Part V
| Chapter 1 | |
| Section 101 | |
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| 101.01 | |
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Requirements
You must:
- service all Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. on Fannie Mae's behalf per the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ; and
- not engage any 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). on the Restricted Vendor List to perform any service for, or be involved in any way with, 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. servicing.
| 101.02 | |
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Requirements
You must:
- always protect Fannie Mae’s interest in 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. ;
- collect all amounts due from the BorrowerBorrowerPerson who is the obligor per the Note. for Fannie Mae and any MBS InvestorMBS InvestorFor MBS Mortgage Loans, either a Third Party MBS Investor for Lender-Arranged Sales, or the Multifamily Trading Desk. ;
- service each 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. per these documents until your obligations end in the following order of priority:
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. ;
- Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ;
- GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ; and
- commercially sound servicing practices and business judgment exercised by prudent institutional servicers for comparable mortgage loans 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). jurisdiction;
- perform additional servicing duties when directed by Fannie Mae; and
- hold any retained subservicer to this standard.
| 101.03 | |
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Requirements
You must:
- maintain a separate Servicing FileServicing FileYour file for each Mortgage Loan serviced. for each 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. ; and
- permit Fannie Mae to periodically examine your Servicing FilesServicing FilesYour file for each Mortgage Loan serviced. .
Operating Procedures
The Servicing FileServicing FileYour file for each Mortgage Loan serviced. must:
1. Per the Multifamily Servicing File Content Requirements (Form 4800), include a copy of all
- 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. origination documents,
- underwriting documents,
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and
- servicing documents.
2. Fully document your actions for each 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. .
3. Be in paper or electronic imaged form.
4. Comply with all record retention requirements per the Program Rules.
| 101.04 | |
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Requirements
For each 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:
- monitor the Borrower'sBorrower'sPerson who is the obligor per the Note. compliance with all Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. terms and conditions; and
- appropriately address noncompliance.
| 102.01 | |
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Requirements
You must maintain Fannie Mae's first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. security interest in the Personal PropertyPersonal PropertyFurniture, fixtures, equipment, and other tangible personal property located on or used in connection with the Property. by filing all necessary UCCUCCUniform Commercial Code financing statements and continuations by the earlier of:
- the date any outstanding filing lapses; or
- any applicable jurisdiction filing deadline.
Guidance
For all 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 should effectively monitor
- UCCUCCUniform Commercial Code financing statements, and
- continuation filing deadlines.
Operating Procedures
Each 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. Servicing FileServicing FileYour file for each Mortgage Loan serviced. must include a file-stamped copy of the UCCUCCUniform Commercial Code financing statements filed for the Personal PropertyPersonal PropertyFurniture, fixtures, equipment, and other tangible personal property located on or used in connection with the Property. , including
- initial filings,
- continuations,
- assignments, and
- other amendments.
Operating Procedures
You are authorized and required to file:
- All UCCUCCUniform Commercial Code continuation statements in all appropriate jurisdictions.
- Any UCCUCCUniform Commercial Code financing statement amendments to correct any scrivener’s error.
Unless Fannie Mae granted you a Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. , you are not authorized to
| Section 103 | |
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| 103.01 | |
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Requirements
You must immediately deliver to Fannie Mae:
- the original Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. ; and
- any new, replacement, or amended Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. delivered to you.
Operating Procedures
In your Servicing FileServicing FileYour file for each Mortgage Loan serviced. , you must keep a copy of any
- Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , and
- the associated Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
| 103.02 | |
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Operating Procedure
With any new or replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , you must
- submit a Borrower Letter of Credit Certification (Form 4664.B), and
- confirm the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. complies with Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
| 103.03 | |
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Operating Procedures
You must:
- effectively monitor each Letter of Credit'sLetter of Credit'sLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. expiration date; and
- ensure Fannie Mae receives an acceptable renewal or replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
- by the deadline per the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , or
- if no deadline is specified, at least 5 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. expires.
If you do not provide a renewal or replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , Fannie Mae will present a sight draft against the expiring Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .
| 103.04 | |
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Operating Procedures
You must ensure any replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. has an expiration date at least 30 days after the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. expiration date.
| 103.05 | |
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| 103.05A | |
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Operating Procedures
While each Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. is outstanding, you must:
- comply with Part I, Chapter 2: Mortgage Loan, Section 204.03: Verifying Issuer Ratings; and
- document each rating verification in your Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 103.05B | |
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Operating Procedures
| If the rating of the financial institution issuing or confirming the Letter of Credit does not comply with... | You must... |
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| Part I, Chapter 2: Mortgage Loan, Section 204.02: Issuers and Ratings |
Promptly notify Multifamily Business OperationsMultifamily Business OperationsTeam that can be contacted at [email protected]. even if the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument.
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| 103.06 | |
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| 103.06A | |
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Requirements
You must promptly notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. and Multifamily Business OperationsMultifamily Business OperationsTeam that can be contacted at [email protected]. if a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. draw is appropriate.
Operating Procedures
Unless 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. is being fully repaid, you must:
- assess each BorrowerBorrowerPerson who is the obligor per the Note. request to fully release or partially reduce a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. or other collateral;
- submit your recommendation to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. ; and
- notify the BorrowerBorrowerPerson who is the obligor per the Note. when each request is approved or denied.
| 104.01 | |
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| 104.01A | |
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Operating Procedures
Collect all of the following from the BorrowerBorrowerPerson who is the obligor per the Note. :
- reimbursement of all amounts Fannie Mae paid or is due per any:
- Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. or MBS for BondsMBS for BondsFannie Mae MBS: issued to credit enhance tax-exempt Bonds; or exchanged for Bonds redeemed at MBS issuance. ;
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or Reimbursement Agreement;
- 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. Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; and
- Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or other interest rate hedge;
- any Facility Fee and/or Activity Fee for an unreimbursed Liquidity Advance per the Reimbursement Agreement;
- all amounts required to replenish the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. ;
- any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or other Termination Fee;
- any other fees, expenses, or additional costs due per any
- Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. or MBS for BondsMBS for BondsFannie Mae MBS: issued to credit enhance tax-exempt Bonds; or exchanged for Bonds redeemed at MBS issuance. ,
- Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ,
- Reimbursement Agreement, or
- other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- any other amounts due Fannie Mae or the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. .
| Steps | Activity... |
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| Calculate the Amount Due |
After receiving the information to calculate the amount due, you must
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| Advance Funds Notification |
Fannie Mae will notify you of the amount disbursed on or after each disbursement date for any:
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| Payment Timing |
You must remit all BorrowerBorrowerPerson who is the obligor per the Note. payments per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or Fannie Mae’s instructions.
For BorrowerBorrowerPerson who is the obligor per the Note. payments received after 4:00 p.m. Eastern Time, you must use your best efforts to invest the funds. |
| 104.01B | |
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Requirements
You must ensure no PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. withdrawal occurs without Fannie Mae's approval.
Operating Procedures
For each Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , you must:
- Review the Bond Trustee'sBond Trustee'sTrustee for a Credit Enhancement Instrument. reported PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. balance.
- Collect from the BorrowerBorrowerPerson who is the obligor per the Note.
any amount withdrawn from the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements.
, including withdrawals reimbursing Fannie Mae for amounts it paid per the
- Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. or MBS for BondsMBS for BondsFannie Mae MBS: issued to credit enhance tax-exempt Bonds; or exchanged for Bonds redeemed at MBS issuance. , or
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| 104.02 | |
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Requirements
You must:
- ensure any control agreement perfecting Fannie Mae’s security interest in pledged collateral remains in full force and effect; and
- not invest, apply, or release any collateral under a Cash Collateral or other Security Agreement.
| 104.03 | |
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Operating Procedures
For UCCUCCUniform Commercial Code filings per Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or 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. documents, you must:
- instruct each Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. to file UCCUCCUniform Commercial Code continuation statements at least 90 days before the filing expires; and
- confirm the filing occurred before expiration.
| 104.04 | |
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Requirements
For 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. transactions that remarket on scheduled mandatory tender and remarketing dates where Fannie Mae provides 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. liquidity support, you must ensure any new Remarketing AgentRemarketing AgentPerson selected by the Issuer to reset the interest rate on the Bonds in order to resell any Bonds tendered by investors on the interest rate reset date. complies with Part III, Chapter 18: Bond Transactions and Credit Enhancement Mortgage Loans, Section 1803.02: Remarketing Agent.
| Chapter 2 | |
| Section 201 | |
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This Chapter:
- outlines the reporting and account reconciliation policies and procedures 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. ;
- applies to both Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. , except where noted that a particular procedure is applicable only to one or the other execution;
- describes the methods for accounting for scheduled monthly payments, payment shortages, additional principal payments, repayments of advances, and payments in full; and
- describes Fannie Mae's remittance requirements, the method for remitting, and the format for reporting 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. information on all transactions.
Fannie Mae purchases 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. for cash or in exchange for the issuance of a SecuritySecurityMBS, PFP MBS, or REMIC. . Fannie Mae reserves the right to later place any of the 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. purchased for cash into a SecuritySecurityMBS, PFP MBS, or REMIC. (e.g., PFP MBSPFP MBSMBS backed by a PFP Mortgage Loan. ). If Fannie Mae securitizes 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may be required to make certain changes to its reporting and remitting procedures. If such an event occurs and changes to a Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reporting and remitting procedures will be required, Fannie Mae will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in writing.
Fannie Mae reserves the right to modify its Remittance Accounting system and forms to accommodate future changes to its overall systems applicable to 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for collecting monthly P&IP&IPrincipal and interest payments from the BorrowerBorrowerPerson who is the obligor per the Note. in accordance with the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. executed by the BorrowerBorrowerPerson who is the obligor per the Note. . All P&IP&IPrincipal and interest payments and T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. amounts collected by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with 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. must be deposited in the applicable P&IP&IPrincipal and interest and T&I Custodial AccountsT&I Custodial AccountsCustodial Account for the deposit of T&I and other impound escrow funds. maintained in accordance with the requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must track and account separately for all P&IP&IPrincipal and interest payment activity relating to each 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. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report to Fannie Mae on the P&IP&IPrincipal and interest payment activity relating to each 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. as provided in this Chapter.
| Section 203 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use Fannie Mae’s eServicing System to report 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. level information on all Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must register to use the eServicing System prior to use. Information regarding registering for the eServicing System can be found on https://multifamily.fanniemae.com/applications-technology/eservicing. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must segregate its Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. servicing portfolio from its Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. servicing portfolio for reporting purposes.
All reportable transactions will fall into one or more categories. Some transactions update the status of 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. or summarize collection activity, while others update the information in Fannie Mae’s records (e.g., PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). addresses, ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. identification numbers, 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. terms, subservicing status, etc.).
| 203.03 | |
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| 203.03A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the eServicing System to report its monthly 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. activity to Fannie Mae following the end of each Reporting Period, commencing with the month following the:
- date Fannie Mae acquired the Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. or PFP Mortgage LoanPFP Mortgage LoanMortgage Loan originally purchased as a Cash Mortgage Loan or held in Fannie Mae’s portfolio, but subsequently securitized as an MBS. ; or
- Issue DateIssue DateFirst day of the month a Security is issued. for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. (other than PFP MBSPFP MBSMBS backed by a PFP Mortgage Loan. ).
The following are the cutoff dates for activity reporting on 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. :
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Monthly Activity Cutoff Date |
Monthly Activity Report Due Date |
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Servicer may establish as its cutoff date any day from the 25th of the month to the last day of the month. |
Not later than the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the cutoff date for the Reporting Period. |
| 203.04A | |
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For each Security Pool serviced by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a monthly Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. report that references:
- the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. ; and
- the Security Pool number.
For Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. 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. , the BorrowerBorrowerPerson who is the obligor per the Note. will have made no payment as the monthly debt service payment will not yet have come due. Because the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. report for the month following the Issue DateIssue DateFirst day of the month a Security is issued. of the Security Pool under the Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. 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. option will not include an amount for principal curtailment for amortizing 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of 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. as the first reporting cycle Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. . As long as the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reports the Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of the Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. in its first Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. report, there will be no impact on the Pool-to-Security balance reconciliation for that month.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must have transmitted all of its Security BalancesSecurity BalancesFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. (or corrections to balances reported in error) to Fannie Mae by 5:00 p.m. Eastern Time on the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of each month following the Reporting Period. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. anticipates a problem in meeting this reporting deadline or has a transmission problem that will result in late reporting, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to meet Fannie Mae’s reporting deadline, Fannie Mae may estimate the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Security BalancesSecurity BalancesFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. so Fannie Mae can pass-through payments to InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. and publish Security BalancesSecurity BalancesFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. in a timely manner. When Fannie Mae does this, Fannie Mae’s estimate will be both the published Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. , and the beginning Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. used for the next month’s Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. report. Fannie Mae will send the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. written notification of any published estimated Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. within 10 days after publication by Fannie Mae.
| 203.05 | |
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The exact due date of the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. submission of its reports depends on the type of transaction being reported.
| 203.05A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report removal activity (e.g., payoff, repurchase, liquidated-held for sale, and liquidated third-party sale/condemnation) by the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the cutoff date for the Reporting Period in which the activity occurred. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may correct any removal activity reporting error by resubmitting the corrected information in time to reach Fannie Mae by the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the Reporting Period. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is unable to correct the error, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). about the error.
| 203.05B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make sure that all other transactions (which are the transactions that comprise the bulk of its reports) are transmitted in sufficient time for receipt by Fannie Mae by the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the cutoff date for the Reporting Period.
The Loan Activity Record is used to provide 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. -level detail of amounts due to Fannie Mae or the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. for each 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. on the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. trial balance.
| 203.06A | |
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Payment collection relates to the receipt and application of the monthly payment. The information that must be reported includes:
- actual last paid installment ("LPILPIDue date of the last payment received. ") date;
- actual UPBUPBUnpaid Principal Balance ; and
- remittance amount (distributed between P&IP&IPrincipal and interest ).
Under the Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. option, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not report a principal distribution amount for the first reporting cycle following the Issue DateIssue DateFirst day of the month a Security is issued. of the Security Pool because no payment will have come due from the BorrowerBorrowerPerson who is the obligor per the Note. . For the first reporting cycle, the actual UPBUPBUnpaid Principal Balance of 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. will equal the Issue DateIssue DateFirst day of the month a Security is issued. principal balance, as no principal payment will be subtracted from the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. or passed through to the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. .
| 203.06B | |
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Fee collection relates to any special fees that were collected from the BorrowerBorrowerPerson who is the obligor per the Note. during the Reporting Period.
| 203.06C | |
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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. status relates to special actions that have occurred (e.g., a payoff or a repurchase). An action code and an action date (specifying when the reported action occurred or will occur) must be reported. The User Manual for the eServicing System provides detailed information regarding action codes and action dates.
On approximately the 10th day of the month, reports are available in the eServicing System for ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to verify the amount to be drafted on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , including P&IP&IPrincipal and interest and Prepayment PremiumsPrepayment PremiumsFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to Fannie Mae or the MBS InvestorMBS InvestorFor MBS Mortgage Loans, either a Third Party MBS Investor for Lender-Arranged Sales, or the Multifamily Trading Desk. .
3 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , reports are available in the Cash Loan Drafting ApplicationCash Loan Drafting ApplicationMultifamily application or successor system, where you review, update, and certify amounts for Fannie Mae to draft from your bank accounts via ACH for monthly P&I and payoff remittances for: Cash Mortgage Loans; and PFP Mortgage Loans. for ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to review, update, and certify the amount to be drafted on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , including Prepayment PremiumsPrepayment PremiumsFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to Fannie Mae. Amounts must be reviewed, updated, and certified by 4:30 p.m. ET 1 Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. .
| 203.07C | |
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By the 23rd day of the month, the Summary of Processed Activity and other reports are available in the eServicing System for the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile with its internal records.
| 203.08A | |
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At the end of each Reporting Period, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reconcile the actual ending 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. balance for 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. in any given Security Pool to the ending Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. for that Security Pool. To perform this reconciliation, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must use the following calculation:
|
Function |
Ending Principal Balance for the Mortgage Loan in Security Pool (from current month) |
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PLUS |
Prepaid Principal (as of current month) |
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MINUS |
Delinquent Principal (as of current month) |
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MINUS |
Scheduled Principal (as of current month) |
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PLUS |
Principal Portion of Last Installment for Liquidated Mortgage Loan (as of current month) |
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Adjusted Principal Balance for Security Pool |
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MINUS |
Ending Security Balance for Reporting Period |
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EQUALS |
Difference |
| 203.08B | |
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Because the total amount of 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. that is issued for a Security Pool is rounded down to the next lowest whole dollar amount of the actual “Issue Date Principal BalanceIssue Date Principal BalanceFor any Securitized Mortgage Loan, the UPB of the Note after crediting: the principal portion of any scheduled monthly installment due on or before the Security Issue Date, whether or not collected; and any unscheduled principal payment received on or before the Security Issue Date. of 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. ”, the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. will be smaller than the actual UPBUPBUnpaid Principal Balance of 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. . The difference will never be greater than $0.99 for a single Security Pool. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust for this difference in the first monthly accounting report it submits after the Issue DateIssue DateFirst day of the month a Security is issued. of the SecuritySecurityMBS, PFP MBS, or REMIC. , classifying it as an “unscheduled” principal adjustment.
Other differences may arise in the reconciliation between the UPBUPBUnpaid Principal Balance of 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. in a Security Pool and the outstanding Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. . These differences cannot exceed more than $0.25 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. in the Security Pool. At least once a year, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make an adjustment to correct any differences.
1. If Security Balance is Greater than UPB
If the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. is higher than the UPBUPBUnpaid Principal Balance of 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately deposit the funds in the “scheduled/scheduled” P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. for Security Pools so that the funds can be passed through to Fannie Mae (as an “unscheduled” principal collection) with the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. next monthly remittance.
2. If Security Balance is Lower than UPB
If the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. is lower than the UPBUPBUnpaid Principal Balance of 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may adjust a subsequent pass-through amount that includes an “unscheduled” principal collection to correct for this difference.
