In Single-Family Seller/Servicer Guide (Guide) Bulletin 2025-14, Freddie Mac announced that certain Sellers were authorized to deliver Payoff Draft Date 18 Mortgages. In Guide Bulletin 2026-4 and Guide Bulletin 2026-5, we announced a mandatory adoption date of July 1, 2026, for all Guarantor and MultiLender Swap Purchase Contracts.

The Payoff Draft Date 18 program will require Servicers to remit payoff proceeds using a different payoff draft date with a full month of interest. Under the Payoff Draft Date 18 requirements, the Servicer must remit the unpaid principal balance (UPB) of the mortgage and one full month of interest on the 18th calendar day of the following cycle, or the prior business day if the 18th is a non-business day.

There are specific exceptions for mortgages with payoff dates on the 1st or 2nd day of a month that are reported by the 2nd business day of the same month. If the payoff date is on the first or second day of the month and the payoff is successfully reported on the first or second business day of the month, Freddie Mac will draft funds on the 18th calendar day of the month in which the payoff was successfully reported and compensating interest will not be included. This Payoff Draft Date 18 requirement is tied to the mortgage and will remain with the mortgage if it’s transferred, except for transfers pursuant to a Voluntary Partial Cancellation (VPC) as described below.

Effective July 1, 2026, mortgages delivered under Guarantor and MultiLender Swap Purchase Contracts accepted on or after July 1, 2026, will be required to adopt the Payoff Draft Date 18 remittance requirements. Sellers will see a value of “18” defaulted in the corresponding field “Pre-Payment Remittance Due Days” on the Take Out Contract screens in Loan Selling Advisor®. Seller/Servicers may need to factor this into their overall best execution when selling through our Guarantor or MultiLender Swap executions.

To easily identify Payoff Draft Date 18 mortgages for Servicers, we recently introduced enhanced reports that identify the value in the “Payoff Remittance Due Days” data field. A new “Payoff Draft Day” column has been added to both the Newly Funded Loans and Newly Transferred in Loans reports within Freddie Mac’s Loan Level Reporting tool. This column displays an “18” to indicate Payoff Draft Date 18 mortgages.

Current vs. Future Remittance Process

As we transition to the new Payoff Draft Date 18 requirements, it's important to understand the differences between the current and future remittance processes for handling matured, prepaid or repurchased mortgages.

Current Remittance Process: Prior to July 1, 2026

  • For a payoff of a matured mortgage or a prepayment in full that’s successfully reported within two business days of the exception or payoff date, Freddie Mac will draft the unpaid principal balance (UPB) due as reported in the previous accounting cycle on the 5th business day after the payoff date, including exception interest, which is interest calculated from the first day of the month to the day before the exception date.
  • For Guarantor or MultiLender Swap Purchase Contracts, a value of “5” will be defaulted for “Prepayment Remittance Due Days” in the Servicing Options section. Loans allocated to a pool will inherit the contract’s servicing option that was effective at the time the contract is accepted.

Future Remittance Process: Effective July 1, 2026

  • For a payoff of a matured, prepaid or repurchased mortgage that’s successfully reported within two business days of the exception or payoff date, Freddie Mac will draft the UPB due as reported in the previous accounting cycle on the 18th calendar day of the following month after the payoff date. If the 18th calendar day falls on a weekend or holiday, payoff proceeds will be drafted on the previous business day.

    Servicers are responsible for paying a full month of interest, including compensating interest which is monthly interest, less the exception interest that you’ll collect from the borrower. Servicers must use their own funds to cover the difference between the interest due to Freddie Mac and the exception interest collected from the borrower when a mortgage loan is paid off before the end of the month.

  • For Guarantor or MultiLender Swap Purchase Contracts accepted on and after July 1, 2026, a value of “18” will be defaulted for “Prepayment Remittance Due Days” in the Servicing Options section. Loans allocated to a pool will inherit the contract’s servicing option that was effective at the time the contract is accepted. NOTE: depending on when the contract is accepted, loans/pools settling in the month of transition may have a value of “5” or “18”; this is expected during the transition to the new requirements. Payoffs on the 1st or 2nd business day of the month and reported to Freddie Mac by the 2nd business day (BD2) will be drafted on the 18th calendar day (CD18) of the current month without compensating interest.

What’s Staying the Same?

Below, you’ll find details on what stays the same, providing clarity and reassurance for your ongoing activities.

Loan Selling Advisor: No new information is required when taking out a Guarantor or MultiLender Purchase Contract or delivering loans. The "Prepayment Remittance Due Days" attribute will automatically populate on the Guarantor Contract Details screen in Loan Selling Advisor once the contract is accepted. The value will vary based on the contract acceptance date.

Investor Reporting: There will be no impact on your monthly Investor Reporting activities for Principal and Interest (P&I) remittance.

Payoff Reporting: The process for payoff reporting remains unchanged. Servicers will continue to report exception interest, and Freddie Mac will calculate the compensating interest.

Servicer Scorecard Metrics: There will be no impact on Servicer scorecard metrics.

Excluded Loans: Loans excluded from this program will follow the standard payoff remittance schedule of five business days. This applies to:

  • Short Sale/Charge Off/Make Whole (exception code 67)
  • Third-party sale (exception code 71)
  • FHA/VA foreclosure sale (exception code 73)

Reporting Deadlines: Servicers must continue to report payoffs to Freddie Mac by the following deadlines:

  • Prepaid: By the 2nd business day after receiving the payoff funds.
  • Matured: By the maturity date or within two business days after receiving the funds.
  • Repurchase: According to the specified reporting timeframe after notification, as detailed by the repurchase type.

UPB Reporting: Servicers will continue reporting the UPB plus exception interest.

If you have questions, please contact your Freddie Mac representative or Customer Service (800-FREDDIE).