Freddie Mac Single-Family Seller/Servicer Guide §5602.3 — Automated collateral evaluation (ACE) (05/06/26)
Freddie Mac Guide §5602.3 (Automated collateral evaluation (ACE)). Gap-fill (verbatim, ID-diff).
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide §5602.3 — Automated collateral evaluation (ACE) (05/06/26) — 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 5602.3
(05/06/26) This section contains requirements related to: ■ Automated collateral evaluation (ACE) overview ■ Process for qualifying for and accepting the ACE offer ■ Eligible Mortgages ■ Ineligible Mortgages ■ Conditions that prevent the Seller from accepting an ACE offer
Freddie Mac Guide 5602.3
602-8 ■ Acceptable age of the ACE offer ■ Data changes that impact ACE eligibility ■ ACE requirements for Settlement Dates more than 120 days after the Note Date ■ ACE eligibility in disaster areas ■ Seller representation of property review or valuation (a) ACE overview For certain Loan Product Advisor® Mortgages, the Seller may receive the option to accept an ACE offer and originate the Mortgage without an appraisal. If the Seller accepts the ACE offer, Freddie Mac will: ■ Accept the value of the Mortgaged Premises as: ❑ The purchase price of the Mortgaged Premises, for purchase transactions, or ❑ The estimated value of the Mortgaged Premises, for refinance transactions ■ Not exercise its remedies, including the issuance of repurchase requests, in connection with a breach of the Seller’s selling representations and warranties related to the value, condition and marketability of the Mortgaged Premises For refinance transactions, the Sellers must have written procedures in place that prohibit changes to the estimated value in Loan Product Advisor for the purpose of obtaining ACE or more favorable mortgage terms (e.g., avoiding mortgage insurance). The procedures must include a process for establishing the estimated value, which may include, but is not limited to, the use of the Borrower’s estimated value, an Automated Valuation Model (AVM) or an online valuation tool or website. (b) Process for qualifying for and accepting the ACE offer For a Mortgage to qualify for an ACE offer: ■ The Mortgage must be an Accept Mortgage ■ The Last Feedback Certificate must indicate the Mortgage is eligible for representation and warranty relief with ACE. (This represents the “offer.”)
Freddie Mac Guide 5602.3
602-9 ■ The final submission of the Mortgage to Loan Selling Advisor® must indicate the representation and warranty relief status is “Y” or “Yes” In lieu of accepting the ACE offer, the Seller may deliver the Mortgage with a PDR or an appraisal report if the eligibility requirements for ACE+ PDR or the selected appraisal type are met To accept the ACE offer, the Seller must deliver the Mortgage with the ULDD Data Points described in the data delivery instructions in Section 6302.10(c). (c) Eligible Mortgages To be eligible for an ACE offer, the Mortgage must: ■ Be secured by a 1-unit dwelling that is either a Primary Residence or a second home ■ Meet the following occupancy and maximum loan-to-value (LTV)/total LTV (TLTV) ratio requirements: Mortgage purpose Occupancy type Maximum LTV/TLTV ratios Purchase Primary Residence or second home 90% “No cash-out” refinance Primary Residence or second home 90% Cash-out refinance Primary Residence 70% Second home 60% (d) Ineligible Mortgages The following Mortgages are ineligible for ACE: ■ Mortgages for which an appraisal or a PDR has been obtained in connection with the Mortgage ■ Mortgages secured by one of the following: ❑ A Manufactured Home, or ❑ A leasehold estate
Freddie Mac Guide 5602.3
602-10 ■ Mortgages secured by Mortgaged Premises subject to resale restrictions (excluding those subject to age-based resale restrictions) ■ Mortgages secured by a property acquired in a Non-arm’s Length Transaction ■ Mortgages secured by a property where the property owner at the time of sale (i.e., the property seller) is a lender or a government entity ■ Mortgages with an estimate of value or purchase price greater than $1,000,000 ■ CHOICERenovation® Mortgages ■ Community Land Trust Mortgages ■ Construction to Permanent Mortgages ■ Cooperative Share Loans ■ Freddie Mac Enhanced Relief Refinance® Mortgages ■ GreenCHOICE Mortgages® ■ Renovation Mortgages ■ Seller-Owned Modified Mortgages that are Home Possible® Mortgages ■ Texas Equity Section 50(a)(6) and Texas Section 50(f)(2) Mortgages (e) Conditions that prevent the Seller from accepting an ACE offer Sellers may not accept the ACE offer if: ■ An appraisal is required by law or regulation ■ Rental income from an ADU on a subject 1-unit Primary Residence is used to qualify the Borrower ■ The Seller is aware, based on a review of the sales contract, property disclosure statement, property inspection, disclosure by the Borrower, etc., of an adverse physical property deficiency that warrants a PDR or an appraisal report being obtained. For purchase transaction Mortgages, the Seller must review the sales contract and, if provided, the property disclosure statement, for adverse physical property deficiencies. Examples of an adverse physical property deficiency that warrants a PDR or an appraisal report being obtained include, but are not limited to:
Freddie Mac Guide 5602.3
602-11 ❑ A contaminated site or hazardous substance that affects the property or the Neighborhood in which the property is located ❑ The property has a deficiency that is consistent with a C5 or C6 condition rating (e.g., active roof leak(s), damaged or failing foundation). Refer to Section 5605.5(a) for further information related to property condition. Note: Refer to Section 5603.3(a) for further information on property disclosure statements. (f) Acceptable age of the ACE offer The ACE offer provided through the Loan Product Advisor Feedback Certificate message is valid for 120 days. If the offer is more than 120 days old on the Note Date, resubmission to Loan Product Advisor is required to determine ongoing ACE eligibility. (g) Data changes that impact ACE eligibility If the Seller changes loan data (e.g., address of the property, loan amount, purchase price, estimate of value, loan type, property type, occupancy of the property, etc.) in a subsequent submission, the original offer will become invalid, and Loan Product Advisor may provide a different ACE eligibility determination. (h) ACE requirements for Settlement Dates more than 120 days after the Note Date If the Settlement Date is more than 120 days after the Note Date, the Seller must warrant that the value of the subject property as of the Settlement Date is no less than the estimated value or sales price submitted to Loan Product Advisor. (i) ACE eligibility in disaster areas Sellers may accept an ACE offer for properties located in disaster areas if the Seller can represent and warrant that the value and marketability of the Mortgaged Premises has not been adversely impacted. See Section 4407.1 for property condition requirements. (j) Seller representation of property review or valuation A Seller that has accepted an ACE offer must not make any representation that Freddie Mac has performed a property review or obtained a valuation of the Mortgaged Premises.