The eServicing System produces a Pool-to-Security Reconciliation on a monthly basis to assist ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with review. ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are required to review and certify any pool-to-security difference each month by month end. Differences occur when the MBSMBSMortgage-Backed Security pool security balance does not match the sum of the scheduled UPBUPBUnpaid Principal Balance of 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. . Fannie Mae calculates pool-to-security differences after monthly 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. and SecuritySecurityMBS, PFP MBS, or REMIC. reporting is complete. For each pool with a difference, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the deficiency, research the difference, and determine the appropriate remedy. The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. certification includes the identification and selection of a deficiency reason, and a statement of how it should be resolved.
| Section 204 | |
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| 204.01 | |
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Generally the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payment consists of P&IP&IPrincipal and interest and deposits for insurance, taxes, replacement reserves and replacement hedges or some combination of such items. In some instances, the payment may include additional funds to be applied toward the UPBUPBUnpaid Principal Balance or to repay funds advanced by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must account for each portion of the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payment in the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. records. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must track both actual and scheduled 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. balances (a.k.a., Security Pool and SecuritySecurityMBS, PFP MBS, or REMIC. balances) and reconcile any outstanding difference (e.g., the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. advances for insufficient BorrowerBorrowerPerson who is the obligor per the Note. payments).
| 204.02 | |
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The interest calculation method is generally specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are required to calculate interest due for each 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. as required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not contain any information regarding the interest calculation method, then ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should assume a 30/360 accrual method.
Interest will accrue based upon the actual number of days in a calendar month and a 360-day year.
Interest will accrue based upon a 30-day month and a 360-day year.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enforce each 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. in accordance with the terms of the executed Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . This includes making periodic interest rate and payment adjustments in connection with any type of Adjustable Rate Mortgage LoansAdjustable Rate Mortgage LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must change 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. interest rate and monthly payments to the fullest extent permitted or required, maintaining at all times 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. margin specified in the executed Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . Factors used to determine the new interest rate for ARM Loans include:
- the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based;
- the “look back” period;
- any applicable interest rate change limitations; and
- 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. margin.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to make a timely interest rate or payment adjustment, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use its own funds to satisfy any shortage.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must determine the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. on which the rate is to be based as specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . To assist the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in monitoring indexes, Fannie Mae offers an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. service through its website on https://multifamily.fanniemae.com. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish procedures to monitor the IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to assure that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. uses the latest available IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. to determine an interest rate change.
Except for Fannie Mae Structured ARM Loans, a Required Monthly Payment change occurs at established intervals and corresponds to any change in the interest rate. The new monthly payment is calculated by determining the amount required to repay the UPBUPBUnpaid Principal Balance of 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. in substantially equal payments over the remaining amortization period of 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. at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method. 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 an interest-only 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. , the new monthly payment is the monthly interest payment at the interest rate in effect following the latest interest rate change utilizing the applicable Interest Calculation Method. The new Required Monthly Payment becomes effective on the first day of the month following the month in which the interest Rate Change Date occurs.
Prior to the effective date of the Monthly Payment/Rate Change the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Monthly Payment/Rate Change via the eServicing System. For assistance with rate and/or payment changes, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
In order for Fannie Mae to account for ARM LoansARM LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. on its books, Fannie Mae must receive the Monthly Payment/Rate Change on a timely basis.
| 205.03 | |
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Structured ARM Loans are subject to the same reporting and remittance requirements as other ARM LoansARM LoansMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. except for the differences described in this section.
The interest rate for Structured ARM Loans will be determined based on the applicable interest period (typically either 1-month or 3-months) for the applicable IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. using a 1-Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. look-back period per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and the requirements of the applicable Structured ARM Loan Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. . The applicable interest rate will be determined by adding 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. margin specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to the applicable IndexIndexBasis for determining the Gross Note Rate of an ARM Loan, including any required alternative index that may be determined necessary by Fannie Mae because the Index is no longer widely accepted or has been replaced as the index for similar financial instruments. value. No periodic or lifetime interest rate limitations apply to this computation.
Rate changes for Structured ARM Loans with a:
- 1-month interest period (Plan NumbersPlan NumbersNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03488 and 04932) will occur on the first payment date and the first day of each month thereafter until maturity as specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- 3-month interest period (Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03487) will occur on the first day of the month which is the second month following the first payment date and the first day of every third month thereafter until maturity as specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The first payment date will be:
- the 1st day of the month following the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , if the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. is the 1st calendar day of the month; or
- the 1st day of the second full calendar month following the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. for all other 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. .
For example, 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. closes on June 15th, the First Payment Date is on August 1st, and 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. closes on June 1st, the First Payment Date is on July 1st.
A Required Monthly Payment change occurs at established intervals and corresponds to any change in the interest rate, the number of days in an accrual period, or the UPBUPBUnpaid Principal Balance of 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 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. amortizes, the Required Monthly Payment is the sum of the monthly interest installment and the monthly principal installment. The monthly interest installment is calculated by multiplying the UPBUPBUnpaid Principal Balance of 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. by the interest rate in effect following the latest interest rate change utilizing an actual/360 interest accrual method. Equal monthly principal installments will be made over the term of 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. in the amount set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the Structured ARM Loan is interest-only, the Required Monthly Payment is the monthly interest payment which is calculated by multiplying the UPBUPBUnpaid Principal Balance of 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. by the interest rate in effect following the latest interest rate change utilizing an actual/360 interest accrual method as set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The new Required Monthly Payment becomes effective for Structured ARM Loans with a:
- 1-month interest period (Plan NumbersPlan NumbersNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03488 and 04932), on the 1st day of the month following the month in which the Rate Change Date occurs; or
- 3-month interest period (Plan NumberPlan NumberNumber identifying the applicable loan characteristics for any Mortgage Loan that accrues interest at a variable rate at any time during the loan term. 03487), on the 1st day of each month following any change in the interest rate or if the number of days in an accrual period is different from the prior month, as set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| Section 206 | |
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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. originated using Fannie Mae published NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. forms, the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly payments must be applied in the following order:
- any delinquent interest (other than interest attributable to the default interest rate);
- any delinquent principal;
- interest for the current month at the Gross Note RateGross Note RateInterest rate stated in the Loan Documents. ;
- principal for the current month;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any delinquency resolution costs, attorney fees, 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. fees, environmental assessment costs, or PCAPCAAssessment of the Property's physical condition and historical operation. costs;
- reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae for any payments to protect 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). ;
- late charges;
- default interest;
- T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. deposits; and
- Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. deposits.
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. not originated using Fannie Mae published NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. forms, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must apply monthly payments received from the BorrowerBorrowerPerson who is the obligor per the Note. as required by the relevant Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . If the Loans Documents do not provide for the order of application of monthly payments, then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the requirements for the Fannie Mae Post-1998 Loan Documents as provided in Part V, Chapter 2: Reporting and Remitting, Section 206.01: Fannie Mae Form Loan Documents.
| Section 207 | |
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When payments received from the BorrowerBorrowerPerson who is the obligor per the Note. are less than the total amount then due under 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. (including P&IP&IPrincipal and interest and T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , but may also include required deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or other monies due as required in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ), 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 in default and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the default procedures specified in:
- Part VI, Chapter 3: Non-Performing Primary Risk Mortgage Loans; or
- Part VI, Chapter 5: Non-Performing Secondary Risk Mortgage Loans.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not supplement partial payments received from the BorrowerBorrowerPerson who is the obligor per the Note. with funds from any Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. without Fannie Mae's prior written consent.
| Section 208 | |
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| 208.01 | |
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| 208.01A | |
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This Section 208 shall apply to all loans purchased by Fannie Mae (i) under the DUSDUSDelegated Underwriting and Servicing product line and (ii) under any contracts entered into after June 1, 2012, unless any such contract provides that this Section 208 shall not apply to such contract.
Whether or not the BorrowerBorrowerPerson who is the obligor per the Note. pays to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. the full amount due under 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. (other than a Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ), the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. will remit to Fannie Mae Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. in an amount equal to all monthly P&IP&IPrincipal and interest installments then owed under each 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. , net of Servicing FeesServicing FeesFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , in the manner and at the time the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is required to make remittances under the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. or the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. . The Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. agreement to make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. in respect of 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. constitutes a separate contractual obligation of the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. to Fannie Mae and is not a guaranty or surety of any obligation of the related BorrowerBorrowerPerson who is the obligor per the Note. . The Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. obligation to fund Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. , except in the case of Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where you bear all losses until your recourse obligation is exhausted. , is not intended to require advances of the principal balance due on the scheduled or accelerated maturity date for payment in full of 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. . The Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. obligation to fund Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. with respect to Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where you bear all losses until your recourse obligation is exhausted. shall include the obligation to fund the principal balance due on the scheduled or accelerated maturity date for payment in full of 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. .
Whether or not the BorrowerBorrowerPerson who is the obligor per the Note. pays to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. the full amount due on a Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , and whether such amounts are payable under the Financing Agreement, the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Reimbursement Agreement or other transaction documents, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. in amounts as follows, each in the amount as required to be made under the Financing Agreement, the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Reimbursement Agreement or other applicable transaction document, net of any Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. otherwise payable to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. :
- interest payments as required by the definition of Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. , net of Servicing FeesServicing FeesFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. ;
- monthly installments of principal owed on the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , or, if the transaction documents of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. require the BorrowerBorrowerPerson who is the obligor per the Note. to make deposits to a PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. in lieu of amortizing the principal of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. in whole or in part, deposit in a special custodial account meeting the requirements of the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. (“Special Custodial Account”) any amounts that the BorrowerBorrowerPerson who is the obligor per the Note. was obligated under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Reimbursement Agreement or other applicable transaction document to pay as deposits to the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. and transfer such funds in the Special Custodial Account to the applicable Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. at such time as the funds are required for a mandatory payment of P&IP&IPrincipal and interest under the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. ;
- the annual or other periodic fee of the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. as a continuing fee for the issuance of the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. and the provision of the financing for 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). ;
- the annual or other periodic continuing trust administration fee of the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. ;
- the annual or other periodic continuing fee of the rebate analyst, if any, for its rebate calculation services;
- the annual or other periodic continuing fee of the remarketing agent, if any, for its remarketing services;
- the Credit Enhancement FeeCredit Enhancement FeeFee due to Fannie Mae for a Credit Enhancement Instrument. ;
- if the transaction documents of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. require the BorrowerBorrowerPerson who is the obligor per the Note. to make deposits to a PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. in lieu of amortizing the principal of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. in whole or in part, the PRF Fee; and
- if the Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. contains a liquidity facility for the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , the Liquidity Fee.
The LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall make such advances to the party, in the manner and at the time the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is required to make such remittances under the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. . The Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. agreement to make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. in respect of a Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. constitutes a separate contractual obligation of the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. to Fannie Mae and is not a guaranty or surety of any obligation of the related BorrowerBorrowerPerson who is the obligor per the Note. .
Whether or not BorrowerBorrowerPerson who is the obligor per the Note. makes payments to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall make Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… as and when such amounts constituting Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… are required to be paid.
Whether or not the BorrowerBorrowerPerson who is the obligor per the Note. makes payments to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall make Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… on a Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. as and when such amounts constituting Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… are required to be paid. For each Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… shall include, in addition to those items set out in the definition of Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,…, all fees, costs and expenses, whether recurring or non-periodic, not covered by a Delinquency AdvanceDelinquency AdvanceYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. but necessary, as determined by Fannie Mae, to preserve or protect the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. or to exercise any legal or equitable remedies under the Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. , the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. or any of the other transaction documents (other than the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ).
Unless the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. expressly provides otherwise, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. until the earliest of:
- the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. purchase of 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. from Fannie Mae;
- the date on which BorrowerBorrowerPerson who is the obligor per the Note. cures 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. default;
- the date on which the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. makes the fourth of four continuous months of Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. ;
- the Asset Valuation DateAsset Valuation DatePer the Loss Sharing Addendum. established in accordance with Section 6.02 of the Loss Sharing Addendum; or
- the date on which the BorrowerBorrowerPerson who is the obligor per the Note. pays off 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. .
Notwithstanding the foregoing, (i) for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. to Fannie Mae as long as 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 held by the trust established in connection with such securitization, and (ii) for Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. to Fannie Mae as long as the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. are outstanding. However, in either case, LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. will receive reimbursement for such Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. upon request as required by Part V, Chapter 2: Reporting and Remitting, Section 208.02C: Reimbursement for Delinquency and Servicing Advances following the date on which LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. makes the fourth of four consecutive months of Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. or, if earlier, immediately following the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. of 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. and, thereafter, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. will receive reimbursement for each Delinquency AdvanceDelinquency AdvanceYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. upon request. If the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. believes that Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. with respect to 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. are no longer required to be made pursuant to this Section 208.02, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall notify Fannie Mae, in writing, and upon written confirmation by Fannie Mae that it concurs that no further Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. are required, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall cease making Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. with respect to such 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. .
Unless the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. expressly provides otherwise, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must make Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… until the earliest of:
- the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. purchase of 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. from Fannie Mae;
- the date on which the BorrowerBorrowerPerson who is the obligor per the Note. cures 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. default;
- the Asset Valuation DateAsset Valuation DatePer the Loss Sharing Addendum. related to a Foreclosure EventForeclosure EventAny of the following: Foreclosure per the Security Instrument; Fannie Mae's exercise of rights and remedies per the Security Instrument or applicable law (including Insolvency Laws) as holder of the Mortgage Loan and/or the Security Instrument, where Fannie Mae (or its designee or nominee),…, a sale 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). directed by a court of competent jurisdiction, a Discounted Loan Payoff, or Note Sale; or
- the date on which the BorrowerBorrowerPerson who is the obligor per the Note. pays off 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. .
The LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall not be required to make Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… to fund escrows or custodial accounts for taxes, assessments, and insurance premiums or to make payments to the accounts established for 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. ; provided, however, that the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must apply any partial payments (including 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… from 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). that, under applicable state law, is then available for use by Fannie Mae) in the manner specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
Upon the expiration of the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. obligation to make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. as provided above or, with respect to any Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. , following the date on which the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. makes the fourth of four consecutive months of Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. may, by written notice to Fannie Mae submitted on Fannie Mae Form 4828, together with any supporting documentation required by Fannie Mae, request reimbursement for any and all Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. made by the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. with respect to 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. .
Upon making a Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… with respect to 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. , LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. may, by written notice to Fannie Mae submitted on Fannie Mae Form 4829, together with any supporting documentation required by Fannie Mae, request reimbursement for such Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,….
Fannie Mae shall reimburse the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. for such Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. and Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… within 60 days following Fannie Mae’s receipt and approval of the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. written request.
This Section 208.02.C shall not apply to Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. or Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… made by the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. with respect to any Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan with an uncured default. with a Last Paid InstallmentLast Paid InstallmentDue date of the last payment received. prior to March 1, 2012.
Unless otherwise directed in writing by Fannie Mae, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must seek restitution of any Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… from the BorrowerBorrowerPerson who is the obligor per the Note. . For this repayment, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. may require the BorrowerBorrowerPerson who is the obligor per the Note. to make full restitution on the next occurring 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. payment due date or may permit the BorrowerBorrowerPerson who is the obligor per the Note. to make restitution payments over several months. Amounts due from the BorrowerBorrowerPerson who is the obligor per the Note. for which a Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… was made may include default interest on the Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… as permitted in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . Interest must be calculated from and including the date the Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… is made to but excluding the date the repayment is received. If the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. permits restitution over several months, such restitution payments will not be included in any required calculation of 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 Pay Preferred Equity payments. .
If the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. has been reimbursed by Fannie Mae for any Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… and receives restitution of such Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… from the BorrowerBorrowerPerson who is the obligor per the Note. , the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. shall promptly remit such amounts to Fannie Mae.
For the purpose of calculating monthly distributions to the SecuritySecurityMBS, PFP MBS, or REMIC. certificate holders or other investors, Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… will not be added to the scheduled principal balance of the related 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. , even though the terms of 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. may permit increases to the outstanding principal balance of 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. for such advances and may permit Fannie Mae or the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , as applicable, to pursue recovery of those advances from the BorrowerBorrowerPerson who is the obligor per the Note. . Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… do not reduce or modify the Borrower’sBorrower’sPerson who is the obligor per the Note. obligation under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Between Fannie Mae and the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , unless the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. expressly provides otherwise, so long as the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is obligated to make or has made Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. as provided in Part V, Chapter 2: Reporting and Remitting, Section 208.02A: Obligation to Make Delinquency Advances, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is entitled to retain 50 percent of the default interest collected from or on behalf of the BorrowerBorrowerPerson who is the obligor per the Note. . The other 50 percent of such default interest, to the extent collected from or on behalf of the BorrowerBorrowerPerson who is the obligor per the Note. , is remitted to and retained by Fannie Mae. Notwithstanding anything in this Section 208.05 to the contrary, with respect to any Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan with an uncured default. with a Last Paid InstallmentLast Paid InstallmentDue date of the last payment received. prior to March 1, 2012, if the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is obligated to make Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. then the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is entitled to all default interest collected from or on behalf of the BorrowerBorrowerPerson who is the obligor per the Note. with respect to such 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 LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is not obligated to make any Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. on a Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan with an uncured default. , all default interest shall be remitted to and retained by Fannie Mae. Without regard to whether the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. is making Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. , Fannie Mae is always entitled to the interest that accrues at the stated interest rate 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. net of the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. .
| Section 209 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit to Fannie Mae collections and other amounts due by the specified Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. established for each product type.
| 209.01 | |
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For purposes of this Section, the following terms shall have the definitions set forth below.
| 209.01A | |
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For each 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. , the interest portion, adjusted to the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. of the monthly installment (without regard as to whether such amount was collected), due on the first day of the month in which a Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. occurs or which becomes due at any time during the preceding month except the first day thereof.
| 209.01B | |
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For each 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. , the total of (1) the principal portion of the monthly installment due during the period beginning on the second day of the month preceding the month in which a Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. occurs and ending on the first day of the month in which a Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. occurs, without regard as to whether such amount was collected, and (2) any unscheduled principal recovery collected on 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. during the month preceding the month in which a Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. occurs.
| 209.01C | |
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The total of the Interest Distribution Amount and Principal Distribution Amount to be remitted to Fannie Mae on each Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. .
Monthly P&IP&IPrincipal and interest remittances begin on the initial Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. .
