Section 301

Zoning and Legal Non-Conforming Uses

Requirements

For each PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). , you must:

  • Identify the current zoning or land use designation.
  • Determine whether the use and PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). characteristics conform to those designations.

If the Property'sProperty'sMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). use and characteristics are a legal non-conforming use under applicable zoning and land use laws and regulations:

  • Analyze the impact on 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. if the BorrowerBorrowerPerson who is the obligor per the Note. is not allowed to rebuild the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). as is under current law.
  • The ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now constructed or hereafter constructed or placed on the land upon which the Property is located, together with all fixtures (as defined in the Uniform Commercial Code). must be able to be reconstructed per current zoning requirements to a level that would support a minimum 1.00 amortizing DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. in case of
    • partial condemnation, or
    • full or partial casualty.

If you order a Zoning Report for the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). from a zoning consultant, you must:

  • deliver structured data per the Zoning Report Data Supplement (Form 4089); and
  • include a report narrative.

Guidance

To assess the BorrowerBorrowerPerson who is the obligor per the Note. ’s ability to rebuild ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now constructed or hereafter constructed or placed on the land upon which the Property is located, together with all fixtures (as defined in the Uniform Commercial Code). on a non-conforming PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). to a level that would support a minimum 1.00 amortizing DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. , you should consider:

  • the continued marketability and economic viability of the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ;
  • the percentage of damage that could occur before the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). would be forced to comply with current zoning and land use requirements, and how to apply that percentage to the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). ’s market value, assessed value, replacement cost, or unit count; 
  • for PropertiesPropertiesMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). with multiple buildings, whether the percentage of damage would need to apply to a single building or the whole complex before being forced to comply with current zoning and land use requirements; and
  • the amount and type of insurance coverage maintained by the BorrowerBorrowerPerson who is the obligor per the Note. and required per Part II, Chapter 5: Property and Liability Insurance, Section 501.02C: Ordinance or Law Insurance, and the insurance loss proceeds payout, compared to increased rebuilding costs from
    • building code changes,
    • Americans with Disabilities Act compliance, and
    • the municipality's local zoning requirements (e.g., green compliance for new buildings, etc.).