Each FHA Mortgage must meet all the FHA requirements applicable to the FHA program under which it is insured.

The Seller must obtain Freddie Mac's FHA approval before selling FHA Mortgages to Freddie Mac. The Seller should request this FHA approval by contacting their account manager.

No FHA Mortgage may have an original principal balance in excess of the maximum principal amount as determined under the National Housing Act, or in excess of the maximum loan amounts for FHA conventional Mortgages in Guide Section 23.3, whichever is less.

Each FHA Mortgage must be covered by a paid-up Mortgage title insurance policy written by a title insurer and in a form acceptable to the Secretary of Housing and Urban Development (HUD). Such a policy may not be subject to any exceptions other than those previously approved by the Secretary of HUD. The protection and benefits of such a policy in the amounts required by HUD must run to Freddie Mac and to the Secretary of FHA HUD. With respect to any FHA Mortgage on a property formerly held by FHA HUD, a title insurance policy is not required if the Secretary of FHA HUD is obligated to :

• Waive any objection to title by reason of any lien or other adverse interest that was senior to the FHA Mortgage on the date such FHA Mortgage was filed for record, or

• Accept an assignment of the FHA Mortgage if the mortgagee is unable to complete foreclosure because of a defect in the FHA Mortgage instrument, a defect in the FHA Mortgage transaction or a defect in the title which existed at or before the time the FHA Mortgage was filed for record.

HUD FHA guidelines also prevail regarding the following FHA requirements:

• Loan-to-Value Limits

• Special Loan Characteristics

• Credit Underwriting

• Collateral

• Mortgage Insurance

The following requirements apply to fixed-rate mortgages sold under fixed-rate Cash through the Selling System.

• FHA Mortgages sold under contracts for 15-year Mortgages must have an original maturity greater than or equal to 10 years but not greater than 15 years from the Origination Date.

• FHA Mortgages sold under contracts for 20-year Mortgages must have an original maturity greater than 15 years but not greater than 20 years from the Origination Date.

• FHA Mortgages sold under contracts for 30-year Mortgages must have an original maturity greater than 20 years but not greater than 30 years from the Origination Date.