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Initial Remittance Date |
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Cash Mortgage Loans (including Mortgage Loans backing a PFP MBS) |
The month after Fannie Mae purchased 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. . |
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Securitized Mortgage Loans |
The month after the month the MBSMBSMortgage-Backed Security was issued. |
The final Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. occurs:
- 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. paying off on the scheduled Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. : in the month 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. matured and the security balance dropped to $0.00 (e.g., 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. pays off on its scheduled May 1 Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the final Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. will be May 18); or
- 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. being prepaid: in the month after the month 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 prepaid (e.g., 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. prepays anytime between May 2 and May 31, the final Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. will be June 18).
| 209.03 | |
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| 209.03A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make the monthly remittance funds available for drafting by ACHACHElectronic Automated Clearing House network for processing U.S. banking transactions. via the Cash Remittance SystemCash Remittance SystemMultifamily system where you set up and maintain banking instructions for Fannie Mae’s drafting of remittances per Part V, Chapter 2: Reporting and Remitting, Section 209: Remittance Procedures. on the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. .
| 209.03B | |
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To set up a Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. before the initial Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. :
- Open a Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. with an Eligible Depository per Part V, Chapter 3: Custodial Accounts, Section 301: Generally;
- Use the Cash Remittance SystemCash Remittance SystemMultifamily system where you set up and maintain banking instructions for Fannie Mae’s drafting of remittances per Part V, Chapter 2: Reporting and Remitting, Section 209: Remittance Procedures. to designate the custodial bank and Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. to be electronically debited or credited.
| 209.03C | |
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The Cash Remittance SystemCash Remittance SystemMultifamily system where you set up and maintain banking instructions for Fannie Mae’s drafting of remittances per Part V, Chapter 2: Reporting and Remitting, Section 209: Remittance Procedures. uses remittance codes linked to the:
- Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unique 9-digit ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. number; and
- specific Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. identified for the applicable product and execution.
Only 1 Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. per remittance code is permitted, either the:
- P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. for 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. category per Part V, Chapter 3: Custodial Accounts, Section 303.01: Accounts and Deposits; or
- consolidated Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure the:
- individual account drafting instructions, including assigned remittance codes, are coordinated with the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. internal fund processing; and
- transmissions to Fannie Mae include all necessary detail to ensure timely and accurate processing.
The SecuritySecurityMBS, PFP MBS, or REMIC. monthly remittance is the total of the Security Interest Distribution and Security Principal Distribution Amounts. For each month, the SecuritySecurityMBS, PFP MBS, or REMIC. monthly remittance must include the scheduled principal payment due on the first day of that month plus a full month's interest (calculated at the SecuritySecurityMBS, PFP MBS, or REMIC. Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) due in arrears for the previous month. It also may include unscheduled prepayments of principal.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is required to pass through to Fannie Mae in each SecuritySecurityMBS, PFP MBS, or REMIC. monthly remittance, the full scheduled amounts of P&IP&IPrincipal and interest , regardless of whether such amounts actually have been collected from the BorrowerBorrowerPerson who is the obligor per the Note. . A full month's interest (calculated at the SecuritySecurityMBS, PFP MBS, or REMIC. Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) must be included in each SecuritySecurityMBS, PFP MBS, or REMIC. monthly remittance, regardless of whether there has been any partial or full prepayment during the month.
The Security Interest Distribution Amount due is based on the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after application of the scheduled 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. payment due on the first of the previous month. For example, the Security Interest Distribution Amount due on November 18 would be based on the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after application of the scheduled 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. payment due on October 1 (not November 1).
To compensate Fannie Mae for the liability it assumes in issuing the SecuritySecurityMBS, PFP MBS, or REMIC. , Fannie Mae receives a Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. . The Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. is an obligation of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and must be paid in arrears on the 7th calendar day, or the preceding Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if the 7th calendar day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , of each month, even if there is no collection 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. or 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. reaches its Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. during the month. Payment of the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. begins with the month following the month in which the SecuritySecurityMBS, PFP MBS, or REMIC. is issued. Fannie Mae will draft the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. from the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. applicable designated P&I Custodial AccountsP&I Custodial AccountsCustodial Account for principal and interest deposits. for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. .
The Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. amount due Fannie Mae in any month is equal to either (a) for 30/360 interest accrual 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. , one-twelfth of the annual Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. rate times the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after application of the scheduled 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. principal payment due on the first day of the previous month, or (b) for actual/360 interest accrual 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. , the annual Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. rate divided by 360 times the number of days occurring in the month immediately preceding the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. payment date times the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after application of the scheduled 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. principal payment due on the first day of the previous month. For example, for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. amount due to Fannie Mae on November 7 is calculated on the Security BalanceSecurity BalanceFor an MBS Pool, the Issue Date Principal Balance minus any MBS principal distribution amounts included in previous MBS monthly remittances. remaining after application of the scheduled 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. principal payment due on October 1.
| 209.05B | |
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The monthly Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. must be remitted as long as the SecuritySecurityMBS, PFP MBS, or REMIC. is outstanding, even if there is no collection activity 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make funds available for the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. draft on the 7th calendar day of the month, or the preceding Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if the 7th is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
Under this process, Fannie Mae will send an electronic notice (or “bill”) on the 2nd or 3rd calendar day of each month. The draft notice will show the amount due for the Guaranty FeesGuaranty FeesFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. . When the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the transmission, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the draft notice for accuracy. If discrepancies are identified, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Fannie Mae by the 5th calendar day of the month to provide details on the amount and nature of the discrepancy. Fannie Mae will then review its records to validate the discrepancy and make any necessary adjustments to the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. bill. On the 7th calendar day of the month, Fannie Mae will draft the Guaranty FeesGuaranty FeesFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. from the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. designated P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. . If the 7th calendar day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , the draft will take place on the preceding Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
The Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. first remittance to Fannie Mae for 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. submitted under the Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. delivery option is an "interest-only" remittance because the BorrowerBorrowerPerson who is the obligor per the Note. will not have made the first payment. Accordingly, because the BorrowerBorrowerPerson who is the obligor per the Note. will not be required to send a monthly payment to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. under Same Month PoolingSame Month PoolingDelivery option permitting Mortgage Loans to be pooled and secure an MBS issued in the same month as the Mortgage Loan Origination Date. until the month following the date the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. first remittance is due to Fannie Mae, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will have to use some of its own funds to remit the interest that is "scheduled" to be passed through to Fannie Mae for 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. in that month and to make the first required Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. remittance. The interest remittance will represent one month's full interest, and will be equal to the Issue DateIssue DateFirst day of the month a Security is issued. principal balance of 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. times either (a) for 30/360 interest accrual 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. , one-twelfth of the annual Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. of the SecuritySecurityMBS, PFP MBS, or REMIC. , or (b) for actual/360 interest accrual 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. , the annual Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. of the SecuritySecurityMBS, PFP MBS, or REMIC. divided by 360 times the number of days occurring in the month of issuance of the SecuritySecurityMBS, PFP MBS, or REMIC. . The Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. payment will represent one month's full Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. , and be calculated as provided in Part V, Chapter 2: Reporting and Remitting, Section 209.05A: Guaranty Fee Due on 7th Calendar Day of Month based on Issue DateIssue DateFirst day of the month a Security is issued. principal balance of 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. .
Fannie Mae will not reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for its interest or Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. remittance. However, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- receive a partial month's interest based on the Note Rate from the BorrowerBorrowerPerson who is the obligor per the Note. at closing (from the date of closing through the end of the month), and
- receive interest based on the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. from the purchaser of the SecuritySecurityMBS, PFP MBS, or REMIC. (from the first day of the month in which the SecuritySecurityMBS, PFP MBS, or REMIC. is issued to the Book-Entry Delivery Date) as part of the sales proceeds for the SecuritySecurityMBS, PFP MBS, or REMIC. .
If, for any reason, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. cannot make funds available for drafting on the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to the designated Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. , it must immediately notify Fannie Mae by calling the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must describe to Fannie Mae all circumstances and conditions that prevent the monthly remittance from being made on time.
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When the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives a Borrower’sBorrower’sPerson who is the obligor per the Note. notification of intent to prepay 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. , it must examine the specific NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. (including any applicable addendum, exhibit, modification, or amendment) and Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. (and any applicable rider, exhibit, modification or amendment) to determine whether prepayment of 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 permitted and, if so, under what conditions. The prepayment provisions of the actual Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. govern in each case.
The Borrower’sBorrower’sPerson who is the obligor per the Note. proposed prepayment date and the timing of its advance notification of its intent to prepay must be consistent with the provisions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain from the BorrowerBorrowerPerson who is the obligor per the Note. the date on which the BorrowerBorrowerPerson who is the obligor per the Note. will prepay 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. . The BorrowerBorrowerPerson who is the obligor per the Note. must give the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. advance notice of its intent to make a full prepayment as required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If a Fannie Mae form Multifamily Note evidences 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. , a prepayment may be made only on the last Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before a scheduled 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. payment date. Non-Fannie Mae form NotesNotesInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. may not contain the same requirement. Some NotesNotesInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. may contain lockout provisions that prohibit full prepayment for a specified period of time. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not permit a payoff that does not comply with the requirements contained in the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Fannie Mae, in writing or through the Fannie Mae Payoff Calculator, upon receiving notice from the BorrowerBorrowerPerson who is the obligor per the Note. of a planned prepayment. Notice of the planned prepayment must be received by Fannie Mae not later than 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to the contemplated payoff date. The Fannie Mae Payoff Calculator may only be used when the Fannie Mae form Multifamily Note evidences 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the payoff figure quoted to the BorrowerBorrowerPerson who is the obligor per the Note. is correct. Accordingly, before the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. advises the BorrowerBorrowerPerson who is the obligor per the Note. of the full prepayment payoff amount, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm such amount with Fannie Mae. The Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. request for confirmation of the full prepayment payoff amount must be submitted to Fannie Mae at least 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the scheduled prepayment date. At least 5 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to the scheduled prepayment date, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide the BorrowerBorrowerPerson who is the obligor per the Note. written confirmation of the amount required to pay off 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. in full.
1. Calculating the Full Prepayment Payoff Amount
To obtain Fannie Mae’s confirmation of the full prepayment payoff amount, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must either submit a written statement detailing all amounts that it believes will be due and payable by the BorrowerBorrowerPerson who is the obligor per the Note. on the prepayment date or submit the information through the Payoff Calculator, including:
- the UPBUPBUnpaid Principal Balance of 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. (as of the prepayment date);
- all accrued and to-be accrued interest, broken down into the net interest portion due to Fannie Mae (calculated at the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) and the portion to be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as a Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , calculated as if the payoff is occurring on the last day of the month in which the prepayment is occurring;
- any unpaid late fees, if applicable;
- any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. that is due in connection with the full prepayment, broken down into the portions due to Fannie Mae and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , respectively; and
- any other amounts due under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or any other Mortgage Loan DocumentMortgage Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including, if applicable, any unpaid fee due under any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
2. Fannie Mae Will Not Confirm Nor Is Responsible for Amounts Owing to Servicer
Fannie Mae is not responsible for confirming any amounts owed to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at the time of the prepayment (e.g., any administrative fees due for services performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ); however, the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff statement must clearly denote any such amounts so that Fannie Mae can distinguish them from amounts due exclusively to Fannie Mae. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is solely responsible for ensuring that any payoff quote given to the BorrowerBorrowerPerson who is the obligor per the Note. includes any amounts that are owed exclusively to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as Fannie Mae will not reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for such amounts from any of the funds that the BorrowerBorrowerPerson who is the obligor per the Note. remits to cover the amounts confirmed as being due to Fannie Mae.
3. Fannie Mae Confirmation of Full Prepayment Payoff Amount for Primary Risk Mortgage Loans
Fannie Mae will review the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures and contact the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile any discrepancies. Upon completion of its review and any necessary reconciliation, Fannie Mae will respond in writing to the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. verification request. In its response, Fannie Mae will confirm the total payoff amount due to Fannie Mae, as well as the individual items comprising such total amount, including:
- the UPBUPBUnpaid Principal Balance of 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. ;
- the net accrued interest due Fannie Mae;
- any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. (broken down into the portions due to Fannie Mae and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ); and
- any previously unpaid fees or other amounts owed to Fannie Mae.
Fannie Mae will provide any pertinent instructions for completing the prepayment payoff process, including any specific instructions that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must include in its payoff quote to the BorrowerBorrowerPerson who is the obligor per the Note. .
4. No Quote to Borrower until Fannie Mae Confirmation for Primary Risk Mortgage Loans
To ensure that the BorrowerBorrowerPerson who is the obligor per the Note. is quoted the correct payoff amount, including any applicable accrued interest, Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , late fees, or other amounts that might be owed under the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or the other Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not quote a final payoff amount to the BorrowerBorrowerPerson who is the obligor per the Note. without first obtaining Fannie Mae’s confirmation of the accuracy of the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures.
5. Fannie Mae Confirmation of Full Prepayment Payoff Amount for Secondary Risk Mortgage Loans
Unless the Lender’s ContractLender’s ContractProgram Documents per the Multifamily Selling and Servicing Agreement. provides otherwise, Fannie Mae will not review the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff calculation for Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where you bear all losses until your recourse obligation is exhausted. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is solely responsible for ensuring that any payoff quote given to the BorrowerBorrowerPerson who is the obligor per the Note. includes all amounts that are owed to Fannie Mae and to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
6. Servicer Liability
Whether confirmed by Fannie Mae through the Payoff Calculator or the payoff calculation is performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is required to collect all amounts owing by the BorrowerBorrowerPerson who is the obligor per the Note. on 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. payoff. If Fannie Mae determines that ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has provided the BorrowerBorrowerPerson who is the obligor per the Note. incorrect information because of an error in the calculation of the payoff quote, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be responsible for any shortfall and must remit all amounts due to Fannie Mae whether or not it has collected such amounts from the BorrowerBorrowerPerson who is the obligor per the Note. .
1. Full Prepayment Payoff Amount Received on First Business Day of Month
Notwithstanding anything to the contrary above, any full prepayment of 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. from or on behalf of a BorrowerBorrowerPerson who is the obligor per the Note. that is received by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. on the first Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of a month will be deemed received in the prior calendar month for purposes of reporting and remitting such full prepayment.
2. Full Prepayment Reported through the eServicing System Due By 2nd Day of Month
The full prepayment must then be reported electronically to Fannie Mae through the eServicing System. The report of the full payment must be transmitted in time to reach Fannie Mae by the 2nd calendar day of the month following the month of prepayment.
1. Using Pass-Through Rate to Calculate Remittance to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. to calculate its P&I remittance to Fannie Mae. After collecting payoff proceeds, calculated in the manner described above at the Gross Note RateGross Note RateInterest rate stated in the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must subtract its Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , calculated using a per diem rate based on the interest accrual method provided for in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
2. Remittance Due on Remittance Date
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the prepayment amount on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. in the month after the prepayment occurs per the remittance requirements in this Chapter.
1. Calculating the Full Prepayment Payoff Amount
To obtain Fannie Mae’s confirmation of the final payoff amount for a Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a statement, detailing:
- All amounts that it has determined will be due and payable by the BorrowerBorrowerPerson who is the obligor per the Note.
on the prepayment date, including:
- the UPBUPBUnpaid Principal Balance of the loan (as of the prepayment date);
- all accrued and to-be accrued interest, broken down into the net interest portion due to Fannie Mae (calculated at the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) and the portion to be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as a Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , calculated as if the payoff is occurring on the last day of the month in which the prepayment is occurring;
- any unpaid late fees, if applicable;
- any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , if any, that is due in connection with the full prepayment specifying the respective portions due Fannie Mae, the SecuritySecurityMBS, PFP MBS, or REMIC. certificate holder and ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- any other amounts due under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or any other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including, if applicable, any unpaid fee due under any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
- All amounts that will be due and payable to Fannie Mae by the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan.
in the month following the month of prepayment, including:
- the UPBUPBUnpaid Principal Balance of the loan;
- a full month's accrued interest, calculated at the MBSMBSMortgage-Backed Security Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ;
- any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. broken down into the portions due to the MBSMBSMortgage-Backed Security investor, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and Fannie Mae calculated in accordance with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ; and
- any previously unpaid fees or other amounts owed to Fannie Mae.
2. Fannie Mae Will Not Confirm Nor Is Responsible for Amounts Owing to Servicer
Fannie Mae is not responsible for confirming any amounts owed to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at the time of the prepayment (e.g., any administrative fees due for services performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ); however, the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff statement must clearly denote any such amounts so that Fannie Mae can distinguish them from amounts due exclusively to Fannie Mae, and the MBSMBSMortgage-Backed Security investor, if applicable.
3. Fannie Mae Confirmation of Full Prepayment Payoff Amount for Primary Risk Mortgage Loans
Fannie Mae will review the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures and contact the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile any discrepancies for Primary Risk Mortgage LoansPrimary Risk Mortgage LoansMortgage Loan where Fannie Mae bears all losses or you and Fannie Mae share losses. . Upon completion of its review and any necessary reconciliation, Fannie Mae will respond (in writing) to the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. verification request. In its response, Fannie Mae will confirm the total payoff amount due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. from the BorrowerBorrowerPerson who is the obligor per the Note. , and will also separately confirm the amounts due to Fannie Mae from the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as well as individual items comprising such total amounts, including:
- the UPBUPBUnpaid Principal Balance of 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. ; and
- accrued interest due:
- any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. (broken down into the portions due to Fannie Mae, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and the MBSMBSMortgage-Backed Security investor); and
- any previously unpaid fees or other amounts owed to Fannie Mae.
4. No Quote to Borrower Until Fannie Mae Confirmation for Primary Risk Mortgage Loans
To ensure that the BorrowerBorrowerPerson who is the obligor per the Note. is quoted the correct payoff amount, including any applicable accrued interest, Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , late fees, or other amounts that might be owed under the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or the other Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not quote a final payoff amount to the BorrowerBorrowerPerson who is the obligor per the Note. without first obtaining Fannie Mae’s confirmation of the accuracy of the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures.
5. Fannie Mae Confirmation of Full Prepayment Payoff Amount for Secondary Risk Mortgage Loans
Fannie Mae will not review the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff calculation for Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where you bear all losses until your recourse obligation is exhausted. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is solely responsible for ensuring that any payoff quote given to the BorrowerBorrowerPerson who is the obligor per the Note. includes all amounts that are owed to Fannie Mae and to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
6. Servicer Liability
Whether confirmed by Fannie Mae through the Payoff Calculator or the payoff calculation is performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is required to collect all amounts owing by the BorrowerBorrowerPerson who is the obligor per the Note. on 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. payoff. If Fannie Mae determines that ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has provided the BorrowerBorrowerPerson who is the obligor per the Note. incorrect information because it quotes a final payoff amount to the BorrowerBorrowerPerson who is the obligor per the Note. prior to Fannie Mae confirmation or has erred in its calculation of the payoff quote where Fannie Mae confirmation is not provided, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be responsible for any shortfall and must remit all amounts due to Fannie Mae whether it has collected such amounts from the BorrowerBorrowerPerson who is the obligor per the Note. .
1. Security Reporting
By the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the month of prepayment, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the amount of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. collected to Fannie Mae via the eServicing System in accordance with the reporting requirements provided in this Chapter.
2. Mortgage Loan Reporting Requirements
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the prepayment amount, including any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , to Fannie Mae by the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the month in which the prepayment occurs in accordance with the reporting requirements provided in this Chapter.
