Repair Requirement Updates
April 23, 2015
Effective April 30, we will be making a number of changes to streamline our repair requirements with the objective to lessen the administrative effort in managing repair reserves and repair completions, and to reduce the number of extension requests associated with these requirements.
The following changes will go into effect April 30:
- Reduce the number of required funded repair reserves: Funding of repair reserves will only be required if the total Priority Repair cost exceeds $25,000 or 0.25% of the loan amount, whichever is greater (Priority Repairs include all life safety hazards, code violations, material deficiencies and significant deferred maintenance items).
- Limit the number of due dates for repair completions to:
- Within 90 days: for imminent life/safety risks and conditions causing substantive damage to the property (referred to as “PR-90 repairs”);
- Within 180 days: most other repairs as coordinated with the borrower, and;
- Within 12 months: on a case-by-case basis, following discussion with Freddie Mac, repairs the borrower will be unable to complete within 180 days.
- Increase reporting by Property Condition consultants: Require Property Condition consultants to identify the most urgent Priority Repairs that need to be completed within 90 days.
- Add inspection verification for all Priority Repairs during the first annual servicing inspection for those repairs not previously visually verified.
Repair requirements will continue to be documented in Repair Riders and Repair Reserve Riders, as applicable.
Please note that we will be offering a webinar providing more detail on these changes to our requirements:
Revisions to our Repair Requirements
Thursday, April 30, from 2:00 p.m. - 3:00 p.m. ET
If you have any questions about these updates, please contact your Freddie Mac representative.