Requirements for Seller and Warehouse Lender Relationships
Freddie Mac has certain eligibility and delivery requirements for when Sellers opt to use a warehouse lender to fund mortgages. The key requirements include:
- Certificate of Incumbency* – Warehouse lenders must provide Freddie Mac with a certificate of incumbency that meets the following requirements:
- Form 990SF, Warehouse Provider Certificate of Incumbency: Corporation or Limited Liability Company Certificate
- When applicable, Form 990ASF, Warehouse Provider Addendum to Certificate of Incumbency: Corporation or Limited Liability Company Certificate
- A copy of resolutions by the board of directors or other governing body, as applicable.
Freddie Mac will not fund mortgages through a warehouse lender that does not have a proper certificate of incumbency.
*Effective February 1, 2012
- Form 996/996E**, Warehouse Provider Release and Transfer, is required for mortgages subject to warehousing financing. Form 996/996E must be delivered for every purchase contract subject to warehousing financing, whether for cash or securities executions. It is important to note the following:
- In order to provide Freddie Mac with instructions (or to modify instructions) to transfer funds on behalf of the warehouse lender, the person who executes Form 996/996E must be designated or authorized by the warehouse lender on Form 990SF.
- The form must be delivered to Freddie Mac by the warehouse lender, not by the Seller. The warehouse lender must sign Form 996/996E.
- The form must include Appendix 1 that provides the information about the mortgages covered in the purchase contract. This required information includes the Freddie Mac contract number and loan number, Seller's loan number, and borrower name, address of mortgaged properties and the unpaid principal balance.
- For certain financing arrangements, Freddie Mac may require parties to enter into a separate Form 996 addendum.
- Form 987E**, Wire Transfer Authorization for Warehouse Delivery – For Cash executions, Sellers must submit this form for each warehouse lender they use or for any change made to the wire transfer instruction.
- The person executing Form 987/987E must be designated or authorized on the Seller's certificate of incumbency form, otherwise Freddie Mac will not set up the requested warehouse lender.
- The warehouse lender's federal tax ID and full legal name submitted by the Seller on Form 987/987E, must match the information provided by the warehouse lender on the Form 990SF/990ASF.
- Important Note: Sellers with existing wiring instructions for specific warehouse lenders will need to submit a new Form 987/987E beginning November 1, 2011, but no later than February 1, 2012, to able to continue using their warehouse lenders for loans sold to Freddie Mac.
**Forms 996 and 987 are for deliveries through the Loan Delivery Portal. Forms 996E and 987E are for deliveries through Loan Selling AdvisorSM.
For More Information
- Single-Family Seller/Servicer Guide Chapter 6305, Warehouse Financing Requirements, for detailed requirements.
- Contact our 800-FREDDIE representatives who are available 8:00 a.m. – 8:00 p.m. ET, Monday through Friday, following the steps outlined below:
- Select "1" for Freddie Mac business partner
- Select "3" for Loan Delivery
- When prompted for a Seller/Servicer number, enter '555555' to indicate that you are a warehouse lender
- Be ready to provide your institution's federal tax ID number