Under MBSMBSMortgage-Backed Security , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit a full month's accrued interest (calculated at the MBSMBSMortgage-Backed Security Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) for each month that the MBSMBSMortgage-Backed Security is outstanding, even if a full or partial prepayment occurs during that month. Any shortfall between the interest collected from the BorrowerBorrowerPerson who is the obligor per the Note. and the full month's interest that is due to Fannie Mae must be deposited in the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. MBSMBSMortgage-Backed Security P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. from the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. own funds and remitted to Fannie Mae. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also remit a full month's Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. for each month that the MBSMBSMortgage-Backed Security is outstanding, even if a full or partial prepayment occurs during that month.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the prepayment amount on the Remittance DateRemittance DateThe 18th day of each month (or the preceding Business Day if the 18th is not a Business Day) on which you must submit your remittance to Fannie Mae for the Mortgage Loan. in the month after the payoff occurs per the remittance requirements in this Chapter.
Partial prepayment of the outstanding balance of 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. is prohibited unless explicitly permitted in the Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . Under certain circumstances, to the extent permitted in the Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the proceeds of a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. held pursuant to an Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or deposits held under a Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. may be applied as a partial prepayment of 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. .
Any request from the BorrowerBorrowerPerson who is the obligor per the Note. for permission to make a partial prepayment must be forwarded to the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). , along with the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis and recommendation. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must carefully examine the Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to determine if partial prepayments are permitted and, if so, under what conditions and whether a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is required. The Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis of the request must include information about:
- the event or condition precipitating the prepayment request;
- the amount of principal that would be prepaid;
- the estimated Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , if any, that would be due in connection with the partial prepayment;
- any proposed recasting of 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. or other modification of the repayment terms; and
- the proposed timing of the prepayment.
Unless the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. expressly permit partial prepayments, Fannie Mae's approval is required before any partial prepayment is made. If the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). agrees to allow or requires a partial prepayment to be made, it will advise the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in writing of any specific conditions that will apply to such partial prepayment. Such specific conditions may include:
- when and how the prepayment must occur;
- whether a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. must be paid; and
- whether 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. repayment terms will be altered and, if so, how the Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. would have to be modified to reflect such alterations, etc.
Any decision to modify 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. repayment terms in connection with the partial prepayment will be made by Fannie Mae, in its sole and absolute discretion.
When a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is required in connection with any partial prepayment, the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is assessed on the amount of principal being prepaid and not on the outstanding UPBUPBUnpaid Principal Balance of 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. calculated and verified in the same manner as is required for full prepayments.
Partial prepayments must be reported in the same manner as is required for full prepayments. When Fannie Mae’s approval is received, the proceeds representing the partial prepayment, including the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. (when required pursuant to the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ), must be remitted to Fannie Mae in the same manner and timeframe as required for full prepayments.
Fannie Mae approval is not required when the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit partial prepayments. Any such partial prepayments must be reported and remitted to Fannie Mae in the same manner and timeframe as is required for monthly remittances.
Partial prepayment of 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 generally permitted for the application of the proceeds of an insurance claim or a condemnation award. ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the requirements contained in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. in connection with any such partial prepayment.
The BorrowerBorrowerPerson who is the obligor per the Note. is not required to pay a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. in connection with any prepayment that occurs as a result of the application to 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. of insurance proceeds or condemnation award proceeds, regardless of when during 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. term such prepayment occurs.
The proceeds representing the partial prepayment must be reported and remitted to Fannie Mae in the same manner and timeframe as is required for monthly remittances.
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The Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. governs over the requirements of the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. if it specifies whether the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is entitled to retain a portion of any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. paid by the BorrowerBorrowerPerson who is the obligor per the Note. . If the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. provides that the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is entitled to retain a portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must calculate the applicable share of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. owed to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and remit to Fannie Mae that portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. owed to Fannie Mae or the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. . If the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. provides that the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not entitled to retain a portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , then the entire Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. must be remitted to Fannie Mae.
If the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. does not specify whether the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is entitled to retain a portion of any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is entitled to retain a portion of any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. only as provided below.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must always remit the portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. and to Fannie Mae with the final 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. payment, retaining the balance of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as provided above. Upon receipt, Fannie Mae will pass through the portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due to the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. .
For any prepayment that occurs before the Yield Maintenance Period End DateYield Maintenance Period End DateLast day on which a Borrower owes yield maintenance for a voluntary Mortgage Loan prepayment. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must first determine the total Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. owing by the BorrowerBorrowerPerson who is the obligor per the Note. in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. generally require the BorrowerBorrowerPerson who is the obligor per the Note. to pay a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. equal to the greater of (i) 1% of the UPBUPBUnpaid Principal Balance (the “Minimum 1% Prepayment PremiumMinimum 1% Prepayment PremiumFor a prepayment, an amount equal to 1% of the UPB. ”), or (ii) yield maintenance.
Fannie Mae does not guarantee payment of any portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. to the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. . The InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. only receives a share of any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. actually received from the BorrowerBorrowerPerson who is the obligor per the Note. . For a Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must calculate the Investor'sInvestor'sMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. share of the total Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. as follows using the yield rate specified per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. :
(Principal prepaid) x (Pass-Through Rate – yield rate) x (present value factor).
If the result is negative, the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. receives no Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. share.
For both Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. and Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must calculate Fannie Mae’s share of the total Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .
If the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is greater than the Minimum 1% Prepayment PremiumMinimum 1% Prepayment PremiumFor a prepayment, an amount equal to 1% of the UPB. , the difference between the total Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. and the Investor’sInvestor’sMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. portion will be shared between Fannie Mae and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
Fannie Mae’s share equals:
- for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. :
(total Prepayment Premium - Investor’s portion) x (Guaranty Fee / (Guaranty Fee + Servicing Fee)); and
- for Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. :
total Prepayment Premium - Servicer's share (calculated per Part V, Chapter 2: Reporting and Remitting, Section 213.02D: Calculation of Servicer’s Share of Total Prepayment Premium).
If the total Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. equals the Minimum 1% Prepayment PremiumMinimum 1% Prepayment PremiumFor a prepayment, an amount equal to 1% of the UPB. , Fannie Mae’s share equals the entire remaining Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. above the Investor’sInvestor’sMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. portion.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives a portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. only if the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. exceeds the Minimum 1% Prepayment PremiumMinimum 1% Prepayment PremiumFor a prepayment, an amount equal to 1% of the UPB. .
The Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. share equals:
- for Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. :
(total Prepayment Premium - Investor's portion) x (Servicing Fee / (Guaranty Fee + Servicing Fee)); and
- for Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. :
total Prepayment Premium x (Servicing Fee / (Pass-Through Rate + Servicing Fee)).
The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. may provide that any full prepayment that occurs on or after the Yield Maintenance Period End DateYield Maintenance Period End DateLast day on which a Borrower owes yield maintenance for a voluntary Mortgage Loan prepayment. but before a date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (typically the last calendar day of the fourth month prior to the month in which the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. occurs), must be accompanied by a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. equal to a stated amount (usually 1% of the UPBUPBUnpaid Principal Balance of 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. ). Neither the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. nor the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is entitled to any portion of any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. paid on or after the Yield Maintenance Period End DateYield Maintenance Period End DateLast day on which a Borrower owes yield maintenance for a voluntary Mortgage Loan prepayment. . The entire Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. must be remitted to Fannie Mae.
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. may provide that the BorrowerBorrowerPerson who is the obligor per the Note. is not required to pay any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. in connection with a full prepayment made on or after a date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (typically the last calendar day of the fourth month prior to the month in which the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. occurs).
For fixed rate 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. where the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require a graduated Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not entitled to retain any portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. . The entire Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. must be remitted to Fannie Mae.
Unless the prepayment of an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. that used Prepayment Option 1 or Prepayment Option 2, or of a Structured ARM Loan is the result of a casualty or condemnation, any prepayment made before a date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (typically the last calendar day of the fourth month prior to the month in which the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. occurs) must include a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. that will be shared between Fannie Mae and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. is not entitled to receive any portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. for either an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. or a Structured ARM Loan. In each case, Fannie Mae’s share will be a percentage determined by the following formula:
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Guaranty Fee (Guaranty Fee + Servicing Fee) |
For example, if the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. is 62.5 basis points and if the Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. is 45 basis points, then Fannie Mae's share will be:
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62.5 (62.5 + 45) |
or |
58.14%. |
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due Fannie Mae with the final 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. payment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may retain the balance of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. .
No Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. is due in connection with an ARM LoanARM LoanMortgage Loan with an interest rate that periodically adjusts based on an Index per the Note or Loan Documents. with a conversion option or with a Structured ARM Loan that is converting to a fixed rate 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not waive any portion of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. due and owing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , except as provided in Part III, Chapter 17: Choice Refinance Loans, Section 1703: Prepayment Premiums in connection with a Choice Refinance LoanChoice Refinance LoanMortgage Loan refinancing a Portfolio Mortgage Loan using streamlined underwriting per Part III, Chapter 18: Choice Refinance Loans. .
No portion of the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. share of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. may be:
- waived by the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. ;
- used as a rebate to the BorrowerBorrowerPerson who is the obligor per the Note. , or any party related to the BorrowerBorrowerPerson who is the obligor per the Note. , for any purpose; or
- used for the payment of any expenses related to any loan used to refinance 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. .
| Section 214 | |
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| 214.01 | |
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Fannie Mae expects any BorrowerBorrowerPerson who is the obligor per the Note. with a Balloon Mortgage LoanBalloon Mortgage LoanMortgage Loan with periodic installments of principal and interest that do not fully amortize the Mortgage Loan, with the balance of the Mortgage Loan due in a lump sum on a specified date, usually the Maturity Date. to refinance or otherwise pay off 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. in full on (or before) the scheduled Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. . Failure to pay off 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. in full on (or before) the scheduled Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. is a default and puts the BorrowerBorrowerPerson who is the obligor per the Note. at risk that Fannie Mae will exercise any available remedy under the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. and the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . Whenever a BorrowerBorrowerPerson who is the obligor per the Note. fails to pay off a Balloon Mortgage LoanBalloon Mortgage LoanMortgage Loan with periodic installments of principal and interest that do not fully amortize the Mortgage Loan, with the balance of the Mortgage Loan due in a lump sum on a specified date, usually the Maturity Date. on its Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). of such failure as soon as possible, and must report the balloon payment default on the Multifamily Delinquency System®. Any acceptance of a payoff amount occurring after the Balloon Mortgage LoanBalloon Mortgage LoanMortgage Loan with periodic installments of principal and interest that do not fully amortize the Mortgage Loan, with the balance of the Mortgage Loan due in a lump sum on a specified date, usually the Maturity Date. ’s stated Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. must be approved by Fannie Mae.
At least 5 days prior to the scheduled Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. of 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advise the BorrowerBorrowerPerson who is the obligor per the Note. in writing of the amount required to pay off 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. in full. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the payoff figure quoted to the BorrowerBorrowerPerson who is the obligor per the Note. is correct.
The Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. request for verification of the final payoff amount must be submitted to Fannie Mae at least 10 days before the scheduled Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. . To obtain Fannie Mae’s confirmation of the final payoff amount, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a statement, detailing all amounts that it believes will be due and payable by the BorrowerBorrowerPerson who is the obligor per the Note. on the payoff date, including:
- the UPBUPBUnpaid Principal Balance of 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. (as of the payoff date);
- accrued interest, up to the payoff date, broken down into the net interest portion due to Fannie Mae (calculated at the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) and the portion to be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as a Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. ;
- any unpaid late fees, if applicable; and
- any other amounts due under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or any other Mortgage Loan DocumentMortgage Loan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including, if applicable, any unpaid fee due under any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
Fannie Mae is not responsible for confirming any amounts owed to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at the time of the payoff (e.g., any administrative fees due for services performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ); however, the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff statement must clearly denote any such amounts so that Fannie Mae can distinguish them from amounts due exclusively to Fannie Mae. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is solely responsible for ensuring that any payoff quote given to the BorrowerBorrowerPerson who is the obligor per the Note. includes any amounts that are owed exclusively to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as Fannie Mae will not reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for such amounts from any of the funds that the BorrowerBorrowerPerson who is the obligor per the Note. remits to cover the amounts confirmed as being due to Fannie Mae.
Fannie Mae will review the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures and contact the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile any discrepancies. Upon completion of its review and any necessary reconciliation, Fannie Mae will respond (in writing) to the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. verification request. In its response, Fannie Mae will confirm the total payoff amount due to Fannie Mae, as well as the individual items comprising such total amount, including:
- the UPBUPBUnpaid Principal Balance of 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. ;
- the net accrued interest due Fannie Mae;
- any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. ; and
- any previously unpaid fees or other amounts owed to Fannie Mae.
Fannie Mae also will provide any pertinent instructions for completing the payoff process, including any specific instructions that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must pass along to the BorrowerBorrowerPerson who is the obligor per the Note. with the payoff quote.
To ensure that the BorrowerBorrowerPerson who is the obligor per the Note. is quoted the correct payoff amount, including any applicable accrued interest, Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , late fees, or other amounts that might be owed under the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , or the other Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not quote a final payoff amount to the BorrowerBorrowerPerson who is the obligor per the Note. without first obtaining Fannie Mae’s confirmation of the accuracy of the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures.
The full payoff must be reported electronically to Fannie Mae through the eServicing System. The report of the full payment must be transmitted in time to reach Fannie Mae by the 2nd Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the month of payoff.
| 214.04B | |
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1. Using Pass-Through Rate to Calculate Remittance to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. to calculate its P&IP&IPrincipal and interest remittance to Fannie Mae. After collecting payoff proceeds, calculated in the manner described above at the Gross Note RateGross Note RateInterest rate stated in the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must subtract its Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , calculated using a per diem rate based on a 360-day year.
2. Remittance Due on Next Remittance Cycle for Cash Mortgage Loans and Securitized Mortgage Loans
For Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the reporting and remitting procedures for monthly installment reporting and remitting.
| Section 215 | |
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| 215.01 | |
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| 215.01A | |
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To facilitate the return of release documents from Fannie Mae, at all times the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain on file with Fannie Mae a master file copy of the Custody Document Transmittal (Form 276) completed with the following information:
- the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. nine digit ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. number;
- “MASTER FORM” entered for the Fannie Mae Loan NumberLoan Number10-digit number assigned by Fannie Mae to each Mortgage Loan. ;
- “Payoff” checked as the liquidation reason; and
- the Lender’sLender’sPerson Fannie Mae approved to sell or service Mortgage Loans. mailing address.
The completed form must be sent to Multifamily Master ServicingMultifamily Master ServicingTeam that can be contacted at [email protected]. . If the mailing information for the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. changes at any time, the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must update the master file copy of the Custody Document Transmittal (Form 276) with Fannie Mae.
For each 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. , upon receipt of the payoff funds from the BorrowerBorrowerPerson who is the obligor per the Note. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- refund to the BorrowerBorrowerPerson who is the obligor per the Note. any T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow funds and any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds still held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with 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. (must be accomplished within 30 days of the payoff); and
- send the following to Fannie Mae:
- if the release documents are to be sent to a different mailing address than that listed on the master file copy of the Custody Document Transmittal (Form 276) with Fannie Mae, a transaction-specific Custody Document Transmittal (Form 276), requesting Fannie Mae to return the original NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. and indicating the different address to which the release documents for that specific 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. should be sent;
- for all recorded Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (e.g., Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ) that require a release, the appropriate release document for the state in which 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 located; and
- a request to Multifamily Servicing to release any additional collateral still held by Fannie Mae in connection with 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. .
Fannie Mae will execute the necessary releases, and return them, along with the original NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. (appropriately marked or stamped to evidence full satisfaction), to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must return the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. to the BorrowerBorrowerPerson who is the obligor per the Note. , file the appropriate UCCUCCUniform Commercial Code termination forms and arrange to have the release documents recorded. Fannie Mae will be responsible for returning any applicable Achievement Letter of CreditAchievement Letter of CreditLetter of Credit that is released as collateral when a certain event occurs or a requirement is met (e.g., construction completion, or minimum occupancy or EGI level reached). to the issuer for cancellation.
Following its return to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. and the releases for all recorded Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Fannie Mae will forward its file for 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. to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the entire 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. Servicing FileServicing FileYour file for each Mortgage Loan serviced. for 7 years after 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. payoff.
The requirements of this Section are applicable to Bond Credit Enhancement Transactions only and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reporting, collection, and remitting of prepayments must be done in accordance with the procedures described below.
For reporting purposes, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must segregate its DUS Bond Credit Enhancement portfolio into 2 groups:
- DUS Bond Credit Enhancement by Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. and Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; or
- DUS Bond Credit Enhancement by a SecuritySecurityMBS, PFP MBS, or REMIC. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must electronically submit a Credit Enhancement Activity Report (Form 4090) using the Credit Enhancement Servicing and Investor Reporting System (CESIR) for each DUSDUSDelegated Underwriting and Servicing 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. Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. and 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. each month. The date that the Credit Enhancement Activity Report is due is dependent on whether 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. monthly P&IP&IPrincipal and interest payments are due on the first of the month or on the 15th of the month.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must register to use CESIRCESIRCredit Enhancement Servicing and Investor Reporting System prior to use. Information regarding registering for CESIRCESIRCredit Enhancement Servicing and Investor Reporting System can be found on https://multifamily.fanniemae.com/applications-technology/cesir.
For most DUS Bond Credit Enhancements, the monthly reporting rule is applied as follows:
- 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. payments are due on the first of the month, the report is due on the fourth calendar day of the month or the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if the fourth calendar day of the month is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ; or
- 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. payments are due on the 15th day of the month, the report is due on the 15th calendar day of the same month or the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if such day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
The monthly report must include:
- all scheduled 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. payments to be made by the BorrowerBorrowerPerson who is the obligor per the Note. whether or not such payments are actually made by the BorrowerBorrowerPerson who is the obligor per the Note. ; and
- bond redemptions reported by the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. for the current calendar month.
Monthly remittances to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. depend on the execution type for the transaction and applicable transaction requirements.
1. Standby Execution
For StandbyStandbyCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) if the Borrower fails to make required mortgage note payments or if a bankruptcy event has occurred. executions, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must pay the Scheduled Payments (net of the Facility Fee) to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make the payment to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. by wire transfer of same day funds on or before the 5th 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. Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the day on which the bond payment is due to be made by the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. to the bondholders. 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. Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. is determined under the Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. for each separate 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. transaction.
