Freddie Mac Standard Deed-in-Lieu 

A faster and simpler deed-in-lieu process that enables struggling 

homeowners to exit gracefully from their homes and avoid 

foreclosure when they don’t qualify for other options

Are you struggling to avoid foreclosure, but can’t stay in your home because you 

don’t qualify for a reduced mortgage payment in the form of a loan modification? 

Have you been unsuccessful in your attempts to sell the property?

If neither of these foreclosure alternatives has worked 

for you, another solution that may be available when 

your mortgage is owned by Freddie Mac is the Freddie 

Mac Standard Deed-in-Lieu. The transaction process 

for the Standard Deed-in-Lieu is more streamlined and 

simplified – enabling eligible homeowners to move out 

of the property more quickly and avoid foreclosure. 

What is a deed-in-lieu? A deed-in-lieu of foreclosure 

allows homeowners to voluntarily transfer clear and 

marketable title of their property (i.e., the house and the 

land) to the owner of their mortgage in exchange for the 

discharge of their mortgage debt. 

The Freddie Mac Standard Deed-in-Lieu simplifies and 

streamlines this foreclosure alternative by: 

 Speeding up the decision-making process by

delegating approval authority to our Servicers (the

organization to which you send your mortgage

payments);

 Expanding eligibility to a greater number of

homeowners, regardless of their delinquency status;

and

 Offering up to $3,000 in relocation assistance for

homeowners who meet certain requirements.

Are You Eligible?

You may be eligible for the Freddie Mac Standard 

Deed-in-Lieu if: 

 Your mortgage is owned by Freddie Mac

(visit our Loan Look-up Tool at

https://ww3.freddiemac.com/corporate/ to

find out); 

 You submit a complete Borrower Response

Package* to your Freddie Mac Servicer describing

your financial situation;

 You are either current or delinquent on your

mortgage payments and:

- Can provide evidence of an eligible financial

hardship (e.g., the death of a borrower or primary

or secondary wage earner, long-term or permanent

disability or serious illness of a borrower/coborrower or dependent family member) that came

as a result of an increase in your living expenses

or a decrease in your income or were previously

discharged from the debt obligation in a Chapter 7

bankruptcy;

- Can convey clear and marketable title to the

property to Freddie Mac;

- You didn’t qualify for a loan modification, or you did

qualify for a loan modification but couldn’t accept it

because you need to move out of your house; and

- You have tried unsuccessfully to sell the property

through a Freddie Mac Standard Short Sale.

 In addition, if you are current or less than 31 days

delinquent on your mortgage, you must:

- Occupy the property as your primary residence;

and

- Have a monthly debt-to-income ratio greater than

55 percent (service members with Permanent

Change of Station, or PCS, orders are exempt from

this requirement).

In some cases, if you have the financial ability, you will 

be required to make a one-time payment prior to the 

closing of the Standard Deed-in-Lieu or sign a new 

promissory note to pay for a portion of the unpaid 

balance after the Standard Deed-in-Lieu transaction 

closes. 

* Ask your Freddie Mac Servicer or HUD-approved housing counselor about the documents required to complete a Borrower Response Package.
Additional Flexibility for Service Members

Service members who receive Permanent Change of 

Station (PCS) orders qualify for additional flexibility 

under the Freddie Mac Standard Deed-in-Lieu, 

including: 

 Enabling your PCS orders to be considered an 

eligible hardship if the location is greater than 50 

miles from the mortgaged premises; 

 Additionally, if the property is your primary 

residence purchased on or before June 30, 2012:

- Eliminating the 55 percent or greater monthly 

debt-to-income ratio requirement; and

- Waiving any cash or promissory note 

contribution requirement. 

Visit our “Mortgage Relief Options for Service 

Members” page at 

http://www.freddiemac.com/mortgage_help/military_a

ssistance.html for more information, tools, and 

resources. 

Homeowner Relocation Assistance 

It is possible that you may qualify for a payment of up 

to $3,000 in order to assist you with your relocation 

when the Freddie Mac Standard Deed-in-Lieu 

transaction has been completed. 

You may also qualify for a new, supplemental 

borrower incentive of up to $7,000 if you were not 

required to make a financial contribution to the 

transaction and your home is located in Connecticut, 

the District of Columbia, Illinois, Maryland, 

Massachusetts, New Jersey, New York, or 

Pennsylvania. 

Not all homeowners will qualify for relocation 

assistance and/or the supplemental borrower 

incentive, so ask your Freddie Mac Servicer for 

details. Service members subject to PCS orders are 

not eligible for relocation assistance, as the 

government helps defray the cost of their move. 

Note that the property must be vacant and broomswept, or the relocation assistance payment will be 

reduced by the cost of cleaning and repair. 

$6,000 Second Mortgage Allowance 

If you have a second mortgage or other subordinate 

mortgage on your property, Freddie Mac may pay up 

to $6,000 to the other mortgage holder(s) to have 

them forgive your debt and release their lien. This 

allows you to leave the property free and clear. 

For More Information 

 Find out if Freddie Mac owns your mortgage by 

visiting our Loan Look-up Tool at 

https://ww3.freddiemac.com/corporate/. 

 Contact your Servicer. Their telephone number 

and mailing address should be listed on your 

monthly statement or coupon book. 

 Refer to the definition of “service members” here: 

http://www.freddiemac.com/mortgage_help/popup/

servicemembers.html?type=popup&height=400 

 Go to the U.S. Department of Housing and Urban 

Development website at 

http://www.hud.gov/offices/hsg/sfh/hcc/fc/index.cfm

to find a list of free, HUD-approved nonprofit 

counseling agencies in your area that you can visit 

in person or talk to over the phone to help you with 

information and assistance to avoid foreclosure. 

 Contact a Freddie Mac Borrower Help Center or 

Network participant listed at 

http://www.freddiemac.com/mortgage_help/who_to

_contact_for_help.html#helpcenters, where HUDapproved nonprofit housing counselors will provide 

free, confidential financial counseling to help you 

with information and assistance to avoid 

foreclosure. 

 Visit the Freddie Mac “Mortgage Help Resource 

Center” at 

http://www.freddiemac.com/homeownership/mortg

age_help/ to find useful tips, tools, and educational 

resources, including information on what to expect 

when working with your Servicer. This page also 

includes a link to “Foreclosure Prevention 

Workshops” sponsored by community-based 

organizations in your state, as well as other helpful 

resources. 

Footnotes: 

 Freddie Mac does not offer the Freddie Mac 

Standard Deed-in-Lieu directly. Your Freddie Mac 

Servicer will work with you to determine your 

eligibility. 

 The Freddie Mac Standard Deed-in-Lieu should 

not impact you if you are already working with 

your Freddie Mac Servicer on an existing deedin-lieu or other Freddie Mac alternative to 

foreclosure. If you receive a solicitation from your 

Servicer, or are already working on a solution, 

you should continue with your current process. 

 Cancellation of debt through a deed-in-lieu may 

have tax consequences. Please consult your tax 

advisor to discuss potential tax consequences. 

Note: This flyer is meant to provide general 

information about the Freddie Mac Standard Deedin-Lieu, and is not a comprehensive summary. Many 

specific additional terms, conditions, and limitations 

apply. Please contact your Freddie Mac Servicer for 

more detailed information about the program and 

eligibility requirements. 

Publication Number 918 ■ February 2015