423.02

Refinance Eligibility

On a monthly basis, beginning at least 24 months before each Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). operating performance to determine the likelihood that the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. UPBUPBUnpaid Principal Balance can be refinanced based on the current cap rate, and the DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. and NCFNCFOn an annual basis or any specified period, the total Net Operating Income, minus the full amount underwritten for Replacement Reserve expense, regardless of whether deposits will be made (per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and… from the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). most recent annual financial statement.

Participants from the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting, asset management, portfolio management, and finance teams must coordinate to categorize each Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. as either:

  • “Meets Criteria” = the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. qualifies for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party; or
  • “Does Not Meet Criteria” = the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. does not qualify for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party.

For each Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. categorized as “Does Not Meet Criteria”, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:

  • review the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). quarterly operating statements and analyze the operating expenses (especially repairs & maintenance and capital expenses) to assess whether the BorrowerBorrowerPerson who is the obligor per the Note. is prudently managing the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; and
  • work with the BorrowerBorrowerPerson who is the obligor per the Note. and Fannie Mae to ensure the BorrowerBorrowerPerson who is the obligor per the Note. has a reasonable payoff plan.