2. Direct PayDirect PayCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) regardless of whether the Borrower has reimbursed Fannie Mae for such payments. Execution
For direct pay executions, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform the following:
a. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must pay to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , by wire transfer of same day funds on the Bond Payment Date, the following components of the Scheduled Payment:
(1) the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. deposit;
(2) the periodic fees payable to the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. , Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , Rebate Analyst, any Compliance Monitor, Remarketing AgentRemarketing AgentPerson selected by the Issuer to reset the interest rate on the Bonds in order to resell any Bonds tendered by investors on the interest rate reset date. and Tender Agent and any other similar person; and
(3) any other requirement, as specified in the Reimbursement Agreement.
b. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the following components of the Scheduled Payment to Fannie Mae in reimbursement of any related Advance under the credit enhancement as provided in this Section:
(1) the interest component; and
(2) any principal component which is to amortize immediately 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. and is not to be deposited into the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. .
c. For Direct PayDirect PayCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) regardless of whether the Borrower has reimbursed Fannie Mae for such payments. Weekly Variable Rate transactions where the BorrowerBorrowerPerson who is the obligor per the Note. is obligated to make its payments 2 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. prior to the 15th of each month and the bondholders must be paid on the 15th of each month, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must make its payments by wire transfer of same day funds on the 1st or 15th calendar day of each month. Other requirements may apply, as specified in the Reimbursement Agreement.
If the BorrowerBorrowerPerson who is the obligor per the Note. pays the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. any amount to replenish a withdrawal from the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. shall pay such amount to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. not later than 2:00 p.m. Eastern Time, no later than the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. immediately after receipt of such monies from the BorrowerBorrowerPerson who is the obligor per the Note. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must pay the following amounts to Fannie Mae:
1. The interest component of the Scheduled Payment and principal component of the Scheduled Payment which is to amortize immediately 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. and is not to be deposited into the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. . Such amounts reimburse Fannie Mae for the related Advance under a Credit Enhancement InstrumentCredit Enhancement InstrumentAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. or Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
2. Any accrued and unpaid Activity Fee.
3. Any other amounts due to Fannie Mae under the Reimbursement Agreement other than the Facility Fee.
Fannie Mae will draft such amounts so as to be received by Fannie Mae no later than the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. immediately after the receipt of such monies from the BorrowerBorrowerPerson who is the obligor per the Note. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also collect from the BorrowerBorrowerPerson who is the obligor per the Note. and remit to Fannie Mae any other fees, expenses or additional costs due from the BorrowerBorrowerPerson who is the obligor per the Note. to Fannie Mae under the Reimbursement Agreement. Fannie Mae and/or the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. regarding any such amounts to be invoiced by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for payment by the BorrowerBorrowerPerson who is the obligor per the Note. under the Reimbursement Agreement, the Financing Agreement or other Transaction Document.
Fannie Mae will draft the Facility Fee, net of the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. each month. Fannie Mae will draft such amounts 4 calendar days after such amount is scheduled to be paid by the BorrowerBorrowerPerson who is the obligor per the Note. under the applicable Transaction Document. If the fourth calendar day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , then such draft will be made on the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
At the written request of the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. or if the Reimbursement Agreement or the Financing Agreement requires the BorrowerBorrowerPerson who is the obligor per the Note. to make such payments through the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will invoice the BorrowerBorrowerPerson who is the obligor per the Note. for any fees and expenses payable by the BorrowerBorrowerPerson who is the obligor per the Note. to the (1) IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. , (2) Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , (3) Rating Agency, (4) Remarketing AgentRemarketing AgentPerson selected by the Issuer to reset the interest rate on the Bonds in order to resell any Bonds tendered by investors on the interest rate reset date. , (5) Rebate Analyst, (6) Compliance Monitor or (7) Custodian.
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. invoice must require the BorrowerBorrowerPerson who is the obligor per the Note. to pay all such amounts to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. not later than the earlier of ten days following the receipt of the invoice or the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. such amounts become due. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will remit all such payments received from the BorrowerBorrowerPerson who is the obligor per the Note. to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , the Rating Agency, or Custodian, as applicable, and, if to the Rating Agency or Custodian, with notice to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. of such payment.
When a BorrowerBorrowerPerson who is the obligor per the Note. prepays 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. in a DUS Bond Credit Enhancement in whole or in part, the bonds also will be prepaid or redeemed in whole or in part on a corresponding basis. This is the starting point for the analysis of the obligations of the BorrowerBorrowerPerson who is the obligor per the Note. to account for any fees payable on account of the prepayment or redemption.
All relevant rules regarding bond redemption premiums will be contained in the related Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. . The BorrowerBorrowerPerson who is the obligor per the Note. is obligated to pay any bond redemption premium. Fannie Mae does not provide credit enhancement for the bond redemption premium.
Not all types of bond redemptions are subject to redemption premiums and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must consult the related Bond Indenture documentation to determine whether a redemption premium is due. As a general rule, only bond redemptions initiated voluntarily or optionally by the BorrowerBorrowerPerson who is the obligor per the Note. will potentially have a redemption premium. Mandatory redemptions almost never have a redemption premium. Mandatory redemptions include redemptions paid from condemnation proceeds and insurance proceeds from casualty losses.
1. Variable Rate Bond Redemption
Weekly variable rate bonds may typically be redeemed at any time, or at least on any bond interest payment date, without restriction or redemption premium to the bondholders subject to the terms of the related Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. .
2. Fixed Rate Bond Redemption
Fixed rate bonds are typically restricted from optional or voluntary redemption by the BorrowerBorrowerPerson who is the obligor per the Note. for a specific period following the original bond issuance date, known as a lockout period. A lockout period may approximate 10 years from the initial bond issuance. Following the expiration of the lockout period, any voluntary redemption during the subsequent 3 to 5 year period typically requires the payment of a redemption premium to bondholders.
NOTE: Most transactions require the BorrowerBorrowerPerson who is the obligor per the Note. to pay the bond redemption premium with money that is not subject to being treated as a voidable preference under applicable bankruptcy and insolvency laws. This usually means the redemption premium cannot come from regular resources of the BorrowerBorrowerPerson who is the obligor per the Note. . The Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. must be consulted for requirements applicable to sources of payment of the Bond Redemption Premium and legal counsel should be consulted.
Any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. payable to Fannie Mae on the credit enhancement is separate and distinct from any redemption premium payable to bondholders. This is true for all executions: Direct PayDirect PayCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) regardless of whether the Borrower has reimbursed Fannie Mae for such payments. , StandbyStandbyCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) if the Borrower fails to make required mortgage note payments or if a bankruptcy event has occurred. and MBSMBSMortgage-Backed Security .
In most instances, Fannie Mae requires the BorrowerBorrowerPerson who is the obligor per the Note. to pay a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. (or “Termination Fee” if required in the applicable documents) if the prepayment occurs within a certain number of years after original delivery of Fannie Mae’s credit enhancement. In earlier Bond Credit Enhancement transactions, the premium will be called a Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. and will be addressed in the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. . In later transactions, the premium will be called a Termination Fee and will be addressed in the Reimbursement Agreement.
In DUS Variable Rate Credit Enhancements, there is the possibility that neither 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. nor the bonds are actually being prepaid, but only that the BorrowerBorrowerPerson who is the obligor per the Note. is replacing Fannie Mae as the provider of the credit enhancement and liquidity, terminating Fannie Mae’s involvement in the transaction. For purposes of this section, that too is treated as a prepayment. In the event that 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 being prepaid or Fannie Mae is being replaced as credit enhancer, the result is that the credit enhancement is being terminated. In recent years, to take this into account, the general term “Termination” has been used to refer to the events and “Termination Fee” to refer to the fee which may be payable on account of those events.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit any Termination Fee due Fannie Mae in accordance with remittance requirements contained below in this Section by 2:00 p.m. Eastern Time on the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following the day on which the Borrower’sBorrower’sPerson who is the obligor per the Note. termination of Fannie Mae’s credit enhancement and liquidity is effective.
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| 216.04A | |
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The NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. requires the BorrowerBorrowerPerson who is the obligor per the Note. to give advance notice of a full or partial prepayment to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , and, if a DUS Variable Rate Credit Enhancement, the Remarketing AgentRemarketing AgentPerson selected by the Issuer to reset the interest rate on the Bonds in order to resell any Bonds tendered by investors on the interest rate reset date. . Any partial prepayment must be in an amount corresponding to an authorized denomination of the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. . Typically, Fannie Mae will require its consent to an optional redemption of BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must always keep in mind that the date on which the BorrowerBorrowerPerson who is the obligor per the Note. must transfer money to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to initiate a prepayment may not be the day that the transfer of funds is treated as a prepayment under the governing documents. For example, under some documents the BorrowerBorrowerPerson who is the obligor per the Note. must make the prepayment not later than the last Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the day the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , under the Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. , must have received funds for redemption of the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. . 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. prepayment will not be recognized until the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. are actually redeemed or deemed paid and no longer under the requirements of the Bond IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Fannie Mae (Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. ) and the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. in writing upon receiving notice from the BorrowerBorrowerPerson who is the obligor per the Note. of a planned prepayment. If the prepayment does not occur on such date, the BorrowerBorrowerPerson who is the obligor per the Note. may not subsequently prepay 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. in full without first giving the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and all other parties to whom notice is required, a new notice of intent to prepay in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the final prepayment amount quoted to the BorrowerBorrowerPerson who is the obligor per the Note. prior to prepayment is correct. Accordingly, before the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. advises the BorrowerBorrowerPerson who is the obligor per the Note. of the final prepayment amount, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must verify such amount with the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. and Fannie Mae.
1. No less than 10 days prior to the scheduled prepayment date, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Bond Trustee'sBond Trustee'sTrustee for a Credit Enhancement Instrument. written confirmation of all amounts due and payable in connection with the prepayment.
2. No less than 10 days prior to the scheduled prepayment date, and after verifying amounts due on the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. with the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request verification of the full or partial prepayment amount from Fannie Mae.
3. No less than 5 days prior to the day the BorrowerBorrowerPerson who is the obligor per the Note. is required to initiate the prepayment, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advise the BorrowerBorrowerPerson who is the obligor per the Note. in writing of the full amount necessary to make the prepayment.
NOTE: The day the BorrowerBorrowerPerson who is the obligor per the Note. is required to initiate the prepayment will be before the day the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. are to be redeemed.
4. For weekly variable rate bonds, immediately following the last day on which interest is determined on the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. before the scheduled redemption date of the bonds, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must re-verify the amount the BorrowerBorrowerPerson who is the obligor per the Note. must pay for the prepayment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately advise the BorrowerBorrowerPerson who is the obligor per the Note. of any correction required by the re-verification.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should note that the transaction documents do not uniformly address the redemption premium, if any, payable to Bondholders and Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or termination fee, if any, payable to Fannie Mae on account of a prepayment of 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. . In some instances, the fee maintenance Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. set out in the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. will be payable to Fannie Mae. In other instances, the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. payable under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. must be remitted to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. for payment to bondholders as a redemption premium. In this case, the BorrowerBorrowerPerson who is the obligor per the Note. may be required to pay a Termination Fee to Fannie Mae pursuant to the Reimbursement Agreement. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be alert to these requirements.
To obtain Fannie Mae’s confirmation of the prepayment amount, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a statement detailing the following:
1. the Fannie Mae 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. number(s) and bond number(s), 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). name and address and the expected prepayment date;
2. all amounts that it has determined (and for such amounts due the Bondholders, confirmed with the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. ) will be due and payable by the BorrowerBorrowerPerson who is the obligor per the Note. on the prepayment date, including:
(a) the full or partial principal prepayment (as of the prepayment date) of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , separately specifying any amounts in the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. expected to be applied to principal;
(b) accrued interest up to but not including the date of prepayment of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. ;
(c) any unpaid late fees (if applicable);
(d) any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee required to be paid to the Bondholders or Fannie Mae, respectively, under the terms of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Financing Agreement, the IndentureIndentureBond issuer trust indenture or resolution listing Bond terms. or the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. ;
(e) any termination fee payable to Fannie Mae pursuant to the Reimbursement Agreement;
(f) any other amounts due under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
(g) all other amounts due upon a redemption of BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. under the Bond Documents, including any interest required to cover the gap between 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. and 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. prepayment for which an escrow or collateral is not already provided. (The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request this information from the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. .)
3. written confirmation from the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. of all amounts due the Bondholders.
4. all amounts that will be due and payable to Fannie Mae on the day as required by this Section following prepayment, including:
(a) Credit Enhancement FeeCredit Enhancement FeeFee due to Fannie Mae for a Credit Enhancement Instrument. and Liquidity Fee;
(b) any previously unpaid fees or other amounts owed to Fannie Mae; and
(c) any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee that is due, broken down into the portions due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae.
The Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee is a percentage (as specified in the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. or Reimbursement Agreement) multiplied by the UPBUPBUnpaid Principal Balance of 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. after crediting the scheduled payment due on the date regular mortgage loan payments are due (in some transactions, the first of the month and in others, the 15th of the month) in which a prepayment takes place.
Fannie Mae’s share of the Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee will be a percentage determined by dividing the sum of the Credit Facility Fee and the Liquidity Fee by the sum of the Credit Facility Fee, Liquidity Fee and the Servicing FeeServicing FeeFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. .
No Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee is due in connection with an application of insurance proceeds or condemnation awards, a monthly deposit to the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. , a redemption of BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. from amounts transferred from the PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. to a redemption account, a reduction and amortization of 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. as a result of a 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. redemption, or an adjustment to a Reset Rate or a Fixed Rate.
For New Construction/Substantial Rehabilitation Mortgage Loans, other prepayment criteria may apply depending on the transaction structure.
Fannie Mae is not responsible for confirming any amounts owed to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at the time of the prepayment (e.g., any administrative fees due for services performed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ); however, the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. payoff statement should clearly denote any such amounts so that Fannie Mae can distinguish them from amounts due exclusively to Fannie Mae and the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. .
Fannie Mae will review the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. figures and contact the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reconcile any discrepancies. Upon completion of its review and any necessary reconciliation, Fannie Mae will respond to the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. verification request in writing. In its response, Fannie Mae will confirm the total payoff amount due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. from the BorrowerBorrowerPerson who is the obligor per the Note. , and will also separately confirm the amounts due to Fannie Mae from the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as well as individual items comprising such total amounts.
It is the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. responsibility to prepare lien release documentation.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the prepayment amount, including any applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. or Termination Fee due Fannie Mae and/or any redemption premium due the bondholders, to Fannie Mae in accordance with the reporting requirements contained in Part V, Chapter 2: Reporting and Remitting, Section 216.01: Monthly Bond Credit Enhancement Reporting. The date the report is due depends on the execution type of the underlying transaction.
1. 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. payments are due on the first of the month, the report is due on the fourth calendar day of the month in which the prepayment occurs, or the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if the fourth is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
2. 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. payments are due on the 15th of the month, the report is due on the 15th of the month or the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if such day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
| 216.06 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit any Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. and/or Termination Fee due Fannie Mae by 2:00 p.m. Eastern Time, on the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following the day on which the Borrower’sBorrower’sPerson who is the obligor per the Note. prepayment is received.
Depending on the execution and transaction type, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also be concerned with invoicing, collecting and remitting the principal amount of 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. to be prepaid. In all cases, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must invoice and collect the principal amount being prepaid from the BorrowerBorrowerPerson who is the obligor per the Note. . No prepayment of Direct PayDirect PayCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) regardless of whether the Borrower has reimbursed Fannie Mae for such payments. Facilities will be allowed until Fannie Mae receives the necessary funds from the BorrowerBorrowerPerson who is the obligor per the Note. .
Any prepayment of principal on 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. received by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. shall be paid, as follows:
1. Standby Execution: Prepayments shall be remitted to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. not later than the 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. Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. immediately after the date of receipt such funds by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; or
2. Direct PayDirect PayCredit enhancement under which Fannie Mae makes principal and interest payments directly to the Bond Trustee (for payment to bondholders) regardless of whether the Borrower has reimbursed Fannie Mae for such payments. Execution: Prepayments shall be remitted to Fannie Mae on the same day as the Fannie Mae Advance to the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. funding the corresponding bond redemption associated with the prepayment.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must electronically submit to Fannie Mae using the Multifamily Delinquency Early Warning System (DEWSDEWSMultifamily Delinquency Early Warning System used for reporting the monthly status of Non-Performing Mortgage Loans. ), or any successor system selected by Fannie Mae to do such reporting, the monthly delinquency status of 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. on the 17th calendar day of the month. If the 15th falls on a holiday or weekend, the System is available the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must plan around this one day window period for the purpose of reporting delinquencies. This rule applies to all execution and transaction types for DUS Bond Credit Enhancement.
| Section 217 | |
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NOTE: Except as otherwise required below, the reporting and remitting requirements for Cash Mortgage Loans provided in this Chapter apply to Mezzanine Loans.
For the DUS Plus Mezzanine Loan, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is required to remit to Fannie Mae via the Cash Remittance SystemCash Remittance SystemMultifamily system where you set up and maintain banking instructions for Fannie Mae’s drafting of remittances per Part V, Chapter 2: Reporting and Remitting, Section 209: Remittance Procedures. . On each remittance date the amount representing P&IP&IPrincipal and interest (adjusted to the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ) actually collected from the Mezzanine Borrower must be remitted. The initial remittance date for any DUS Plus Mezzanine Loan is the 18th day of the month following the month in which the DUS Plus Mezzanine Loan is purchased, with monthly remittances due on the 18th day of each month thereafter.
For each DUS Plus Mezzanine Loan, the principal distribution amount remitted must include the sum of:
- the principal portion actually collected from the Mezzanine Borrower of the monthly installment due during the period beginning on the second day of the month preceding the month in which a remittance date occurs and ending on the first day of the month in which a remittance date occurs; and
- any unscheduled principal recovery collected on a DUS Plus Mezzanine Loan during the month preceding the month in which a remittance date occurs.
The interest distribution amount remitted includes the interest portion of the monthly installment (that portion actually collected from the Mezzanine Borrower), adjusted to the Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. , due on the first day of the month in which a remittance date occurs or due at any time (other than the first day) during the preceding month.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit funds collected from the Mezzanine Borrower even if they do not represent a full payment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not deduct monthly Servicing FeesServicing FeesFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. until the entire monthly payment has been collected from the Mezzanine Borrower.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not required to remit to Fannie Mae on the remittance date any amounts representing P&IP&IPrincipal and interest that have not been received from the Mezzanine Borrower and are, therefore, delinquent. Any delinquent payment received after the 18th calendar day of the month in which it is due must be remitted to Fannie Mae by 1:00 p.m. ET within 24 hours of its receipt.
| 217.02 | |
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For DUS Plus Mezzanine Loans, proceeds for payments-in-full, including any applicable repayment fees, must be remitted directly to the mezzanine investor within 24 hours after receipt by the DUSDUSDelegated Underwriting and Servicing ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The full payment must be reported to Fannie Mae by the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of the month following the month in which the prepayment is received in accordance with Part V of this GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
| Section 218 | |
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A BorrowerBorrowerPerson who is the obligor per the Note. may elect to defease its 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. only if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit defeasance. If the Borrower’sBorrower’sPerson who is the obligor per the Note. Mortgage Loan DocumentsMortgage Loan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not permit defeasance, defeasance of 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 not permitted.
