On July 25, Freddie Mac released Guide Bulletin 2018-12 (Bulletin), which, among other things, updates lender credit requirements to permit sellers to apply excess lender credit as a principal curtailment toward the mortgage when the amount exceeds the borrower’s closing costs. Effective immediately, Freddie Mac stated that this change to the Selling Guide also will include “situations where regulatory requirements do not permit reduction of the amount of the lender credit without re-disclosure to the [b]orrower, which may delay closing.”
Separately, the Bulletin also announces streamlined polices to Freddie Mac’s leasehold estate requirements. The updates are intended to make it simpler for sellers to determine eligibility for leasehold mortgages, and the changes include the elimination and simplification of certain requirements. Additionally, the Bulletin discusses changes to delivery instructions applicable to automated collateral evaluation appraisal waivers and homeownership education delivery instructions, and provides guidance concerning when contingent liability and assigned debt may be excluded from a borrower’s monthly debt payment-to-income ratio.