Effective for Mortgage Loans Committed as of November 1, 2022, requirements for collecting and entering data for Properties consisting of Non-Contiguous Parcels were clarified.
To better monitor the operating performance and property condition for a Property consisting of Non-Contiguous Parcels, you must:
- collect and enter consistent, detailed Property-level data for each Non-Contiguous Parcel; and
- use consistent references for each Non-Contiguous Parcel in all systems and documents (e.g., DUS Gateway, C&D, MSFMS, Underwriter’s Narrative, Form 4662, operating statements, rent rolls, inspection reports).
When underwriting a Property consisting of Non-Contiguous Parcels securing a single Mortgage Loan, you may consolidate the underwriting in a single Transaction Approval Memo provided you:
- collect detailed data for each Non-Contiguous Parcel, including separate
- rent rolls, and
- operating statements; and
- enter accurate Property records for each Non-Contiguous Parcel in DUS Gateway before requesting a quote.
To ensure you have the necessary data, you must:
- Use the Property name, if applicable, and address to reference each Non-Contiguous Parcel; however, for a Supplemental Mortgage Loan, enter the same address(es) as for the Portfolio Mortgage Loan.
- Ensure the Property’s Underwritten Pro Forma Income Statement:
- separately itemizes each Non-Contiguous Parcel’s identification, preferably using the name and address for each parcel; and
- has sufficient detail to comply with Part II, Chapter 1: Attributes and Characteristics, Section 102: Multiple Properties.
- Require every third-party report to assess, separately and in the aggregate, each Non-Contiguous Parcel. The consultant may issue a consolidated third-party report for the entire Property, provided each Non-Contiguous Parcel is identified and assessed separately.
Committing and Delivery
- Confirm the applicable acquisition system’s Property Collateral records match and include all parcels identified in the DUS Gateway quote.
- Use separate “Property Names” to:
- uniquely identify each Non-Contiguous Parcel submitted as a separate Property Collateral record; and
- consistently reference each Non-Contiguous Parcel.
- Use the updated Job Aid: Guidance for Entering Multiple Property Addresses in Acquisition Systems when entering each Non-Contiguous Parcel as a separate Property Collateral record in C&D.
- For each Non-Contiguous Parcel entered as a separate Property Collateral record in the applicable acquisition system, submit a
- Form 4662, and
- rent roll.
- At Delivery, enter separate income, expenses, and Underwriting Value in the "Underwriting Data" section, using:
- the separate operating statements and rent rolls for each Non-Contiguous Parcel entered as a Collateral Record; and
- for the Underwriting Value, an allocated approach if the Appraisal does not breakout separate values for each Non-Contiguous Parcel, as follows:
|Collateral Record Underwriting Data||Equals|
|GPR Per Collateral Record||Total monthly rents, including market rents for vacant units, from each Non-Contiguous Parcel's rent roll.|
% GPR Per Collateral Record
|GPR Per Collateral Record divided by the aggregate GPR (excluding commercial income) of all Properties securing the Mortgage Loan.|
|Allocated UW Value Per Collateral Record||% GPR Per Collateral Record multiplied by the Underwritten Value.|
For each Property Collateral record in the MAMP you must obtain separate
- operating statements,
- inspection reports, and
- rent rolls.
When completing Form 4254, you must:
- receive separate operating statements for each Non-Contiguous Parcel, with the income and expenses reflecting actual results of operations for each Non-Contiguous Parcel;
- require inspection reports for each Non-Contiguous Parcel shown as a separate Property Collateral record; and
- allocate the debt service throughout the life of the Mortgage Loan based on the same % GPR Per Collateral Record as calculated during underwriting.
|Operating Statement Item||Form 4254 Expectations|
|Debt Service||Debt Service must be allocated per each Non-Contiguous Parcel of the Property using the same % GPR Per Collateral Record (as calculated during underwriting) multiplied by the total debt service amount.|
Please contact the Fannie Mae Deal Team or [email protected] with any questions.