Freddie Mac Single-Family Seller/Servicer Guide Section 8304.2 — Maintaining Custodial Accounts

Freddie Mac Single-Family Seller/Servicer Guide Section 8304.2 — Maintaining Custodial Accounts

8304.2: Maintaining Custodial Accounts (09/10/25) This section contains requirements related to: ■ Investing custodial account funds ■ Maintaining the Principal and Interest Custodial Account balance ■ Maintaining the Escrow Custodial Account balance ■ Maintaining the Buydown Custodial Account ■ Monitoring depository eligibility (a) Investing custodial account funds The Servicer may not invest funds deposited into any Freddie Mac Custodial Account. (b) Maintaining the Principal and Interest Custodial Account balance The Servicer must: ■ Maintain Freddie Mac funds separately from the Servicer’s general ledger account; a general ledger account is not a substitute for a Demand Deposit account ■ Deposit all Freddie Mac funds into a Demand or Interest-Bearing Deposit Account in accordance with Section 8302.1(b) ■ Ensure that funds are available for Freddie Mac to draft principal and interest or payoff amounts. If the funds available in a Principal and Interest Custodial Account are less than the amount due to Freddie Mac on the applicable draft date, the Servicer must advance its funds so that the amount due to Freddie Mac is available before the applicable draft date. ■ Maintain a positive daily balance in the Principal and Interest Custodial Account(s) at all times ■ Perform a consolidated reconciliation if the Servicer has more than one Principal and Interest Custodial Account under a specific Seller/Servicer number The Servicer may recover any funds it advanced for the payment of delinquent net yield interest from subsequent collections of Principal and Interest Payments. (c) Maintaining the Escrow Custodial Account balance The Servicer must: Freddie Mac Single-Family Seller/Servicer Guide Chapter 8304 As of 09/10/25 Page 8304-4 1. Establish and maintain at least one Escrow Custodial Account for each Seller/Servicer number, even if the Servicer does not collect Escrow Funds for Mortgages serviced under that number 2. Maintain the Escrow Funds separately from the Servicer’s general ledger account; a general ledger account is not a substitute for a Demand Deposit Account 3. Deposit all Freddie Mac funds into a Demand or Interest-Bearing Deposit Account in accordance with Section 8302.1(b) 4. Ensure that each Borrower’s vested interest is ascertainable at all times 5. Ensure that funds are available for remittances before disbursing funds to third parties 6. Maintain a positive daily balance in the Escrow Custodial Account(s) at all times 7. Perform a consolidated reconciliation if the Servicer has more than one Escrow Custodial Account under a specific Seller/Servicer number 8. Deposit an advance from the Servicer’s funds to the Escrow Custodial Account for any shortages on the same day the shortage occurs and before making any disbursements. The Servicer must not use the overages of one Borrower account to fund the negative Escrow or shortage of other Borrower accounts. The Servicer may recover any Escrow advance from subsequent payments to the Escrow Custodial Account of the specific Mortgage for which the Servicer made the advance. (d) Maintaining the Buydown Custodial Account Servicers may deposit buydown funds into the Escrow Custodial Account, or the Servicer may, at its option, open a separate Custodial Account for buydown funds. If the Servicer establishes a separate Buydown Custodial Account, the Servicer must comply with the requirements regarding Custodial Accounts generally, and the maintenance and reconciliation of Escrow Custodial Accounts set forth in the Guide for such Buydown Custodial Accounts. (e) Monitoring depository eligibility The Servicer must maintain all Custodial Accounts in an Eligible Depository at all times. The Servicer must have its own oversight process to continually monitor its depository to ensure it is viable and in good standing and meets the requirements of Section 8302.2(b). The Servicer’s obligation to transfer funds to an Eligible Depository is not dependent upon notification from Freddie Mac. The Servicer may determine a depository’s eligibility by subscribing to any of the rating services referenced in Section 8302.2(c) or by contacting Freddie Mac Single-Family Seller/Servicer Guide Chapter 8304 As of 09/10/25 Page 