Freddie Mac published a Guide Bulletin on April 21 that summarizes recent changes to the Guide and rolls out a new Conventional Small loan product. These changes impact property inspection requirements, property management requirements and title requirements.

Here’s what you need to know.

• The SBL Program is being folded into Freddie Mac’s conventional arm through a new product, “Conventional-Small.” This program aims to align the smaller transactions with standard Freddie Mac documentation but continues to allow for some streamlined processing that was available under the SBL Program. Applications for SBLs will close April 30, while applications for Conventional-Small are now open.
• Freddie Mac revised its inspection requirements for small (30 units or less) properties. Lenders must now inspect 80% of units, with no fewer than five and no more than 15 units. Lenders must inspect all down units and all commercial space. Lenders also must audit 50% of all leases, with no fewer than 10 leases and no more than 15 leases. These requirements apply to all applicable loans taken under application after April 21, 2026, and to all loans currently under application where no inspection has occurred.
• Freddie Mac now requires professional, third-party property management for transactions that meet all the following conditions:
• $10M or less in loan proceeds;
• The transaction involves a First-Time, Rapid Growth or Limited Multifamily Experience Sponsor;
• No individual or entity within the control structure of borrower lives or had a corporate office within 100 miles of the property; and
• No individual or entity within the control structure of borrower has owned at least five properties for five years in the same market.
• Beginning  July 1, Freddie Mac is updating its information security and business continuity planning requirements. Lenders should ensure that their technical teams are aware of and implement these new requirements.
• A new regulatory framework for artificial intelligence and machine learning tools is being incorporated into the Guide. This requires lenders to have a specific AI/ML policy and procedures approved by lender’s senior management, to include the CIO, CTO, CISO, CRO and/or head of AI. The governance framework must meet Freddie Mac requirements for risk management and data protection, as well as incorporate regular audits and other monitoring in accordance with NIST 800-53 or IOS 27001.
• In its continued fight against mortgage fraud, Freddie Mac is now requiring chain-of-title schedules to be brought forward through closing, with limited exceptions allowing a schedule within 30 days of closing. This requirement applies to all loans committed on or after May 20.

Miles & Stockbridge’s Real Estate Finance lawyers are available to talk with lenders and borrowers more about what the Freddie Mac Guide Bulletin means for their transactions.

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