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Freddie Mac's PCA Changes in a Nutshell

Freddie Mac has made a number of important changes to its seller servicer guide related to several parts of the Property Condition Assessment.

Freddie Mac has updated the seller servicer guide related to several different parts of the Property Condition Assessment (PCA), most notably through a new cost category (PR-90) and guidance for evaluating a property’s electrical capacity and overload protection. The updates went into effect last week, and all new reports should be performed in accordance with the revised requirements. These affects are also to be coming to the SBL report within the first half of May 2015. 

The Changes – what you need to know

Freddie Mac has updated its requirements for Priority Repairs and repair escrows, including a new requirement to identify the most urgent of Priority Repairs as part of the PCA as PR-90. This new cost category is to be used to note deficiencies that need repairs within 90 days of origination. They include imminent Life Safety Hazards to tenants or deficiencies noted at the property that if not repaired will cause ongoing substantive damage. All other Priority Repairs require attention within 180 days after the origination date. 

The new PR-90 category is now included on Form 1105 of the Freddie Mac PCA, as is the second major change: revised electrical requirements.    Freddie Mac’s guidance on evaluating a property’s electrical capacity and overload protection now requires a licensed electrician to evaluate the electrical systems and determine if it is acceptable based on the loads within the unit for any property with an individual unit electrical service amperage below 60-amperes. A full load calculation is required based on the most current National Electric Code (NEC). Freddie Mac states that “regardless of the results of the load analysis, the property must meet the minimum requirements of the NEC and all local building codes.”

Importantly, should fuses be found on-site, Freddie Mac requires that verification that thefuses are S-Type tamper proof. If S-type tamper proof fuses are found, the consultant must determine the adequacy of the installation and associated components, and whether an upgrade to circuit breakers is warranted. Because this language leaves space for interpretation, it is important that consultant and property owner are clear of expectations regarding the extent of required overload protection at the onset of the assessment. 

In addition, requirements for a number of third party reports – including the wood-damaging inspect inspection report, and the certification from a property’s pest control provider have been updated. Freddie Mac has also removed the reference in Form 1105 related to “Fireplaces” and has added a reference to “Fitness Center”, and combined “Spa and Sauna” into a single line. 

For more information about how these changes apply and affect your Property Condition Report, feel free to reach out to