4202.6: Points and fees limitation (03/02/16)

Effective for Mortgages with Application Received Dates on or after January 10, 2014, Mortgages with points and fees exceeding 3% of the total loan amount (or such other applicable limits for lower balance Mortgages) as specified under the Truth-in-Lending Act and its implementing regulations, 12 C.F.R. 1026.43(e)(3), will not be eligible for sale to Freddie Mac. Sellers must use the points and fees calculation that is required for qualified mortgages under the Truth-in-Lending Act and its implementing regulations, 12 C.F.R. 1026.32(b) to determine compliance with applicable requirements.

However, Mortgages that exceed the points and fees thresholds stated above will be eligible for sale to Freddie Mac if the following conditions are met:

Such Mortgages are exempt from Regulation Z, 12 C.F.R. 1026.43(a) or are not subject to the Truth-in-Lending Act; and
The points and fees do not exceed 5% of the total loan amount. Sellers must use the points and fees calculation that is required for high-cost Mortgages under the Home Ownership and Equity Protection Act of 1994 and its implementing regulations, 12 C.F.R. 1026.32(b).

Mortgages with Application Received Dates prior to January 10, 2014 are not subject to the requirements in this section.