Builder’s Risk Insurance

Requirements

You must ensure builder’s risk insurance:

• is in place if property insurance coverage is excluded or otherwise limited during 
  • PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). construction, 
  • renovation, or 
  • restoration; 
• coverage begins on the Construction Activity Start DateConstruction Activity Start DateThe earlier of the date:  physical work at the Property commences; or  delivery of materials (whether located onsite or offsite) intended to be used in the construction of Improvements occurs.  through the Construction Activity Completion DateConstruction Activity Completion DateThe later of the date when:  substantial completion is achieved; or  any required certificates of occupancy, licenses, or permits required by applicable law following completion of the Construction Activity are issued.  ; 
• coverage equals at least 100% of the completed value, including: 
  • the aggregate of all project contracts and materials to complete the Construction ActivityConstruction ActivityConstruction, renovation, or restoration of Improvements:  beginning on the Construction Activity Start Date; and ending on the Construction Activity Completion Date.; and 
  • all soft costs (on a non-reporting basis), including, but not limited to
    • interest during the Construction ActivityConstruction ActivityConstruction, renovation, or restoration of Improvements:  beginning on the Construction Activity Start Date; and ending on the Construction Activity Completion Date., 
    • taxes,
    • architect/engineering fees, and
    • other overhead items attributable to delay; and
• maximum deductible does not exceed $50,000.

You must determine which soft costs will reoccur in the event of loss.