DocMagic has added Freddie Mac Form 490, Community Land Trust Ground Lease Rider (Form ID: 490.MSC) for use with loans secured by land leased through a Community Land Trust. The Rider is required as part of the documentation in order for such a loan to be salable to Freddie Mac.
Freddie Mac published Bulletin 2018-16 in 2018 with requirements for loans secured by property in a Community Land Trust. Community Land Trusts seek to preserve affordable housing by leasing land to a homebuyer who is able to purchase the improvements at a below market rate. Freddie Mac published new Seller/Servicer Guide Chapter 4502 to establish guidelines for these loans.
Loans must meet the following requirements:
- Borrowers must be eligible under the Community Land Trust's program requirements.
- The mortgage must be a first lien, conventional fixed-rate mortgage secured by a 1-unit primary residence that is not a manufactured home.
- Borrowers must execute a Community Land Trust Ground Lease and Freddie Mac form 490.
- The appraiser determines market value without consideration of restrictions in the Community Land Trust Ground Lease, which would be removed by Form 490 in the event of foreclosure, or deed-in-lieu-of foreclosure.
Users will be able to select Form 490 (490.MSC) by providing the Community Land Trust Indicator in the loan data. For additional information, please contact compliance@docmagic.com.