Prior to 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. and during the Mortgage Loan's Defeasance Period, the BorrowerBorrowerPerson who is the obligor per the Note. may defease the entire outstanding balance of 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. in accordance with the applicable terms and conditions of the Borrower'sBorrower'sPerson who is the obligor per the Note. Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and the provisions of this Section.
| 218.03 | |
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To accomplish the defeasance, the following procedures must be followed:
| 218.03A | |
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ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the most current DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. documents from the Fannie Mae website. The DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. documents consist of the Defeasance Notice (Form 4622) and other closing documents required by Fannie Mae in order for the defeasance to occur.
| 218.03B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must complete the Defeasance Notice (Form 4622) after verifying 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 eligible for defeasance and obtaining from the BorrowerBorrowerPerson who is the obligor per the Note. the date on which the BorrowerBorrowerPerson who is the obligor per the Note. desires to consummate the DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. . The Defeasance Close Date may not be more than 45 calendar days nor less than 30 calendar days after the date on which the Defeasance Notice is received by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the Defeasance Calculator application on the Fannie Mae web site to estimate the Defeasance Deposit and the estimated Defeasance Deposit must be inserted in the appropriate box in the Defeasance Notice. The information on the Defeasance Notice will not be final until it is confirmed by Fannie Mae. Until then, the Defeasance Deposit and other information are estimates. The Defeasance Notice will specify (a) whether a Fannie Mae debt instrument will be offered for use as the substitute collateral and, if not, that U.S. Treasury SecuritiesSecuritiesMBS, PFP MBS, or REMIC. will be the substitute collateral; and (b) whether the successor entity will be designated by Fannie Mae or BorrowerBorrowerPerson who is the obligor per the Note. , and (c) the amount of the Defeasance Commitment Fee.
To be effective, the BorrowerBorrowerPerson who is the obligor per the Note. must execute and send the Defeasance Notice to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. so that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the Defeasance Notice no earlier than 11:00 a.m. and no later than 3:00 p.m. ET on a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then sign and execute the Defeasance Notice and fax the Defeasance Notice and a copy of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. to be defeased to its Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). .
Fannie Mae must receive the fax by 5:00 p.m. ET on the same day that the DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. Deposit was calculated for verification by Fannie Mae.
| 218.03C | |
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A Defeasance Commitment Fee equal to 1% of the scheduled balance of 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. as of the Defeasance Close Date, must be paid by the BorrowerBorrowerPerson who is the obligor per the Note. to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. no later than the date and time when the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the executed Defeasance Notice from the BorrowerBorrowerPerson who is the obligor per the Note. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must wire the Defeasance Commitment Fee to Fannie Mae within 24 hours after receipt of the Borrower'sBorrower'sPerson who is the obligor per the Note. executed Defeasance Notice.
Fannie Mae will verify 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. information contained in the Defeasance Notice as well as 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. eligibility for defeasance. After verification and within two (2) Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after the initial receipt of the Defeasance Notice from the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , Fannie Mae will sign the Defeasance Notice and fax it back to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. along with an Exhibit that details the monthly cash flows of the Fannie Mae debt instrument that will replace 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). as collateral for 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will then fax the verified Defeasance Notice to the BorrowerBorrowerPerson who is the obligor per the Note. on the same day that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives the verified Defeasance Notice from Fannie Mae. In the event that Fannie Mae made changes to the Defeasance Notice, the BorrowerBorrowerPerson who is the obligor per the Note. must initial the changed portions of the Defeasance Notice and fax it back to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. on that same day. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then immediately fax the BorrowerBorrowerPerson who is the obligor per the Note. -initialed Defeasance Notice to Fannie Mae.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. does not
- receive the Defeasance Commitment Fee, and
- provide confirmation of the Defeasance Notice to the BorrowerBorrowerPerson who is the obligor per the Note. ,
| 218.03E | |
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On or before the Defeasance Close Date, the BorrowerBorrowerPerson who is the obligor per the Note. must deliver to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a Defeasance Pledge Agreement (Form 4529), creating a perfected security interest in the substitute collateral in favor of Fannie Mae.
| 218.03F | |
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The BorrowerBorrowerPerson who is the obligor per the Note. must assign all its obligations and rights under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , together with the substitute collateral, to a successor entity designated by Fannie Mae or, if not so designated by Fannie Mae, designated by BorrowerBorrowerPerson who is the obligor per the Note. and acceptable to Fannie Mae. The BorrowerBorrowerPerson who is the obligor per the Note. and the successor entity shall execute and deliver to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a Defeasance Assignment and Assumption Agreement (Form 4528).
| 218.03G | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deliver to Fannie Mae by no later than 10 a.m. ET, five (5) Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the Defeasance Close Date, the following documents:
- a Borrower's Counsel Opinion Letter (Form 6618) affirming:
- that each DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. Document constitutes the valid and legally binding obligation of the BorrowerBorrowerPerson who is the obligor per the Note. , enforceable against the BorrowerBorrowerPerson who is the obligor per the Note. in accordance with its terms;
- that the defeasance is not subject to avoidance under any applicable federal or state laws;
- that, if the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. is held by a REMIC Trust, then the defeasance has been effected in such a way that does not adversely affect the REMIC Trust; and
- such other opinions, certificates, documents or instruments as ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may reasonably request;
- the Defeasance Assignment and Assumption Agreement (Form 4528); and
- the Defeasance Pledge Agreement (Form 4529).
Transmittal of these documents shall be accompanied by a completed Multifamily Defeasance Transmittal Form (Form 4631).
| 218.03H | |
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On or before the Defeasance Close Date, the BorrowerBorrowerPerson who is the obligor per the Note. must pay to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. an amount equal to the sum of:
- the next scheduled P&IP&IPrincipal and interest payment due under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. ;
- all other sums then due and payable under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. and any other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- all costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with the defeasance, including any out-of-pocket fees and disbursements of the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel.
| 218.03I | |
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If a Fannie Mae investment security will be the substitute collateral, then, on or before 3:00 p.m. ET on the Defeasance Close Date, the BorrowerBorrowerPerson who is the obligor per the Note. must pay the Defeasance Deposit (reduced by the Defeasance Commitment Fee) to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be used by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , as the Borrower'sBorrower'sPerson who is the obligor per the Note. agent, to purchase the Fannie Mae Investment Security.
The BorrowerBorrowerPerson who is the obligor per the Note. or Closing Agent must wire the Defeasance Deposit to ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. by 3:00 p.m. ET on the Defeasance Closing Date. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must wire the Defeasance Deposit (reduced by the Defeasance Commitment Fee) to Fannie Mae for receipt by 5:00 p.m. ET on the Defeasance Closing Date.
| 218.03J | |
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Upon the Borrower'sBorrower'sPerson who is the obligor per the Note. compliance with the DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. requirements, 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). will be released from the lien of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. . Upon release 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). , the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. will be secured by the pledge of the Substitute Collateral.
If the BorrowerBorrowerPerson who is the obligor per the Note. timely pays the Defeasance Commitment Fee and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and the BorrowerBorrowerPerson who is the obligor per the Note. timely transmit a signed facsimile copy of the Defeasance Notice, but the BorrowerBorrowerPerson who is the obligor per the Note. fails to consummate the defeasance, Fannie Mae shall have the right to retain the Defeasance Commitment Fee as liquidated damages for the Borrower'sBorrower'sPerson who is the obligor per the Note. default and, subject to the terms and conditions of the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. , the BorrowerBorrowerPerson who is the obligor per the Note. shall be released from all further obligation to defease the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. under the given Defeasance Notice.
| 218.03L | |
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In the event that the DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. is not consummated on the Defeasance Closing Date for any reason, the BorrowerBorrowerPerson who is the obligor per the Note. must reimburse the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. for all third-party costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in its reliance on the Defeasance Notice executed by the BorrowerBorrowerPerson who is the obligor per the Note. , within five (5) Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after the BorrowerBorrowerPerson who is the obligor per the Note. receives a written demand for this reimbursement.
| 218.03M | |
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Fannie Mae will transfer the defeased 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. from the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. servicing portfolio effective on the first day of the second month following the Defeasance Closing Date. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be required to report and remit payments for the next scheduled P&IP&IPrincipal and interest payment collected as part of the Defeasance Closing. Thereafter, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will no longer be required to perform other servicing requirements for the defeased 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. . Beginning on the 18th calendar day of the second calendar month after the Defeasance Closing Date (or the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. if such day is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ) until the maturity of 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will receive the remaining scheduled servicing fee for 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. minus five (5) basis points provided the Authorization for ACH Remittance (Form 4630) has been submitted.
| Section 219 | |
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On the 17th calendar day of each month, ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must take the following actions with respect to 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. :
- Report all delinquent 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. to Fannie Mae using the Delinquency Early Warning System (“DEWSDEWSMultifamily Delinquency Early Warning System used for reporting the monthly status of Non-Performing Mortgage Loans. ”), which ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may access through the eServicing System. Delinquency reporting must include delinquencies 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. on Bond Credit Enhancements, even if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. also elects to report these delinquencies through CESIRCESIRCredit Enhancement Servicing and Investor Reporting System .
- Certify as to the delinquency status of all 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. . If a Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. portfolio does not include any delinquent 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must certify to that effect.
Prior to the 17th calendar day of each month, ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use the “Preliminary” Case Status indicator to set up initial delinquency cases in DEWSDEWSMultifamily Delinquency Early Warning System used for reporting the monthly status of Non-Performing Mortgage Loans. .
On the 17th calendar day of each month, ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must change all "Preliminary" Case Status indicators to "Open" for all 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. still delinquent or delete remaining initial cases for all 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. that have cured. No “Preliminary” Case Status cases can remain as of the 17th calendar day of each month.
If the 17th calendar day of a month falls on a weekend or holiday, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report and certify on the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must complete the “comments section” in each report with important additional information regarding the delinquent 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. including, at a minimum, the following:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. attempts to contact the delinquent BorrowerBorrowerPerson who is the obligor per the Note. ;
- the cause for the missed payment(s);
- whether payment is expected before the end of the month;
- the likelihood of the BorrowerBorrowerPerson who is the obligor per the Note. making the next month’s payment;
- if the payment will not be made before the end of the month of default, whether the BorrowerBorrowerPerson who is the obligor per the Note. will voluntarily turn over the monthly net operating income 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). ;
- the willingness of the BorrowerBorrowerPerson who is the obligor per the Note. to work with the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to resolve the delinquency; and
- whether 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 being Special Serviced by Fannie Mae's Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. (SAM) group (Primary Risk Mortgage LoansPrimary Risk Mortgage LoansMortgage Loan where Fannie Mae bears all losses or you and Fannie Mae share losses. ) or the Servicers' Special Servicing group (Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where you bear all losses until your recourse obligation is exhausted. ).
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must update at least once per week all delinquency reports with an “Open” status indicator.
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report, on a quarterly basis, the balances of 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. collateral held by ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in their Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. using Collateral Submission Report (Form 4813). CollateralCollateralProperty, Personal Property, or other property securing a Mortgage Loan. balances that must be included in the quarterly reporting include balances for all Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. whether the collateral is held as cash, securities or letters of credit.
| 220.01 | |
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Except as noted in Part V, Chapter 2: Reporting and Remitting, Section 220.04: What to Report, balances in P&I Custodial AccountsP&I Custodial AccountsCustodial Account for principal and interest deposits. are excluded from this reporting requirement.
Balances for any original Letters of CreditLetters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be reported. Balances for any original Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. held by Fannie Mae are not required to be reported.
| 220.03 | |
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If the form of collateral is securities or Letters of CreditLetters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report the balances on a fair value basis (the price that would be received to sell an asset in a transaction between market participants).
| 220.04 | |
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CollateralCollateralProperty, Personal Property, or other property securing a Mortgage Loan. that must be reported using the Collateral Submission Report (Form 4813) includes:
- Short Term
- any Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or repair escrows;
- insurance proceeds held pending repair or damage to 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). ; or
- condemnation proceeds received in a condemnation action related to 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). .
- Long Term
- any operating deficit or debt service reserve; or
- NCFNCFOn 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… sweeps – to the extent NCFNCFOn 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… exceeds monthly P&IP&IPrincipal and interest remitted to Fannie Mae in the ordinary course.
- Balances in any T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. .
- Other
- any other escrow, collateral or achievement funds governed by an agreement with the BorrowerBorrowerPerson who is the obligor per the Note. ;
- any holdback of 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. proceeds; or
- any tenant security deposits held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
| 220.05 | |
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The Collateral Submission Report (Form 4813) must be submitted to Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Fannie Mae RepresentativeFannie Mae RepresentativeFannie Mae personnel who assist you with various business matters (e.g., Fannie Mae Deal Team, pricing, delivery, servicing, asset management, etc.). within thirty (30) days after the end of each calendar quarter.
| Section 221 | |
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| 221.01 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with Internal Revenue Service reporting requirements for:
- reporting the receipt of $600 or more of interest payments from any BorrowerBorrowerPerson who is the obligor per the Note. who is a natural person (IRS Form 1098);
- filing Statements for Recipients of Miscellaneous Income (IRS Form 1099-MISC) to report payments of fees and related expenses to attorneys and other third parties in connection with foreclosure or liquidation proceedings in connection with 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. and the related PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
- filing notices of Acquisition or Abandonment of Secured Property (IRS Form 1099-A) to report the acquisition of a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). by foreclosure or acceptance of a deed-in-lieu or by a Borrower’sBorrower’sPerson who is the obligor per the Note. abandonment of a property; and
- filing notices of Cancellation of Debt (IRS Form 1099-C) to report the cancellation of any part of a Borrower’sBorrower’sPerson who is the obligor per the Note. indebtedness.
Should the Internal Revenue Service change the reporting requirements in connection with any of IRS Form 1098, IRS Form 1099-MISC, IRS Form 1099-A or IRS Form 1099-C, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with those changed reporting requirements, notwithstanding anything to the contrary contained in this Chapter. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should contact Fannie Mae if it believes any portion of this Chapter to be in conflict with such Internal Revenue Service reporting requirements.
| 221.02 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report all attorney (or trustee) fees paid by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. -retained attorneys or trustees or to Fannie Mae-retained attorneys or trustees for handling foreclosure proceedings, by filing Form 1099-MISC (Miscellaneous Income) with the Internal Revenue Service and other parties. This form must be filed in the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. name, using its Internal Revenue Service tax identification number.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. pays for any expenses authorized by Fannie Mae for the maintenance, repair, or marketing of an REOREOA Property or interest in a Property acquired by Fannie Mae or on behalf of the MBS Trust, through a Foreclosure Event where title to a Property or interests in that Property are transferred to Fannie Mae or the MBS Trust. PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , or when the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. pays directly any business that is not a corporation for recurring maintenance costs, minor repair costs, or routine costs in connection with an REOREOA Property or interest in a Property acquired by Fannie Mae or on behalf of the MBS Trust, through a Foreclosure Event where title to a Property or interests in that Property are transferred to Fannie Mae or the MBS Trust. PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report such payments to the Internal Revenue Service. To accomplish this, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must prepare an IRS Form 1099-MISC (Miscellaneous Income) for the appropriate tax year and submit it to the Internal Revenue Service and to the individual payee. This form must be filed in the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. name, using its Internal Revenue Service taxpayer identification number.
| 221.03A | |
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The Internal Revenue Service requires that information returns be filed when Fannie Mae (or a third party) acquires an interest in a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). in full or partial satisfaction of 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. or when Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has reason to know that a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). has been abandoned. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must file these notices on Fannie Mae's behalf, using IRS Form 1099-A (Acquisition or Abandonment of Secured Property), for all applicable 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. (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. participations if Fannie Mae's percentage ownership of such 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 50% or greater).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must satisfy the reporting requirements for the “owner of record” (instead of on Fannie Mae's behalf) when the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. purchased a delinquent 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. from Fannie Mae before 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). was acquired by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in full or partial satisfaction of 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. .
For purposes of filing these reports:
- Fannie Mae (or the “owner of record”) acquires an interest in 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). when any redemption period that follows a foreclosure sale ends without redemption rights being exercised (or when Fannie Mae accepts a deed-in-lieu of foreclosure);
- A third party acquires an interest in 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). at the foreclosure sale; and
- Abandonment occurs when Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has “reason to know” from “all facts and circumstances concerning the status 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). ” that the BorrowerBorrowerPerson who is the obligor per the Note. intended to discard or has permanently discarded 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). from use. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , however, will have an additional three months before its reporting obligation arises if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. expects foreclosure proceedings to begin within the three months after determination that abandonment has occurred.
After an event that triggers a reporting requirement occurs, IRS Form 1099-A must be filed on or before February 28 (or March 31 if filing electronically) of the year following the calendar year in which the event occurred. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. also must furnish the BorrowerBorrowerPerson who is the obligor per the Note. with an information statement on or before January 31 of that year. The requirement for notifying the BorrowerBorrowerPerson who is the obligor per the Note. can be satisfied by sending Copy B of a completed IRS Form 1099-A to the Borrower'sBorrower'sPerson who is the obligor per the Note. last known address. When the form is filed on Fannie Mae's behalf, it must show Fannie Mae's name, address, and federal identification number (52-0883107), and include a legend stating that the information is being reported to the Internal Revenue Service. If it is filed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. on its own behalf or for the “owner of record,” the name, address, and identification number of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or owner of record, respectively, must be provided instead.
| 221.03B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for completing the IRS Form 1099-A accurately, for filing it with the Internal Revenue Service, and for providing the information to the BorrowerBorrowerPerson who is the obligor per the Note. and to Fannie Mae by the required dates. If the Internal Revenue Service penalizes Fannie Mae because a ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. failed to file a return or filed an incorrect return or late return, Fannie Mae will require the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reimburse Fannie Mae for any penalty fees the Internal Revenue Service assesses (unless the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. can document that it met the filing requirements).
