Freddie Mac has announced the availability of standardized subordinate mortgage documents. After leading an effort to draft and review the documents, Freddie Mac has published the model forms on a new Freddie Mac subordinate lien document webpage. The webpage also provides additional information regarding the use of the standardized subordinate lien documents, including FAQs and links to additional lender information.
The model forms have been reviewed and agreed to by Fannie Mae and Freddie Mac for use by any Down Payment Assistance (“DPA”) provider, such as state and local housing finance agencies (“HFAs”). The forms can be used in the place of agency-specific forms with non-standard language. Although Fannie Mae and Freddie Mac do not purchase subordinate liens, the forms are being provided by Freddie Mac with the intent of bringing “market efficiencies and cost savings to HFAs, their participating lenders and DPA providers nationwide.”
The model forms include subordinate amortizing notes, subordinate forgivable fixed-rate notes and subordinate deferred payment notes. Model subordinate security instruments, subordinate MERS security instruments, and subordinate eNotes are also available for use.
Similar to Uniform Instruments, the model subordinate documents have a Freddie Mac/Fannie Mae tagline which must be removed if any changes are made to the forms, except for authorized changes listed on a state or local housing agency website, or per the requirements of applicable law or a housing finance agency program. Form instructions are included on the model form in red text.
DocMagic currently has Freddie Mac standardized subordinate mortgage documents available for use for the following states in connection with their DPA loans: California, Colorado, Idaho, Illinois, Massachusetts, Tennessee, and Washington.
Beginning on April 19, 2024, DocMagic make standardized forms available for all remaining model forms. This will including Florida specific subordinate notes and eNotes, along with multistate and Virginia specific eNotes. Standardized subordinate security instruments will also be available for the following states: Alabama, Arizona, Arkansas, Connecticut, Florida, Iowa, Nebraska, New Mexico, South Dakota, and Utah.
If you have any questions, please contact DocMagic’s Compliance Department.
