503.01

Reporting

Requirements

You must submit quarterly and annual Financial Analysis of Operations reports (Form 4254 or Form 4254.Seniors) for each PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). .

Operating Procedures

You must submit all Financial Analysis of Operations reports via the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .  To ensure the operating statements are complete:

Item Activity  You must...
1 Verify Verify the operating statements reflect 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).  actual physical occupancy based on the most recent quarter-end rent roll.
2 Provide

Provide actual expenses, normalizing

 

  • for seasonal variations, and
  • certain expenses including, but not limited to,
    • real estate taxes,
    • property casualty insurance,
    • Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , and
    • property management fees.
3 Comment 

Comment if:

 

  • 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. is on Fannie Mae’s WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. ; or
  • per Form 4254.DEF there is a 20% or greater variance, either higher or lower, from the same reporting period in the prior year for 
    • Effective Gross IncomeEffective Gross IncomeFor any specified period, the Property's total Net Rental Income, plus commercial income, plus other income, all calculated per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. ,
    • Total Operating Expenses,
    • Capital Expenditures, or
    • Debt Service Coverage.

Comments should:

 

  • describe: 
    • the situation and the variance’s root cause;
    • risk changes or trends;
    • any PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). management changes;
    • the BorrowerBorrowerPerson who is the obligor per the Note. /PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). manager’s plan to improve cash flow if 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). is 
      • on the WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. , or 
      • not performing as expected per original underwriting; and 
    • the overall 
      • payment history, 
      • debt service adjustments, 
      • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). performance, or 
      • significant financial changes; and
  • include:
    • available market data, noting 
      • concerns or improvements, and 
      • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). performance relative to competition;
    • normalization/annualization adjustments; and
    • applicable hedge data for rate cap income and/or escrow payments.
4 Resolve Timely resolve any quality control issues.