Information that must be reported on IRS Form 1099-A includes:
- the Borrower'sBorrower'sPerson who is the obligor per the Note. taxpayer identification number (the Social Security number if the borrower is a natural person);
- the date of acquisition of an interest in 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). or the date the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. acquired knowledge of the abandonment;
- the outstanding UPBUPBUnpaid Principal Balance of 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. ;
- a general 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
- whether the BorrowerBorrowerPerson who is the obligor per the Note. is personally liable for the debt and, if personally liable, the fair market value 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). at the time of acquisition.
| 221.04A | |
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The Internal Revenue Service requires certain mortgage holders, including Fannie Mae, to file information returns when $600 or more of 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. is cancelled. Except as provided in Part V, Chapter 2: Reporting and Remitting, Section 221.04D: Exceptions to IRS Form 1099-C Reporting, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must file these returns on Fannie Mae's behalf, using IRS Form 1099-C, for all applicable 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. (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. participations if Fannie Mae's percentage ownership of such 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 50% or greater). If, in the same calendar year, 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. is canceled in connection with a foreclosure or abandonment of secured property, it is not necessary to file both Form 1099-A and Form 1099-C for the same BorrowerBorrowerPerson who is the obligor per the Note. . Only Form 1099-C need be filed, and the Form 1099-A filing requirement for the BorrowerBorrowerPerson who is the obligor per the Note. will be met by completing boxes 4, 5, and 7 on Form 1099-C.
A debt is cancelled (in whole or part) when any of the following occur:
- discharge in bankruptcy under Title 11 of the U.S. Code;
- receivership, foreclosure, or similar federal or state court proceeding makes the debt unenforceable;
- the statute of limitations applicable to collecting the debt expires (if so determined by a court and any appeal period has expired), or expiration of the statutory period for filing a claim or beginning a deficiency judgment proceeding;
- foreclosure remedies by law end or bar Fannie Mae’s right to collect the debt (e.g., foreclosure by exercise of the “power of sale” in the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. );
- probate or similar proceeding cancels or extinguishes the debt;
- Fannie Mae and the BorrowerBorrowerPerson who is the obligor per the Note. agree to cancel the debt at less than full consideration;
- a decision or defined policy of Fannie Mae causes collection activity to be discontinued and the debt to be cancelled; or
- expiration of a “non-payment testing period”.
The Internal Revenue Service presumes that a debt is cancelled during a calendar year if no payment has been received 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. during a period (the “non-payment testing period”) of 36 months, plus the number of calendar months when collection activity was precluded by a stay in bankruptcy or similar bar under state or local law. The presumption may be rebutted, however, if there has been significant, bona fide collection activity at any time during the calendar year, or if facts and circumstances, existing as of January 31 of the calendar year following expiration of the 36-month period, indicate that the indebtedness has not been discharged.
| 221.04C | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for completing the Cancellation of Debt (IRS Form 1099-C) accurately, and for filing it with the Internal Revenue Service and providing the information to the BorrowerBorrowerPerson who is the obligor per the Note. and to Fannie Mae by the required dates. The form must be filed on or before February 28 (or March 31 if filing electronically) of the year following the calendar year in which the discharge of indebtedness occurs.
If the Internal Revenue Service penalizes Fannie Mae because the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. failed to file a return or filed an incorrect or late return, Fannie Mae will require the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to reimburse Fannie Mae for any penalty fees the Internal Revenue Service assesses (unless the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. can document that it met the filing requirements).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. also must furnish the BorrowerBorrowerPerson who is the obligor per the Note. with an information statement before January 31 of that year. The requirement for notifying the BorrowerBorrowerPerson who is the obligor per the Note. can be satisfied by sending Copy B of a completed IRS Form 1099-C (or a substitute statement that complies with Internal Revenue Service requirements for substitute forms) to the Borrower'sBorrower'sPerson who is the obligor per the Note. last known address, and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send Copy C to those states that require it. When the form is filed on Fannie Mae's behalf, it must show Fannie Mae's name as the “Creditor,” Fannie Mae's address and federal identification number (52-0883107), and include a legend identifying the statement as important tax information that is being furnished to the Internal Revenue Service.
Information that must be reported on IRS Form 1099-C includes:
- the Borrower'sBorrower'sPerson who is the obligor per the Note. name, address, and taxpayer identification number (the Social Security number if the borrower is a natural person);
- the date the debt was cancelled;
- the amount of the cancelled debt, which does not include interest or any amount received in satisfaction of the debt from a foreclosure sale or other means;
- a description of the debt, such as “mortgage loan,” and a 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). if a combined IRS Form 1099-C and 1099-A is filed;
- whether the BorrowerBorrowerPerson who is the obligor per the Note. is personally liable for the debt;
- whether the debt was cancelled in bankruptcy; and
- the fair market value 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). if a combined IRS Form 1099-C and 1099-A is filed.
If the cancelled 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. had an original principal amount of $10,000 or more, was originated after 1994, and involves BorrowersBorrowersPerson who is the obligor per the Note. who are jointly and severally liable for the debt, a separate information return for each BorrowerBorrowerPerson who is the obligor per the Note. must be filed, and each return must report the entire amount of the cancelled debt. 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. was originated prior to January 1, 1995, or if the original principal amount of the cancelled 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 less than $10,000, and if there are multiple BorrowersBorrowersPerson who is the obligor per the Note. , reporting is required only with respect to the primary (or first-named) BorrowerBorrowerPerson who is the obligor per the Note. . In addition, only one information return is required, regardless of the origination date or the original principal amount, if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. knows, or has reason to know, that co-Borrowers were husband and wife living at the same address 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, and does not know or have reason to know that such circumstances have changed 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. is cancelled.
Interest. Interest need not be reported. If it is reported as part of the cancelled debt, the IRS Form 1099-C instructions require that it be shown in a separate box on the form.
Non-principal amounts. Cancellation of amounts other than stated principal, including penalties, fines, fees, and administrative costs charged to the BorrowerBorrowerPerson who is the obligor per the Note. , need not be reported.
Release of a co-Borrower. IRS Form 1099-C need not be filed when one BorrowerBorrowerPerson who is the obligor per the Note. is released from 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. as long as the remaining BorrowersBorrowersPerson who is the obligor per the Note. are liable for the full UPBUPBUnpaid Principal Balance of 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. .
Guarantor or surety. A guarantor or surety (i.e., any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. or 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. executing a Non-Recourse GuarantyNon-Recourse GuarantyGuaranty executed by a Key Principal on Form 4501 series or Form 6015 series, or approved by Fannie Mae. or a Payment GuarantyPayment GuarantyGuaranty executed by a Key Principal on Form 4502 series or Form 6020 series, or approved by Fannie Mae. ) is not a BorrowerBorrowerPerson who is the obligor per the Note. for purposes of the debt cancellation reporting requirements, so IRS Form 1099-C is never required.
If, in the same calendar year, 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 cancelled in connection with the acquisition or abandonment of the same PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). securing 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. , filing a timely and accurate IRS Form 1099-C will satisfy the requirement to file an IRS Form 1099-A.
| 221.05 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must report IRS Forms 1099-C and 1099-A information on magnetic media and must do so on Fannie Mae's behalf. Even though the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reports to the Internal Revenue Service on magnetic media, it is still responsible for providing a hard copy of the IRS Forms 1099-C or 1099-A, as applicable, to the BorrowerBorrowerPerson who is the obligor per the Note. (Copy B) and to those states that require it (Copy C). Copy B must be sent to the BorrowerBorrowerPerson who is the obligor per the Note. no later than January 31.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review each Borrower’sBorrower’sPerson who is the obligor per the Note. Form W-9 for validity and request a new Form W-9 if any form is invalid. A valid W-9 will include the Borrower’sBorrower’sPerson who is the obligor per the Note. name, tax identification number, date, and signature. In preparing Forms 1099-C or 1099-A, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must (i) utilize the IRS TIN Matching program and perform tax identification number matching for all United States non-exempt BorrowersBorrowersPerson who is the obligor per the Note. in all circumstances, (ii) notify Fannie Mae of any BorrowerBorrowerPerson who is the obligor per the Note. that is identified as an unsuccessful TIN Match prior to preparing Form 1099, and (iii) follow up with any BorrowerBorrowerPerson who is the obligor per the Note. whose name and tax identification number combination fail the IRS TIN Match. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should also provide to Fannie Mae its TCC (Transmittal Control Code) at the beginning of each year, which will allow Fannie Mae to communicate to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. any errors on its 1099 filings.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. does not need to send Fannie Mae a copy of the magnetic media filed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with the Internal Revenue Service. However, to ensure that Fannie Mae can identify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and the loan number for a specific 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. should the Internal Revenue Service contact Fannie Mae for additional information or clarification, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- insert the following header information when the IRS Form 1099-C or 1099-A, as applicable, is filed on Fannie Mae's behalf:
- Fannie Mae on the first “Payer” line; and
- the Fannie Mae loan number for the related 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. on the line for the “Payer's account number for Payee”; and
- within thirty (30) days after filing with the Internal Revenue Service, send an email to Fannie Mae at [email protected], containing a summary of IRS Forms 1099-C or 1099-A, as applicable, to notify Fannie Mae what the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. reported to the Internal Revenue Service on magnetic media.
| Chapter 3 | |
| Section 301 | |
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| 301.01 | |
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Requirements
For all funds collected per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , you must:
- establish and maintain the following per this Chapter:
- P&I Custodial AccountsP&I Custodial AccountsCustodial Account for principal and interest deposits. ;
- T&I Custodial AccountsT&I Custodial AccountsCustodial Account for the deposit of T&I and other impound escrow funds. ; and
- Collateral Agreement Custodial AccountsCollateral Agreement Custodial AccountsCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. ; and
- maintain strict control of all funds in your custody.
Operating Procedures
You must maintain all accounts and related records:
- for all
- Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. ,
- Drafting AccountsDrafting AccountsCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. , and
- Clearing AccountsClearing AccountsLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer…;
- using sound accounting and cash management practices; and
- enabling Fannie Mae to audit them at any time.
| 301.02 | |
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Requirements
Fannie Mae has a security interest in all 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. Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. and may require you to:
- transfer funds from an institution (even if it is an Eligible Depository) into another Eligible Depository;
- move funds to a trust account;
- ensure funds are fully insured with the FDICFDICFederal Deposit Insurance Corporation , NCUSIFNCUSIFNational Credit Union Share Insurance Fund administered by the National Credit Union Administration. , or other acceptable governmental insurer or guarantor;
- remit more frequently while allowing funds to remain in the existing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. ; and
- take other actions based on risks, account size, and other factors.
| 301.03A | |
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Requirements
You must ensure all Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. are demand deposit or money market accounts maintained at an Eligible Depository. An Eligible Depository is:
- a Federal Reserve Bank;
- a Federal Home Loan Bank; or
- depository institution if it complies with the following.
| Depository Institution... | Must... |
|---|---|
| Accounts |
Be insured by the
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| Rating |
Have an applicable Federal or State rating of
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| Minimum Financial Ratings for Assets $20 Billion or More |
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| Minimum Financial Ratings for Assets Less than $20 Billion |
Meet at least 1 of the following:
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Operating Procedures
You may establish the account within your own institution if you
- are an Eligible Depository, and
- do not use your general ledger or internal operating account for Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. .
| 301.03B | |
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Requirements
You must monitor the financial viability of custodial fund depositories.
If a depository or its holding company does not meet the Eligible Depository ratings per Part V, Chapter 3: Custodial Accounts, Section 301.03A: Eligible Depository, you must transfer the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. to an Eligible Depository within 30 days.
Operating Procedures
To determine an Eligible Depository:
- use the most recent financial ratings issued within the past 3 months; and
- confirm the ratings every 3 months.
| 301.04 | |
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Requirements
You must:
- comply with the interest-bearing requirements per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. when establishing accounts;
- not invest Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. funds, other than typical demand deposit or money market account earnings (e.g., interest); and
- when required by law or the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , pay the BorrowerBorrowerPerson who is the obligor per the Note. Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. earnings.
Operating Procedures
You may establish interest-bearing Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. if:
- they comply with all applicable local, state, and federal laws and regulations regarding BorrowerBorrowerPerson who is the obligor per the Note. funds;
- funds can be withdrawn on demand without prior notice; and
- either
- there is no early withdrawal penalty, or
- the number of withdrawals is limited, but you are responsible for any excess withdrawal penalties.
Guidance
You may retain any Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. earnings you are not required to pay the BorrowerBorrowerPerson who is the obligor per the Note. .
| 301.05 | |
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Requirements
You must:
- not use any Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. as a Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer…; and
- establish a Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… per Part V, Chapter 3: Custodial Accounts, Section 306: Clearing Accounts if deposits and disbursements cannot be made directly to or from the Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. .
| 301.06 | |
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| 301.06A | |
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Requirements
You are responsible for any:
- Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. losses; and
- damages Fannie Mae suffers due to funding delays, even if you complied with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
If you incur losses, Fannie Mae will not:
- reimburse them; or
- include them in 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. loss sharing calculation.
| 301.06B | |
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Requirements
You must ensure a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. is never overdrawn.
Operating Procedures
If an overdraft occurs, you must advance your own funds within 1 Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. to cure the overdraft.
| Section 302 | |
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| 302.01 | |
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Operating Procedures
Within 30 days of opening or closing a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , or changing the Eligible Depository or Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. information:
Step 1: You and the depository institution must execute the applicable:
- Letter of Authorization for Multifamily P&I Custodial Account (Form 2050);
- Letter of Authorization for Multifamily T&I Custodial Account (Form 2052); or
- Letter of Authorization for Multifamily Collateral Agreement Custodial Account (Form 2051).
Step 2: You must submit the executed document per the form’s instructions.
| 302.02 | |
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Operating Procedures
You must:
- Ensure all Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. are titled:
[You], as agent, trustee, and/or bailee for Fannie Mae and/or payments of various mortgagors and/or various owners of interests in mortgage-backed securities (Custodial Account).
- Submit:
- a copy of a
- signature card,
- bank statement, or
- system generated screen print; and
- the applicable Letter of Authorization per Part V, Chapter 3: Custodial Accounts, Section 302.01: Notifications.
- a copy of a
| 302.03 | |
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Requirements
You must deposit any funds no later than the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. (including any time funds are in a Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… or general ledger account) after receiving them.
Operating Procedures
For deposits:
- Establish a daily cutoff ensuring collections are credited to the appropriate Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. no later than the Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after receiving them.
- Ensure collections deposited to the Clearing AccountClearing AccountLender account at an Eligible Depository used either for
receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or
disbursing funds after transfer… are credited to the applicable Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds.
by:
- for non-ACHACHElectronic Automated Clearing House network for processing U.S. banking transactions. funds, the first Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after receiving them; or
- for ACHACHElectronic Automated Clearing House network for processing U.S. banking transactions. funds, the second Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after receiving them, but this does not extend your deadline to remit funds to Fannie Mae.
| Section 303 | |
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| 303.01 | |
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Requirements
You must:
- Maintain 1 separate P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits.
for each of these 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.
categories:
- Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and PFP Mortgage LoansPFP Mortgage LoansMortgage Loan originally purchased as a Cash Mortgage Loan or held in Fannie Mae’s portfolio, but subsequently securitized as an MBS. ;
- MBS Mortgage LoansMBS Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan.
, including
- MBS Mortgage LoansMBS Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. issued using a REMICREMICReal Estate Mortgage Investment Conduit election after January 1, 2021, and
- MBS for BondsMBS for BondsFannie Mae MBS: issued to credit enhance tax-exempt Bonds; or exchanged for Bonds redeemed at MBS issuance. ;
- Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. or transactions with Credit Enhancement InstrumentsCredit Enhancement InstrumentsAgreement between Fannie Mae and a Bond Trustee where Fannie Mae provides credit enhancement of a Credit Enhancement Mortgage Loan, Bonds issued to finance a Credit Enhancement Mortgage Loan, or an Interest Rate Hedge Agreement; and if applicable, a Bond liquidity facility. ;
- REMICREMICReal Estate Mortgage Investment Conduit transactions submitted in the Multifamily Negotiated Transactions (MFNT) application; and
- any other Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. .
- Not commingle P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. funds among 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. categories. For example, P&IP&IPrincipal and interest funds for an MBS Mortgage LoanMBS Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for an issued MBS backed by the Mortgage Loan. may not be commingled with P&IP&IPrincipal and interest funds for a Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. , even for the same BorrowerBorrowerPerson who is the obligor per the Note. .
- Use P&I Custodial AccountsP&I Custodial AccountsCustodial Account for principal and interest deposits.
for all BorrowerBorrowerPerson who is the obligor per the Note.
P&IP&IPrincipal and interest
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.
payments, including any
- unscheduled principal or interest payments,
- Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. , or
- recovered Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. .
Guidance
You may commingle P&IP&IPrincipal and interest funds for all 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. within the same 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. category.
| 303.02 | |
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Requirements
You must only withdraw funds from the P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. to:
- Remit funds to Fannie Mae.
- Reimburse a Delinquency AdvanceDelinquency AdvanceYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. recovered from subsequent collections.
- Remove funds erroneously deposited.
- Transfer interest or typical demand deposit or money market account earnings.
- Pay the Guaranty FeeGuaranty FeeFee retained by Fannie Mae for credit enhancing a Mortgage Loan or assuming credit risk on a Mortgage Loan, and which may be expressed as a percentage. (unless you received a notice of default from any Security Trust Indenture guarantor).
- Remove fees, charges, or other amounts deposited on a temporary basis, including
- late charges,
- Servicing FeesServicing FeesFee a Servicer receives for collecting payments, managing operational procedures, and assuming your portion of credit risk for a Mortgage Loan, and which may be expressed as a percentage. , or
- unsecuritized excess spread (i.e., when a 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. Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. is greater than the MBS Pool'sMBS Pool'sMBS Security backed by MBS Mortgage Loans. Pass-Through RatePass-Through RateMortgage Loan Gross Note Rate minus: for MBS Mortgage Loans, the Guaranty Fee, minus the Servicing Fee; and for Cash Mortgage Loans, the Servicing Fee. ).
- Clear and close the account.
- Transfer any funds to 1 or more other Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. per this Chapter.
| Section 304 | |
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| 304.01 | |
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Requirements
You must:
- use T&I Custodial AccountsT&I Custodial AccountsCustodial Account for the deposit of T&I and other impound escrow funds.
for
- all BorrowerBorrowerPerson who is the obligor per the Note. payments for T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. per Part V, Chapter 3: Custodial Accounts, Section 304.02: T&I Impositions, and
- Servicing AdvancesServicing AdvancesAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… you make for these items; and
- not commingle T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds.
funds with
- P&I Custodial AccountP&I Custodial AccountCustodial Account for principal and interest deposits. funds, or
- Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. funds.
