Super Conforming Mortgages
Updated November 12, 2009
Freddie Mac's super conforming mortgages are mortgages using the higher permanent maximum loan limits in certain high-cost areas established by the Housing and Economic Recovery Act of 2008 (HERA) and, mostly recently, the temporary higher maximum loan limits established by the American Recovery and Reinvestment Act of 2009 (ARRA).
Under ARRA, the loan limits in designated high-cost areas are the higher of the temporary loan limits established by the Economic Stimulus Act of 2008 (ESA) (maximum of $729,750 for 1-unit single-family properties) and the permanent loan limits established by HERA (maximum of $625,500 for 1-unit single-family properties). The Federal Housing Finance Agency (FHFA) determines the maximum loan limits
for all counties and makes this information available on its Web site.
These higher loan limits are intended to provide lenders with much-needed liquidity in the highest cost areas of the country, while also lowering mortgage financing costs for borrowers located in these areas.
Loan Limits*
The following minimum and maximum original loan amounts apply to super conforming mortgages sold to Freddie Mac with note dates on or after October 1, 2008, and on or before December 31, 2010:
| Units |
Minimum/Maximum Original Loan Amount |
Properties in Alaska, Hawaii, Guam and the U.S Virgin Islands |
| Minimum Loan Amount |
Maximum Loan Amount |
Minimum Loan Amount |
Maximum Loan Amount |
Permanent
HERA |
Temporary
ARRA |
Permanent
HERA |
Temporary
ARRA |
| 1 |
>$417,000 |
$625,500 |
$729,750 |
>$625,500 |
$938,250 |
$1,094,625 |
| 2 |
>$533,850 |
$800,775 |
$934,200 |
>$800,775 |
$1,201,150 |
$1,401,350 |
| 3 |
>$645,300 |
$967,950 |
$1,129,250 |
>$967,950 |
$1,451,925 |
$1693,900 |
| 4 |
>$801,950 |
$1,202,925 |
$1,403,400 |
>$1,202,925 |
$1,804,375 |
$2,105,100 |
*These are the maximum potential loan limits for designated high-cost areas. Actual loan limits are established for each county (or equivalent) and the loan limits for specific high-cost areas may be lower. The original principal balance of a mortgage must not exceed the maximum loan limit for the specific area in which the mortgaged premises is located. Sellers must use the loan amount of the mortgage stated in the note to determine compliance with the maximum loan limits stated above.
Super Conforming Mortgage Requirements
Eligible Products, Purpose and Occupancy Requirements |
| Products |
- 15-, 20-, and 30-year fixed-rate mortgages, fully amortizing
- Initial InterestSM fixed-rate mortgages with a 10-year or greater interest-only payment period
- 5/1, 7/1 and 10/1 adjustable-rate mortgages (ARMs), fully amortizing
- Initial Interest 5/1, 7/1 and 10/1 ARMs with a 10-year interest-only payment period
|
| Purpose |
- Purchase transactions
- No cash-out refinances
- Cash-out refinances
|
| Property Type |
- 1- to 4-unit primary residences
- Second homes
- 1- to 4-unit investment properties
|
Eligibility and Underwriting Requirements |
| Loan Characteristic |
Requirements |
| LTV/TLTV/HTLTV Ratio Requirements |
|
| Loan Prospector Assessment |
- Loan Prospector® Accept or Caution-eligible for A-minus assessment required for loan amounts up to $1 million.
- Initial Interest Mortgages must receive an Accept credit risk class and comply with Guide Chapter J33.
- Manual underwriting is required for Loan Prospector Caution mortgages and for all mortgages with loan amounts greater than $1 million. In addition to the requirements in Guide Chapter 37, manually underwritten mortgages must meet the minimum Indicator Score requirements in Guide Chapter L33.
|
| Additional Underwriting Requirements |
- The borrower's credit reputation is acceptable if:
- The mortgage receives a Risk Class of Accept
- The mortgage receives a Risk Class of Caution-eligible for A-minus and all requirements in Chapter C33 for A-minus Mortgages are met.
- Noncredit payment references are prohibited
- If the mortgage receives a Loan Prospector risk evaluation status of invalid, ineligible or incomplete, the Seller must take all steps possible in accordance with Guide Section 2.2.1 to correct the information and resubmit the mortgage.
- Super conforming mortgages with original loan amounts of $1 million or less that have never been submitted to Loan Prospector are not eligible for delivery.
- For manually underwritten super conforming mortgages, the maximum debt-to-income ratio is 45 percent.
|
| Appraisals and collateral documentation requirements |
- The Seller must obtain an appraisal with an interior and exterior inspection that meets Freddie Mac requirements.
- A field review is required when the LTV/TLTV/HTLTV ratios are greater than 75 percent and the value of the mortgaged premises is $1 million or greater.
- When the Field Review Report results in a different value, the lowest of the original appraised value, field review value or sales price must be used to calculate the LTV/TLTV/HTLTV ratio and the lower of the appraised value or field review value must be delivered in the appraised value field on the Form 11, Mortgage Submission Schedule, or Form 13SF, Mortgage Submission Voucher.
