverse effect on the habitability and safety of the property or site (b) Appraisal report requirements The Seller must deliver a Traditional Appraisal Report or Hybrid Appraisal Report that includes: ■ The type(s) of non-residential use observed on the property ■ Identification of whether the use is adverse, beneficial or neutral. If the use is adverse or beneficial, a description of the impact to value or marketability is required ■ Commentary related to whether the cost to restore the property to solely residential use will affect its value ■ Commentary describing any market resistance to the commercial use ■ Adjustments to the comparable sales related to the commercial use ■ An opinion of market value based on the property’s residential use Note: See Section 5701.8(b)(ii) for Condominium Unit live-work requirements.
Freddie Mac Guide 5601.5
Eligibility of a property with two or more adjoining parcels (01/26/26) Refer to Bulletin 2025-7, which announced the policy requirements for Uniform Appraisal Dataset (UAD) 3.6. Sellers may submit to the Uniform Collateral Data Portal® appraisal reports that use UAD 3.6 before the mandatory effective November 2, 2026 version of Section 5605.4. When the Mortgaged Premises includes two or more parcels of real estate, the following requirements apply:
Freddie Mac Guide 5601.5
601-25 ■ The parcels must be adjoining. Exception: Parcels that would otherwise be adjoined but are separated by a road (e.g., a waterfront property where the parcel without the residence offers access to the water) are eligible if the parcel without the residence is non-buildable but may include non-residential improvements such as a garage or dock and the Seller provides evidence in the Mortgage file that the parcel without the residence cannot be improved with a dwelling. ■ The Mortgaged Premises must contain only one residence. (An ADU is allowed only on the parcel that contains the residence if the eligibility requirements of Section 5601.2 are met.) ■ The Mortgage must be a valid First Lien on each parcel ■ Each parcel must have the same basic zoning (e.g., residential or agricultural) ■ Each parcel must be conveyed in its entirety ■ The site description must accurately describe the land and any improvements included on each of the parcels ■ The residence or improvements may be built across the lot lines ■ Non-residential improvements such as garages or outbuildings are acceptable on any parcel In addition, the appraiser must consider how the existence of two or more parcels, adjoining or not, influence the value use and marketability of the property.
Freddie Mac Guide 5601.5
Eligibility of a property with two or more adjoining parcels (Future effective date 11/02/26) Effective November 2, 2026, Section 5601.6 is deleted. See Section 5605.4 for information related to eligibility of a property with two or more adjoining parcels.
Freddie Mac Guide 5601.5
Seller verification of subject property Owner of Record (05/06/26) This section contains requirements related to: ■ Verifying the Owner of Record ■ Investigating and documenting Owner of Record discrepancies
Freddie Mac Guide 5601.5
601-26 (a) Verifying the Owner of Record The Seller must verify the information outlined in the table below: Owner of Record verification by transaction type Transaction type The Seller must verify: Purchase ■ The property seller listed on the sales contract is the Owner of Record of the subject property; or ■ If the transaction involves the sale of land separate from the dwelling, the property seller listed on the sales contract for the land is the Owner of Record for the land Refinance The Borrower is an Owner of Record of the subject property. Payoff of a land contract ■ The property seller is the vendor on the recorded land contract and the Owner of Record of the subject property; and ■ The Borrower is a vendee on the recorded land contract (b) Investigating and documenting Owner of Record discrepancies If the property seller for purchase transactions or the Borrower for refinance transactions is not the Owner of Record, the Seller must investigate the circumstances of the transaction to ensure the transaction is legitimate. If the Seller determines the transaction is legitimate, the Seller must retain in the Mortgage file documentation evidencing the verification or legitimacy of the transaction, which may include: ■ The appraiser’s analysis and conclusions in the appraisal report ■ A property sales history report ■ A copy of the recorded deed ■ A copy of a property tax bill ■ A copy of property title information indicating legal ownership of the property (e.g., title property report summary, title commitment or binder, attorney opinion of title letter)
Freddie Mac Guide 5601.5
602-1 Chapter 5602: Collateral Representations and Warranties, Loan Collateral Advisor® and Automated Collateral Evaluation (ACE and ACE+ PDR)