Freddie Mac Optigo | 2026-10-15

Freddie Mac Closing Protection Starts With the Funding Map

The current Guide links the parties handling funding and recordation to settlement-statement delivery and closing protection letter coverage.

Freddie Mac's current Multifamily Seller/Servicer Guide, Chapter 29, assigns specific roles to the title insurance underwriter, title agent, and other closing participants. For mortgage origination transactions under Seller Applications submitted on or after October 31, 2025, the title insurance underwriter, an affiliate under identical ownership, or its wholly owned subsidiary must directly perform the funding functions. The settlement statement must come directly from that party to the Seller/Servicer or its counsel, while either the underwriter or title agent may perform escrow functions.

Section 29.1(i) addresses a permitted split in those roles. If recordation is handled by a title company other than the title insurance underwriter, or if funding is handled by a different title company in a manner allowed by the Guide or another Freddie Mac written agreement, the Seller/Servicer must obtain an insured closing protection letter when one is available in the jurisdiction.

The letter must be addressed to Freddie Mac or to the Seller/Servicer and its successors and assigns. Its coverage must reach losses arising from the title company's failure to follow the Seller/Servicer's written closing instructions and from fraud or dishonesty in handling funds or documents. The Guide provides a TEL-specific exception when the fiscal agent handles escrow and disbursement of TEL proceeds under the funding loan agreement.

For borrower-side counsel, the opening checklist should name the title underwriter, title agent, funding party, escrow party, and recording party; confirm the Seller Application date and jurisdictional availability of closing protection coverage; and track the letter's addressee and covered risks. That role map should be reconciled with the closing instructions, settlement statement, and final funds trail before closing. This note is informational only and is not legal advice for any specific transaction.