- The appraiser performing the appraisal must be qualified to perform appraisals without oversight or supervision by a "supervisory" or "review" appraiser and must be experienced with the types of properties that are eligible for super conforming financing.
- Super conforming mortgages secured by Condominium Unit Mortgages are not eligible for Streamlined Reviews outlined in Guide Section 42.4.
|
| Mortgage Insurance (MI) |
- Standard mortgage insurance is required.
- Lender-paid mortgage insurance with single premiums is permitted.
|
| Ineligible Products and Features |
- Balloon/Reset Mortgages
- Initial Interest Mortgages with interest only periods less than 10 years
- ARMs with initial periods of less than 5 years
- Convertible ARMs
- Renovation Mortgages
- Alt 97® Mortgages
- Mortgages secured by manufactured homes
- Home Possible® Mortgages and any affordable mortgages, including mortgages originated under a Seller’s proprietary program
- Seller-Owned Converted Mortgages
- Seller-Owned Modified Mortgages
- FHA/VA Mortgages
- Rural Housing Service Section 502 GRH Mortgages
- Section 184 Native American Mortgages
- Newly Built Home Mortgages
- Construction Conversion Mortgages
- Affordable Merit Rate® Mortgages
- Mortgages using the Home Value Models
- Mortgages with documentation greater than 120 days before the Note Date
- Participation Mortgages
- Mortgages sold through MIDANET®
- 40-year fixed rate mortgages
- Mortgages with flexible mortgage insurance options
- Mortgages with financed mortgage insurance premiums
- Mortgages with annual or monthly lender-paid mortgage insurance premiums
- Loan Prospector mortgages with an original loan amount greater than $1 million
|
| Eligible Executions |
- Guarantor, Cash and MultiLender sale paths through the selling system only.
- Bulk guarantor securities transaction capabilities.
- Guarantor transactions of fixed-rate mortgages are TBA eligible as long as super conforming mortgages do not exceed 10 percent of the unpaid principal balance of all mortgages in the applicable pool and other applicable de minimus requirements are met.
- Best efforts commitment option is not available at this time.
|
| Delivery Requirements |
- Super conforming mortgages may only be delivered through the selling system.
- For deliveries of 15-, 20- and/or 30-year fixed-rate mortgages under fixed-rate cash contracts, the aggregate unpaid principal balance (UPB) of all super conforming mortgages delivered by the Seller during any month must not exceed the greater of (i) $2 million, or (ii) 10% of the aggregate UPB of all fixed-rate mortgages delivered by the Seller under fixed-rate cash contracts during such month.
- Fixed-rate cash contracts exceeding the above requirements for super conforming mortgages will be assessed an over funding fee based on a percentage of the total conforming and super conforming mortgages funded each month as follows:
- If super conforming mortgages exceed 10 percent of your total monthly cash funding up to and including 15 percent, you will be assessed a 150 basis point over funding fee on the UPB exceeding 10 percent.
- If super conforming mortgages exceed 15 percent of your total monthly cash funding, you will be assessed the above fee plus a 350 basis point over funding fee on the portion of the UPB exceeding 15 percent.
- Sellers with total monthly cash funding of less than $20 million will be assessed an over funding fee when the aggregate unpaid principal balance (UPB) of all fixed-rate super conforming mortgages funded during any calendar month exceeds $2 million.
- When the $2 million super conforming threshold is exceeded, Sellers will be assessed a 150 basis point over funding fee on the UPB exceeding the $2 million threshold up to $300,000.
- An additional 350 basis point over funding fee will be assessed on the portion of the UPB that exceeds $300,000.
- Fixed rate super conforming mortgages may not be pooled in mini-Gold PC pools.
- Review Guide Section 17.44 for more information on delivery and pooling requirements for super conforming mortgages.
|
| Delivery Fees |
- Super conforming mortgages will have the standard guarantee-fee plus applicable current Guide Exhibit 19 delivery fees plus unique super conforming mortgage postsettlement delivery fees.
|
| Servicing Requirements |
| Servicing |
- There are no unique servicing requirements related to the servicing of super conforming mortgages. All Guide servicing requirements apply including Section 51.11 (c) requirements.
|
Note:
- For additional details on requirements for super conforming mortgages refer to Guide Chapter L33
- Where these requirements are silent, the minimum requirements in our Guide apply.
- If there is a conflict between any of the requirements for super conforming mortgages and any other Guide-permitted product or offering, the more restrictive requirement(s) apply.
|
Minimum Indicator Scores for Manually Underwritten Super Conforming Mortgages
Super conforming mortgages with loan amounts greater than $1 million and mortgages that receive a Loan Prospector Credit Risk Class of Caution must be manually underwritten and meet our LTV/TLTV/HTLTV ratio and minimum Indicator Score requirements .
Note: Initial Interest Mortgages may not be manually underwritten per Chapter J33 of the Guide.
Pricing
Pricing for super conforming mortgages will be as follows:
Learn more about Freddie Mac Super Conforming Mortgages:
