Freddie Mac Single-Family Seller/Servicer Guide 5704.2 — Appraisal requirements for leasehold Mortgages
Freddie Mac Single-Family Seller/Servicer Guide section 5704.2 — Appraisal requirements for leasehold Mortgages. Full verbatim section text, substring-verified against snapshot 5869ee9e606cd4ae.
Verbatim regulatory text
Verbatim provisions from Freddie Mac Single-Family Seller/Servicer Guide 5704.2 — Appraisal requirements for leasehold Mortgages — 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 Single-Family Seller/Servicer Guide 5704.2 — Appraisal requirements for leasehold Mortgages (part 1 of 2)
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. In addition to the other Guide requirements related to appraisals, an appraisal for each leasehold Mortgage must meet the requirements in this section. Note: For special appraisal requirements for HeritageOne® Mortgages that are leasehold Mortgages, see Section 4504.9. For leasehold Mortgages, the appraiser must develop a detailed description of the terms, conditions and restrictions of the ground lease. The appraiser must consider and report any effect the terms of the lease have on the value and marketability of the Mortgaged Premises. When there are similar leasehold sales available that have the same lease terms, the appraiser should use these sales as comparable sales. If sales of properties with the same lease terms are not available, the appraiser should use other similar leasehold sales having different lease terms as comparable sales. The appraiser must describe the differences in the terms of the leases and report any effect the differences have on the value and marketability of the Mortgaged Premises. If there are no sales of leasehold properties, the appraiser should use sales of similar properties owned in fee simple as comparable sales. The appraiser must explain why the use of sales with different property rights is appropriate and make appropriate adjustments to reflect the market’s reaction to these differences. For Condominium Projects and Planned Unit Developments (PUDs) on leasehold estates, the appraiser must also: ■ Provide a description of the Common Elements, including Amenities ■ Comment on the ground rent for the subject property and the competing properties
Freddie Mac Single-Family Seller/Servicer Guide 5704.2 — Appraisal requirements for leasehold Mortgages — PENDING VERSION, takes effect 2026-11-02
Not yet in force. This is the pending version of the section, which takes effect 2026-11-02. The other version on this page governs until then.
Mortgages (Future effective date 11/02/26) In addition to the other Guide requirements related to appraisals, an appraisal report for each leasehold Mortgage must meet the requirements in this section. Note: For special appraisal requirements for HeritageOne® Mortgages that are leasehold Mortgages, see Section 4504.9. For leasehold Mortgages, the appraisal report must include the ground rent and the conditions and restrictions of the ground lease. The appraisal report must report the effect the terms of the lease have on the value and marketability of the Mortgaged Premises. When there are similar leasehold sales available that have the same lease terms, these sales should be used as comparable sales. If sales of properties with the same lease terms are not available, other similar leasehold sales having different lease terms should be used as comparable sales. The appraisal report must include a description of the differences in the terms of the leases and report the effect the differences have on the value and marketability of the Mortgaged Premises. If there are no sales of leasehold properties, the appraisal report should include sales of similar properties owned in fee simple as comparable sales. The appraisal report must include an explanation why the use of sales with different property rights is appropriate and appropriate adjustments must be made to reflect the market’s reaction to these differences. For Condominium Projects and Planned Unit Developments (PUDs) on leasehold estates, the appraisal report must also include: ■ A description of the Common Elements, including Amenities ■ Commentary on the ground rent for the subject property and the competing properties
Operationalizing Freddie Mac Single-Family Seller/Servicer Guide 5704.2 — Appraisal requirements for leasehold Mortgages
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Source of record: https://claudeforcompliance.com/regs/fhlmc-5704-2/
· register fhlmc-5704-2 · Claude for Compliance. Free to read and download;
see regulatory updates and methodology.