Section 202
| 202.01 | |
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| 202.01A | |
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Requirements
You must:
- document the selection and approval of an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP.
, who is:
- a Certified General AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. (or licensed or certified per state law, if that state does not use the Certified General AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. designation);
- listed in good standing on the state roster per Title XI of FIRREAFIRREAFinancial Institutions Reform, Recovery, and Enforcement Act of 1989. ; and
- actively prepares multifamily appraisals in 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). market;
- require the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
to:
- be in a narrative format, using only objective factors;
- be signed by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
- be certified by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to conform with current USPAPUSPAPUniform Standards of Professional Appraisal Practice requirements; and
- comply with:
- Instructions for Appraisers (Form 4827); and
- any governmental regulations in effect when 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.
was originated, including
- FIRREAFIRREAFinancial Institutions Reform, Recovery, and Enforcement Act of 1989. ,
- all fair lending laws, and
- all fair housing laws;
- provide the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP.
all applicable documents needed to accurately assess 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).
value, including:
- the most recent PCA ReportPCA ReportProperty Condition Assessment Report documenting the findings of a PCA. , or any other inspection reports (e.g., a structural engineering report);
- a rent roll dated within 60 days of the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. inspection date;
- 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 statements detailing
- income and expenses for the previous year (if available, for the previous 2 years), and
- year-to-date income and expenses;
- your sample of residential leases reviewed;
- copies of any:
- executed commercial leases, including all amendments and attachments;
- ground leases;
- easements or regulatory agreements; and
- any purchase/sales contracts executed within 3 years before the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. date;
- any Environmental Site AssessmentsEnvironmental Site AssessmentsInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. ;
- architectural plans, 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 not yet completed;
- site plans/surveys, if available;
- for a Moderate Rehabilitation PropertyModerate Rehabilitation PropertyProperty that will undergo at least $8,000 per unit of Rehabilitation Work.
, details of the
- capital expenditures incurred, and
- total construction costs; and
- any information that may affect the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. estimate of 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). value; and
- not accept any AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
completed by an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP.
selected, retained, or compensated by:
- the BorrowerBorrowerPerson who is the obligor per the Note. ;
- the SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). ;
- any Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. ;
- any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. ;
- for an acquisition, the seller or any related party; or
- any third party, including 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.
- BrokersBrokersThird-party Person who arranges Mortgage Loan financing on the Borrower’s behalf, or Transfers/Assumptions on behalf of the new Borrower for an assumption, or transferee for a transfer. , or
- Correspondents.
Guidance
If final reports are unavailable, you may send draft versions of the
- PCA ReportPCA ReportProperty Condition Assessment Report documenting the findings of a PCA. , and
- Environmental Site AssessmentsEnvironmental Site AssessmentsInvestigation and resulting report (Phase I ESA or Phase II ESA) conducted per Environmental Due Diligence Requirements (Form 4251), identifying if a Property has Recognized Environmental Conditions or Business Environmental Risks. .
If the final reports differ materially from the drafts sent to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , you must:
- forward the final reports to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ; and
- inquire whether the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. should be updated based on the final reports.
Requirements
When communicating with an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , you must comply with the Appraiser Communications table.
| Appraiser Communications | |
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| You may... | You must not... |
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provide any 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. data, such as
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| 202.01C | |
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Requirements
| Valuation Date | |
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| If the Appraisal Date is more than... | You must... |
| 6 months before the Commitment Date | Instruct the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to update the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. per Instructions for Appraisers (Form 4827). |
| 12 months before the Commitment Date | Order a new AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. . |
Guidance
You may be required to obtain a new or updated AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. if Fannie Mae determines the market deteriorated between the
- Appraisal DateAppraisal DateEffective date of value in the Appraisal. , and
- Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. .
Requirements
If you DeliverDeliverSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. a 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. with an AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. prepared by an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. selected by another lender, you must:
- make all representations and warranties to Fannie Mae regarding the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. ; and
- confirm it complies with this GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
| 202.01E | |
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Requirements
Your employees must:
- review and approve each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. for adequacy and compliance; and
- ensure the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
includes:
- an accurate description of 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 the market, including:
- 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). complete legal description;
- any information you provided the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
- color photographs of 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).
- exterior,
- interior common areas,
- typical unit interiors,
- surrounding area,
- rental comparables,
- sales comparables, and
- commercial rental comparables;
- maps showing 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).
location relative to the location of the
- land comparables,
- current rental comparables,
- future rental comparables, and
- sales comparables;
- qualifications of the
- a copy of your
- complete signed engagement letter with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
- communications with the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. regarding the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. scope;
- an opinion of 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).
value per Part II, Chapter 2: Valuation and Income, Section 202.02A: Appraised Value, and supported by
- market data,
- logical analysis, and
- sound professional judgment;
- an opinion of 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). insurable value; and
- an industry standard form of AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
appropriate for the 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.
- size, and
- structure.
