The instructions to the 2021 versions of the Fannie Mae/Freddie Mac unform security instruments allow certain purchase money language to be included as a “may” change. The relevant instruction states:
Lenders MAY add the words “Purchase Money” in front of or above the caption “Deed of Trust”, if all, or any portion of the loan proceeds are to be used to purchase the security property. Lenders MAY also add the following in parentheses either above the caption or in the space provided for the legal description of the property:
(All or part of the purchase price of the Property is paid for with the money loaned.)
All states have laws that provide special protections for purchase money mortgages, and some states allow purchase money language to be added to the security instrument to identify the instrument as securing a purchase money transaction. While this language is generally allowed, Maryland is the only state where purchase money language is required to be placed on a security instrument for a mortgage to qualify as a purchase money mortgage. Md. Code Ann., Real Prop. § 7-104.
To allow clients to add this language to their security instruments, we have created field 48407 “Print Purchase Money in Security Instrument Doc Title” and field 48408 “Print Purchase Money sentence in Security Instrument” which can be set to trigger the purchase money language in the respective areas of the documents as allowed by the GSEs. Please note that if field 48407 “Print Purchase Money in Security Instrument Doc Title” is not otherwise set, it will continue to be globally mapped to ‘Yes’ for purchase loans in Alabama, DC, Delaware, Minnesota, and Texas, and for the same states for Construction/Construction-to-Perm loans that have 1179 “New Construction” set to ‘Yes’.
The “Purchase Money” language will continue to print by default on Maryland security instruments. Clients who wish to trigger this additional language on their other revised uniform instruments should contact their Client Manager for assistance.
These changes will only be active on the new security instruments and not the old Fannie Mae security instruments. The changes will take effect on October 28, 2022. If you have any questions or concerns, please contact Client Support at 1.800.497.3584.
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