8304-5 [email protected]. In addition, the Servicer may determine a depository’s ineligibility based on actual knowledge. If the Servicer determines that a depository is no longer eligible, it must: 1. Open new Custodial Accounts within 30 days from the release date of the ratings that make the depository ineligible 2. Meet the requirements listed in Sections 8304.3(c) and 8304.3(d) for changing or transferring accounts 8304.3: Transferring or changing Custodial Accounts (09/10/25) This contains information related to: ■ Freddie Mac's right to remove accounts from specified depositories ■ The Servicer’s right to change or transfer accounts ■ Requirements for changing or transferring accounts ■ Liability for Custodial Account transfer costs (a) Freddie Mac's right to remove accounts from specified depositories Freddie Mac reserves the right to determine, at Freddie Mac’s sole discretion, that the Servicer may no longer deposit or hold Principal and Interest Payments and Escrow Funds in a particular depository. Freddie Mac’s exercise of its rights under this section means that it may expressly prohibit a Servicer from maintaining Custodial Accounts with a particular depository. If Freddie Mac determines that a depository no longer meets Freddie Mac’s requirements, Freddie Mac will give the Servicer written notice to remove the Custodial Accounts. The Servicer must comply with all requirements of the notice and take the following actions: ■ Close the Custodial Accounts within the time frame as specified in the notice ■ Open new Custodial Accounts in accordance with the requirements of Section 8304.3(c) in an Eligible Depository other than the depository specified in the notice (b) The Servicer’s right to change or transfer accounts Freddie Mac Single-Family Seller/Servicer Guide Chapter 8304 As of 09/10/25 Page 8304-6 The Servicer may choose to change Custodial Accounts or transfer them to another Eligible Depository. If the Servicer chooses to do so, it must adhere to the requirements of Section 8304.3(c). (c) Requirements for changing or transferring accounts Changes to or transfers of Custodial Accounts may result from any of the following circumstances: ■ The ineligibility of a depository according to the requirements of Section 8304.2(e) ■ A written notice from Freddie Mac to remove the account according to the requirements of Section 8304.3(a) ■ The Servicer’s choice to change or transfer the account according to the requirements of Section 8304.3(b) ■ A change to the depository’s name, account number or bank routing number (i) Custodial Account The Servicer must meet the requirements of Sections 8302.1(b) through 8302.1(d), 8302.2(b) and 8302.2(c) to change or transfer any Custodial Account. (ii) Remittance drafting account In addition to meeting the requirements above, if there is any change or transfer that affects the Custodial Account the Servicer chose as a remittance drafting account, the Servicer must also: 1. Contact Freddie Mac (see Directory 1) 2. Submit the documentation required by Section 8302.1(d) at least 15 Business Days before the Servicer plans to use the new account or modified bank routing instruction 3. Continue to use the existing account or bank routing instructions until Freddie Mac gives the Servicer written authorization to use the new account or modified bank routing instructions 4. Transfer funds from the former Custodial Account to the new Custodial Account when the Servicer receives Freddie Mac’s written notice that Freddie Mac has processed the new remittance instructions If Freddie Mac drafts and funds are not available because the Servicer changed its drafting account without receiving Freddie Mac’s written authorization, the Servicer will Freddie Mac Single-Family Seller/Servicer Guide Chapter 8304 As of 09/10/25 Page 8304-7 be subject to an interest reimbursement compensatory fee as set forth in Section 8303.5(g). (d) Liability for Custodial Account transfer costs Freddie Mac will not be liable to the Servicer for any costs, fees, penalties, loss of interest income or any other expenses directly or indirectly resulting from the transfer of any Custodial Account from one depository to another. Refer to Sections 8304.2(e) through 8304.3(b). This applies whether Freddie Mac requires the Servicer, or the Servicer chooses, to transfer the Custodial Account.

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