- an accurate description of 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 the market, including:
You must:
- return any report to the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP.
that:
- is incomplete; or
- lacks credibility; and
- ensure your AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
review:
- is documented in the Transaction Approval Memo;
- is accompanied by all other AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. you ordered on 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). during the past 3 years; and
- includes all information per the following Appraisal Analysis table.
| Appraisal Analysis | |
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| For... | You must... |
| Market Conditions |
Confirm the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. accounts for current market conditions, including
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| Data Accuracy |
Verify the Appraisal’sAppraisal’sWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. data accuracy, including
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| Property Inspections | Determine if the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. conducted a thorough inspection of 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). , including random sampling of occupied and vacant units per Instructions for Appraisers (Form 4827). |
| Sales/Rental Comparable Analysis |
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| Market Rents and Expense Analysis | If the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP. proforma income or expenses substantially differ 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). income and expenses used to calculate the Underwritten NCFUnderwritten NCFNet Cash Flow as adjusted by the Lender per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , provide additional supporting comparable property data or rationale supporting your conclusions. |
| Capitalization Rate Analysis |
Provide your assessment that the capitalization rate:
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| Value Reconciliation |
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For each AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. , you must ensure all:
- Potential Red Flags for Mortgage Fraud and Other Suspicious Activity were considered and the review documented in the Transaction Approval Memo; and
- unresolved red flags were reported per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 308: Compliance.
| 202.01F | |
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Requirements
For any 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. , you must not order, obtain, use, or pay for a subsequent AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. unless:
- you document in your Transaction Approval Memo that the initial AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
:
- was not credible; or
- violated legal and/or professional standards related to
- USPAPUSPAPUniform Standards of Professional Appraisal Practice , or
- nondiscrimination; and
- the subsequent AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value
as of a specific date, and
supported by the presentation and analysis of relevant market information.
:
- is required per your pre-established written pre- or post-funding AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. review policy;
- adheres to a policy of selecting the most reliable AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. rather than the AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. with the highest value; or
- is required by law.
Requirements
You must promptly notify:
- Fannie Mae if you discontinue using any AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. who completed AppraisalsAppraisalsWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. within the past 12 months for Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. you DeliveredDeliveredSubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. ; and
- Fannie Mae and the applicable state AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. certifying and licensing agency, or other regulatory body, if you believe an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. is:
| 202.02 | |
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| 202.02A | |
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Requirements
You must ensure:
- the Appraiser'sAppraiser'sPerson engaged to estimate a Property’s market value per USPAP. engagement letter requires compliance with Instructions for Appraisers (Form 4827);
- the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. provides an opinion of the market value on an "as is" basis;
- the Appraiser'sAppraiser'sPerson engaged to estimate a Property’s market value per USPAP.
opinion of the market value covers:
- each separate ProjectProjectMultifamily buildings on multiple Properties, owned by the same Borrower, and that comply with Part II, Chapter 1: Attributes and Characteristics, Section 102.01: Single Borrower Ownership. per Part II, Chapter 1: Attributes and Characteristics, Section 102.01: Single Borrower Ownership; and
- the aggregate market value of all ProjectsProjectsMultifamily buildings on multiple Properties, owned by the same Borrower, and that comply with Part II, Chapter 1: Attributes and Characteristics, Section 102.01: Single Borrower Ownership. ; and
- regardless of any allocation in the purchase/sales agreement, the Appraiser’sAppraiser’sPerson engaged to estimate a Property’s market value per USPAP.
opinion of the market value excludes any value from
- goodwill,
- business value (permitted for Seniors Housing PropertiesSeniors Housing PropertiesMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. ),
- intangibles,
- furniture,
- fixtures (unless customary in the market), or
- equipment.
You may also request the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. provide an opinion of 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). market value on an "as completed" basis, but you must only use an "as completed" value if all of the following apply:
- less than 12 months have passed between the
- Borrower'sBorrower'sPerson who is the obligor per the Note. acquisition of 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
- Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. ;
- for any capital improvements completed after the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower.
to be considered in an "as completed" value, they must be:
- Immediate Repairs listed in the PCAPCAAssessment of the Property's physical condition and historical operation. ; or
- improvements identified by the BorrowerBorrowerPerson who is the obligor per the Note. , if you agree the improvements will add PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). value;
- all capital improvements are included in either the
- Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion…, or
- Rehabilitation Reserve AgreementRehabilitation Reserve AgreementBorrower’s agreement to undertake identified Rehabilitation Work, the terms for funding the Rehabilitation Work, and the disbursement of funds from the Rehabilitation Reserve Account (e.g., Form 6222 or Form 4523). ;
- sufficient funds to complete all capital improvements are deposited into either the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents.
or the Rehabilitation Reserve AccountRehabilitation Reserve AccountCustodial Account established by the Lender and funded by deposits from the Borrower per the Rehabilitation Reserve Agreement to fund the Rehabilitation Work.
