Due Diligence for Designated Disaster Areas and States of Emergency

Supplement 25-03

: Due Diligence for Designated Disaster Areas and States of Emergency

Effective: 05/28/25

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Summary of Changes:

HIGHLIGHTS
Effective for Mortgage Loans not Delivered as of May 28, 2025, additional requirements apply to Properties located: in a state, county, or municipality with a declared state of emergency; or within a Designated Disaster Area (DDA) as announced by the Federal Emergency Management Agency (FEMA) or any other Federal agency or department.

HIGHLIGHTS

Effective for Mortgage Loans not Delivered as of May 28, 2025, additional requirements apply to Properties located:

in a state, county, or municipality with a declared state of emergency; or
within a Designated Disaster Area (DDA) as announced by the Federal Emergency Management Agency (FEMA) or any other Federal agency or department.

Primary Changes

A Designated Disaster Area (DDA) is any county or county-equivalent area (such as an independent city) designated by FEMA (or any successor agency or any other Federal agency or department) as adversely affected by a declared major disaster.

For all Properties not yet Delivered, if the Property is subject to a state, county, or municipality state of emergency or is located within a DDA declared at any time after your last Property inspection per the Guide, but prior to your Delivery of the Mortgage Loan to Fannie Mae, you must confirm the Property:

is accessible;
is in livable condition;
has working utilities; and
has no damage or flooding issues in
- external areas,
- common areas, or
- interior units.

For Properties Located Within a DDA or Subject To a State, County, or Municipal Declaration of Emergency
If the...	You must ensure...
Mortgage Loan Origination Date has not yet occurred; and Property was inspected before the DDA designation	the Borrower certifies no damage occurred; or if the Borrower certifies damage occurred: the engineer re-inspects the Property, and estimates damage; there is a required Completion/Repair Escrow based on the inspection; and DDA-related Completion/Repairs are completed within 6-months after the Mortgage Loan Origination Date. NOTE: If the Borrower is unable to make any certification regarding the Property condition, you must: suspend the Mortgage Loan closing; and contact your Fannie Mae Deal Team.
Mortgage Loan Origination Date has occurred, and has not yet Delivered.	the Borrower certifies no damage occurred, and the standard Borrower and Lender representations and warranties will apply when the Mortgage Loan is Delivered; or if the Borrower certifies damage occurred: you obtain remediation plans from the Borrower including scope, cost, and completion before Delivery; or if repairs cannot be completed before Delivery: you comply with Part V, Chapter 4: Asset Management: Loan Document Administration, Section 414: Casualty Losses – Performing Mortgage Loans; and the repairs exceed the lesser of $75,000 or 20% of the UPB, you submit the transaction to Portfolio Risk Management at [email protected] before Delivery.

Questions

Contact:

The Fannie Mae Deal Team, for Properties not yet under application.
The Property's applicable regional credit team, for Properties under application:
- Southeast: [email protected];
- Northeast: [email protected];
- West: [email protected]; or
- Central: [email protected].
Portfolio Risk Management at [email protected], for Properties with a Committed Mortgage Loan not yet Delivered.