:
- for capital improvements identified as Immediate Repairs, the funds must cover any higher funding percentage you require; and
- for capital improvements identified by the BorrowerBorrowerPerson who is the obligor per the Note. , the funds must cover the estimated cost (including a cost overrun allowance); and
- all capital improvements must be completed within:
- 12 months after the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , if identified by the BorrowerBorrowerPerson who is the obligor per the Note. ; or
- any shorter time period per Part II, Chapter 4: Inspections and Reserves, Section 404: Completion/Repairs, if listed as Immediate Repairs.
| 202.02B | |
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Requirements
You must:
- analyze 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). sale history for the last 3 years, including any transfer of a Controlling InterestControlling InterestFor any entity, ownership or control of 50% or more of the ownership interests in the entity or the power or right to control or modify, directly or indirectly, the management and operations of the entity. in the owner;
- address the following in your Transaction Approval Memo:
- if a sale occurred within the last 24 months, document the
- circumstances of the sale, and
- support for any increased Appraised ValueAppraised ValueAppraiser’s opinion of the Property's market value documented in the Appraisal, on an “as is” basis, unless use of an “as completed” basis is specifically permitted per the Guide.
by analyzing any
- Net Cash FlowNet Cash FlowOn 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… increases,
- capitalization rate compression, and
- value-add market drivers; and
- if any stated sales price per the purchase/sales agreement differs from the transfer price per the public records or third-party reports, investigate and document the discrepancy;
- if a sale occurred within the last 24 months, document the
- for any acquisition, confirm the seller was 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). owner in the real estate records when the purchase/sales agreement was signed;
- evaluate the purchase/sale contracts to
- clearly identify the
- seller, and
- purchaser, and
- confirm the sale was an arm's length transaction;
- clearly identify the
- review the final settlement statement before the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower.
to confirm accuracy of the
- purchase price,
- closing costs, and
- any cash in/out to the seller and purchaser; and
- submit a copy of:
- the final settlement statement at DeliveryDeliverySubmission of all correct, accurate, and certifiable documents, data, and information with all applicable documents properly completed, executed, and recorded as needed, and any deficiencies resolved to Fannie Mae’s satisfaction. ; and
- all purchase/sales contracts and amendments to
- the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. , and
- Fannie Mae.
| 202.02C | |
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Requirements
Your Underwriting ValueUnderwriting ValueValue of the Property determined by the Lender to size the Mortgage Loan per Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation. must not exceed the Appraised ValueAppraised ValueAppraiser’s opinion of the Property's market value documented in the Appraisal, on an “as is” basis, unless use of an “as completed” basis is specifically permitted per the Guide. , as reduced by any adjustments you deem necessary, accounting for:
- your analysis of 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). sales history; and/or
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). deficiencies that cannot be cured within 6 months after the Appraisal DateAppraisal DateEffective date of value in the Appraisal. .
If less than 12 months have passed between the Borrower'sBorrower'sPerson who is the obligor per the Note. acquisition of 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 the Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. , your Underwriting ValueUnderwriting ValueValue of the Property determined by the Lender to size the Mortgage Loan per Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation. must not exceed the lower of the
- Appraised ValueAppraised ValueAppraiser’s opinion of the Property's market value documented in the Appraisal, on an “as is” basis, unless use of an “as completed” basis is specifically permitted per the Guide. , or
- sum of 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).
acquisition price per the title company settlement statement, with no allocations to:
- goodwill,
- business value (permitted for Seniors Housing PropertiesSeniors Housing PropertiesMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. ),
- intangibles,
- furniture,
- fixtures (unless customary in the market), or
- equipment;
- cost of capital improvements or repairs that increase 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).
value, if
- completed and fully paid, or
- sufficient funds for completion are deposited in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. or reserve account; and
- actual acquisition costs, not exceeding 3% of the acquisition price, including:
- Origination FeeOrigination FeeFee you charge the Borrower for underwriting and originating the Mortgage Loan. ;
- arm's length acquisition fee (generally 1% - 2%) paid to an unrelated PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). if documented in the Settlement Statement;
- third-party report fees;
- BorrowerBorrowerPerson who is the obligor per the Note. -paid legal fees incurred on your behalf;
- title search and title insurance fees;
- survey fees;
- real estate and stamp taxes;
- deed-recording fees; and
- credit report charges.
- 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).
acquisition price per the title company settlement statement, with no allocations to:
Guidance
Actual acquisition costs should exclude any prepaid operating expenses or deposits applied toward future operating expenses or PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). improvements, including:
- prepaid or escrowed
- real estate taxes, or
- insurance premiums;
- prepaid
- utilities,
- 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. interest, including any interest rate buydown expense,
- rents, or
- security deposits;
- funded
- Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. (including any initial deposit),
- Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. cost,
- operating or Restabilization Reserve, or
- BorrowerBorrowerPerson who is the obligor per the Note. -controlled 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 or capital accounts;
- fees included in the Gross Note RateGross Note RateInterest rate stated in the Loan Documents.
, including any
- Origination FeeOrigination FeeFee you charge the Borrower for underwriting and originating the Mortgage Loan. , or
- broker fee;
- acquisition fees paid to a BorrowerBorrowerPerson who is the obligor per the Note. -AffiliateAffiliateWhen referring to an affiliate of a Lender, any other Person or entity that Controls, is Controlled by, or is under common Control with, the Lender. When referring to an affiliate of a Borrower or Key Principal: any Person that owns any direct ownership interest in Borrower or Key…; and
- for an MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. , pre-paid BondBondTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. -related and compliance monitoring fees.