Operating Procedures
You may establish:
- 1 T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. for all T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. deposits from all 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. ; or
- 2 separate T&I Custodial AccountsT&I Custodial AccountsCustodial Account for the deposit of T&I and other impound escrow funds.
, with funds for all
- Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. in 1 T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. , and
- Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. in the other T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. .
You must obtain Fannie Mae’s consent to establish a separate T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. for an individual
- 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. , or
- BorrowerBorrowerPerson who is the obligor per the Note. .
| 304.02 | |
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Requirements
Unless precluded by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , you must:
- collect monthly payments from the BorrowerBorrowerPerson who is the obligor per the Note. ;
- ensure all T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it.
are timely paid, including:
- real estate taxes;
- special assessments;
- water and sewer assessments;
- PILOTsPILOTsPayment In Lieu Of Taxes. ;
- insurance premiums;
- ground lease rents; and
- all other charges or obligations that could become a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. against 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
- pay any penalty or late fee if you fail to make timely payments.
Guidance
You may:
- Charge the BorrowerBorrowerPerson who is the obligor per the Note. for any penalty or late fee incurred if the failure to timely pay was due to insufficient T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. funds.
- Use qualified third-party vendors (that you manage and monitor) to
- collect T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. funds, and
- pay T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. .
| 304.03 | |
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Requirements
T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. shortfalls must be paid by
- the BorrowerBorrowerPerson who is the obligor per the Note. , or
- you (i.e., a Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,…).
| 304.04 | |
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Requirements
You must not use any T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. funds to:
- supplement a shortfall in the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly P&IP&IPrincipal and interest payment to Fannie Mae;
- reimburse yourself for any Servicing AdvanceServicing AdvanceAll amounts required to be paid by the Borrower, for all taxes and assessments against each Property, all insurance premiums for insurance for each Property to insurance carrier(s) acceptable to Fannie Mae, in accordance with the Guide, and any other payment, as determined by Fannie Mae,… unless it is recovered from subsequent collections for that 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. ; or
- supplement a shortfall in a Borrower'sBorrower'sPerson who is the obligor per the Note. taxes or insurance payment using another Borrower'sBorrower'sPerson who is the obligor per the Note. tax or insurance deposits.
Guidance
You may use a Borrower'sBorrower'sPerson who is the obligor per the Note. own tax or insurance deposits to cover a shortfall in the Borrower'sBorrower'sPerson who is the obligor per the Note. tax or insurance obligation if you adjust future deposits per Part V, Chapter 3: Custodial Accounts, Section 308.04B: Insufficient Funds.
Requirements
To pay any T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. , you must not
| Section 305 | |
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| 305.01 | |
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Requirements
If required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , you must establish Collateral Agreement Custodial AccountsCollateral Agreement Custodial AccountsCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. for the Borrower'sBorrower'sPerson who is the obligor per the Note. deposits for any:
- Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. ;
- Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ;
- operating deficit escrow; and
- other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. escrow.
Operating Procedures
You may establish
- 1 account for all Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. deposits, or
- a separate Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds.
for each:
- 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. ;
- Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. type;
- BorrowerBorrowerPerson who is the obligor per the Note. ; or
- Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
| 305.02 | |
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Operating Procedures
You must close the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. per Part V, Chapter 3: Custodial Accounts, Section 302.01: Notifications after you
- complied with the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and
- disbursed all Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. funds.
| Section 306 | |
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Requirements
When establishing a Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer…, you must:
- use an Eligible Depository;
- title the account to reflect it is custodial; and
- inform the depository in writing it is a custodial account.
Operating Procedures
If you use a Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… for deposits and disbursements, you:
- must establish a separate account for collections and disbursements;
- may use debit and credit memos to transfer funds between the Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… and the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. ; and
- are not required to title the Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… in Fannie Mae’s name, but your records must show Fannie Mae’s interest in the deposits.
Guidance
All Clearing AccountsClearing AccountsLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… should have a zero balance at the close of each Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
| Section 307 | |
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Guidance
You may use Drafting AccountsDrafting AccountsCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. to simplify transferring funds to Fannie Mae.
Requirements
You must comply with Part V, Chapter 3: Custodial Accounts, Section 306: Clearing Accounts when establishing a Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. .
Requirements
| Topic | You must... |
|---|---|
| Securitized Mortgage Loans (Other Than PFP MBS) |
Use separate consolidated Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. for drafting:
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| Corporate/General Lender Accounts | Not designate your corporate, general ledger, or other internal operating account as a Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. . |
| Records | Maintain records of the commingled fund sources on an individual 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. basis. |
Operating Procedures
| Topic | You... |
|---|---|
| Establishing Accounts | Must submit a Letter of Authorization (Form 2050). |
| Timely Remittance | Must move all funds due into the account to ensure timely remittance to Fannie Mae. |
| Cash Mortgage Loans | May temporarily commingle P&IP&IPrincipal and interest funds for all Cash Mortgage LoanCash Mortgage LoanMortgage Loan purchased by Fannie Mae in exchange for cash. categories per Part V, Chapter 3: Custodial Accounts, Section 303.01: Accounts and Deposits into 1 consolidated Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. under your master 5-digit ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. number. |
| Securitized Mortgage Loans | May temporarily commingle P&IP&IPrincipal and interest funds for all Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. categories per Part V, Chapter 3: Custodial Accounts, Section 303.01: Accounts and Deposits into 1 consolidated Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. under your master 5-digit ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. number. |
| P&I Funds | May designate 1 Drafting AccountDrafting AccountCustodial Account established by the Lender for the benefit of Fannie Mae and for which Fannie Mae has authority to transfer funds. for P&IP&IPrincipal and interest funds for each 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. category per Part V, Chapter 3: Custodial Accounts, Section 303.01: Accounts and Deposits under each of your 9-digit ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. numbers. |
| Commingling Timing | Cannot commingle funds earlier than 1 Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. before the funds will be drafted. |
| System |
Must, for both Cash Mortgage LoansCash Mortgage LoansMortgage Loan purchased by Fannie Mae in exchange for cash. and Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. , use the Cash Remittance SystemCash Remittance SystemMultifamily system where you set up and maintain banking instructions for Fannie Mae’s drafting of remittances per Part V, Chapter 2: Reporting and Remitting, Section 209: Remittance Procedures. to designate specific Custodial AccountsCustodial AccountsAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. from which Fannie Mae remittances can be automatically drafted per Part V, Chapter 2: Reporting and Remitting, Section 209.03: Cash Remittance System. |
| Section 308 | |
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Requirements
You must analyze and reconcile each Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. and associated Clearing AccountsClearing AccountsLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… monthly.
Operating Procedures
At a minimum, your reconciliation must include:
- a depository reconciliation;
- the cashbook balance composition; and
- an explanation of line items.
Fannie Mae may review your reconciliation including:
- an explanation of any adjustments you made;
- the specific cashbook balances; and
- any individual components.
While Fannie Mae does not prescribe a recordkeeping method to generate a cashbook balance, you must:
- maintain the integrity of the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. balances reported on your reconciliations;
- be able to substantiate each cashbook component; and
- retain sufficient detail to perform the following cashbook computation:
| Function | Beginning Cashbook Balance |
|---|---|
| + | Receipts |
| - | Disbursements |
| +/- | Cashbook Adjustments |
| = | Ending Cashbook Balance |
| 308.02 | |
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Operating Procedures
You must maintain adequate documentation supporting the Borrower'sBorrower'sPerson who is the obligor per the Note. payment records, including Clearing AccountClearing AccountLender account at an Eligible Depository used either for receiving funds for various loans and for the benefit of multiple investors, and from which segregated funds are transferred to specific Custodial Accounts held solely for the benefit of Fannie Mae, or disbursing funds after transfer… credits and charges.
| 308.03 | |
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Requirements
You must maintain and administer all BorrowerBorrowerPerson who is the obligor per the Note. funds held in a T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. on an individual 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. basis.
Operating Procedures
At a minimum, for each 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. in a T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. , you must account for:
- T&I ImpositionT&I ImpositionAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. payment deadlines and amounts funded from the account;
- monthly funds due for deposit;
- funds received and deposited;
- withdrawals; and
- amounts you advance for T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. .
| 308.04A | |
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Operating Procedures
You must:
- Analyze your T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds.
records:
- annually for each 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. ; and
- when a material change occurs in a Borrower'sBorrower'sPerson who is the obligor per the Note. T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. .
- Determine if the Borrower'sBorrower'sPerson who is the obligor per the Note. T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. funds, plus the Borrower'sBorrower'sPerson who is the obligor per the Note. required monthly deposits, are sufficient to timely pay all upcoming T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. .
| 308.04B | |
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Operating Procedures
If the Borrower'sBorrower'sPerson who is the obligor per the Note. T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. funds are insufficient to timely pay all T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. , you must
- bill the BorrowerBorrowerPerson who is the obligor per the Note. for any shortage, and/or
- increase the Borrower'sBorrower'sPerson who is the obligor per the Note. monthly T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. deposit.
After adjusting the Borrower'sBorrower'sPerson who is the obligor per the Note. future deposits, you may use those funds for a shortfall in either taxes or insurance.
| 308.04C | |
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Requirements
You must not maintain a surplus of more than 2 monthly T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments in the T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. .
Operating Procedures
If the T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. has a surplus of more than 2 monthly T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments, you must:
- refund the BorrowerBorrowerPerson who is the obligor per the Note. the amount of the surplus above the 2 monthly T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments; or
- reduce the Borrower'sBorrower'sPerson who is the obligor per the Note. required monthly T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. deposit to reduce the surplus to no more than 2 monthly T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. payments within 12 months.
You cannot refund any T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. surplus if the BorrowerBorrowerPerson who is the obligor per the Note. or any other party has defaulted under any of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. beyond any grace or cure period.
| 308.05 | |
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Operating Procedures
By January 31st of each year, you must issue the BorrowerBorrowerPerson who is the obligor per the Note. a T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. statement reporting all activity during the preceding calendar year. You can provide this statement
- in writing, or
- via electronic access.
Guidance
Your annual T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. statement must include:
- Borrower'sBorrower'sPerson who is the obligor per the Note. fund balance at the beginning of the year;
- total BorrowerBorrowerPerson who is the obligor per the Note. deposits into the account;
- total withdrawals you made;
- itemized list of specific T&I ImpositionsT&I ImpositionsAmounts for taxes, insurance, and other charges assessed against or owing on the Property which you deem necessary to protect the Property and/or prevent Liens imposed on it. and other charges (e.g., real estate taxes, insurance premiums, etc.) you paid with the withdrawals;
- Borrower'sBorrower'sPerson who is the obligor per the Note. fund balance at the end of the year; and
- amount of interest, if any, paid or credited to the BorrowerBorrowerPerson who is the obligor per the Note. on their funds.
| Section 401 | |
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| 401.01 | |
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This Chapter covers asset management of performing 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. . This Chapter does not apply to Non-Performing Mortgage LoansNon-Performing Mortgage LoansMortgage Loan with an uncured default. , unless otherwise stated. For asset management of Non-Performing Mortgage LoansNon-Performing Mortgage LoansMortgage Loan with an uncured default. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with:
- Part VI, Chapter 1: Watchlist Management; and
- either:
- Part VI, Chapter 3: Non-Performing Primary Risk Mortgage Loans; or
- Part VI, Chapter 5: Non-Performing Secondary Risk Mortgage Loans.
This Chapter covers the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. :
- administration of Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- review of a delegated and non-delegated BorrowerBorrowerPerson who is the obligor per the Note. request;
- approval of a delegated BorrowerBorrowerPerson who is the obligor per the Note. request;
- management of insurance matters;
- review of Transfer/AssumptionTransfer/AssumptionTransaction changing the ownership of the Borrower or Property. requests; and
- administration of specialty product types.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit all BorrowerBorrowerPerson who is the obligor per the Note. requests, along with any additional information and required documents, through 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. . If submitting through 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. is not feasible, overnight mail must be used and sent to:
Fannie Mae
Attention: (Drawer AM, Structured AM, Seniors AM,
or Assumption/Transfer)
Mailstop 8V-21
1100 15th Street, NW
Washington, DC 20005.
Fannie Mae email addresses and contact information for notices required in this Chapter are located in the Glossary.
For each 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and facilitate compliance or take appropriate actions to address any instance of noncompliance. All Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and all other documents required to be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be maintained in accordance with the Program Rules.
In the event of any conflict between or among the requirements of the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. , and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the governing priority shall be, in order:
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. ;
- Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ; and
- GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
Fannie Mae delegates significant decision-making authority and responsibility to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to the extent specified in the Multifamily Asset Management Delegated Transaction Forms (Form 4636 series) (each, the “Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. ”), covering the following matters:
- Transfers/Assumptions (Form 4636.TA);
- Commercial Leases (Form 4636.CL);
- Condemnations (Form 4636.C);
- CondominiumCondominiumStatutorily established Property ownership regime where Condominium Documents designate: individual units for separate ownership; and common areas for shared use and joint ownership by the unit owners. /Cooperative Property Conversions (Form 4636.CC);
- Easements (Form 4636.E);
- Oil, Gas, or Mineral Rights Leases (Form 4636.OGL);
- Partial Releases of Collateral (Form 4636.PR);
- Property Management Changes (Form 4636.PM); and
- Use Conversions (Form 4636.UC).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the instructions in the Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. , which will specify which matters are delegated and which are non-delegated. All delegated and non-delegated requests must be submitted through 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. , with the Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. and the required supporting documents.
A transaction memo must be submitted for any unusual matters not covered in the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , or matters that could materially affect Fannie Mae’s security interests, investment interests, or the interests of InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. in Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. . Decision-making authority is more limited for Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , Bulk DeliveriesBulk DeliveriesStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. , and certain Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. Loan matters. Neither the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. nor Fannie Mae has the authority to waive any local, state, or federal law or regulation.
Fannie Mae often retains outside legal counsel to review non-delegated matters or other matters that require Fannie Mae’s legal review. In such instance, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower’sBorrower’sPerson who is the obligor per the Note. written agreement to pay the reasonable legal fees and expenses of Fannie Mae’s counsel before any legal work may commence.
If Fannie Mae outside counsel review is required or requested, the BorrowerBorrowerPerson who is the obligor per the Note. must pay the applicable legal fee, which will either be a fixed fee or an estimated fee depending on the type of request. For an estimated fee request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify the BorrowerBorrowerPerson who is the obligor per the Note. that the actual legal fee may be higher or lower than the estimate, depending on the ultimate scope of the request, and the time needed to resolve the issue.
Fannie Mae will:
- apprise the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of any likely increases in the estimated review fee;
- provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. the amount of the fee for any fixed fee request; and
- provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a summary invoice directly from Fannie Mae’s outside counsel.
Upon receipt of the invoice, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must arrange for payment of Fannie Mae’s legal fees. The legal fee must be collected from the BorrowerBorrowerPerson who is the obligor per the Note. before engaging Fannie Mae outside counsel.
Fannie Mae may provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. conferring the right to execute certain documents as attorney-in-fact on behalf of Fannie Mae. If granted, the actions authorized in the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. will be specifically limited, and allow the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to execute only those documents listed in the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. . To exercise the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must execute documents as “[Name of Servicer], as Attorney-in-Fact for Fannie Mae”. The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. designation as attorney-in-fact will be subject to review and renewal, and the power granted under the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. may be revoked by Fannie Mae at any time. Requests for new and replacement Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. should be submitted through 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. or as required by Part V, Chapter 4: Asset Management: Loan Document Administration, Section 401.01: General. As each Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. expires on a specified date according to its terms, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the expiration date and request a new Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. at least 30 days prior to the expiration date.
| Section 404 | |
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All documents requiring execution by Fannie Mae (clearly identified by Fannie Mae Loan NumberLoan Number10-digit number assigned by Fannie Mae to each Mortgage Loan. ) must be sent to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. . Fannie Mae will execute the documents without prior review if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. provides the certifications described in this Section.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must include directions for returning the documents, including:
- contact name;
- overnight delivery mailing address;
- phone number; and
- email address.
For any document submitted to Fannie Mae for execution when the servicing decision has been delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide written certification to Fannie Mae that:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has reviewed the proposed transaction, and approval by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is in compliance with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , any Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , and the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has approved the proposed transaction;
- no approval or waiver is required from Fannie Mae;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel has reviewed and approved all relevant documents associated with the transaction, and determined that those documents are sufficient to fully effectuate the transaction; and
- any material changes to Fannie Mae form Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. have been approved by Fannie Mae.
For any document submitted to Fannie Mae for execution when the servicing decision has not been delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide written certification to Fannie Mae that:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has reviewed the proposed transaction, and approval by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated under the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommends approval by Fannie Mae of the proposed transaction;
- any required waivers have been submitted by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel has reviewed and approved all relevant documents associated with the transaction, and determined that those documents are sufficient to fully effectuate the transaction; and
- any material changes to Fannie Mae form Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. have been approved by Fannie Mae.
| Section 405 | |
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Certain fees may be due to Fannie Mae in connection with a BorrowerBorrowerPerson who is the obligor per the Note. servicing request. The specified fees are for typical requests; however, higher fees may be required for complicated or non-standard requests, or for other matters not specified in this Chapter. No later than 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following receipt of any fee by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit to Fannie Mae, by wire transfer of immediately available funds, Fannie Mae’s portion of the fee. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the wire transfer confirmation number, wire date, and wire amount through 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. immediately following each funds transfer, as follows:
ABA Number: 021 039 500
Telegraphic Abbreviation: FNMA/NYC
Account Number: 169220242
Note: Type of fee (e.g., Assumption/Transfer),
Fannie Mae Loan Number and Property Name
Attention: Trans code 507 - GL 747669921.
| Section 406 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must take all applicable actions required to fully effectuate the transaction, including:
- amending the recorded Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. or filed Uniform Commercial Code (UCCUCCUniform Commercial Code ) financing statements;
- updating 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). survey;
- obtaining an endorsement to the mortgagee’s title insurance policy showing no impairment of Fannie Mae’s LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. position, and dating down title to reflect any recorded amendment to the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- recording all applicable documents, and sending the required documents through 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. ;
- sending an executed original copy of any new or amended Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ;
- following the requirements of Part V, Chapter 3: Custodial Accounts, Section 301: Generally if changes are required to any existing Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. , or if any new Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. must be established in connection with the transaction;
- retaining copies of all documents, correspondence, and any internal notes or analysis relating to the transaction in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
- taking any other actions the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or its legal counsel determines are necessary.
| Section 407 | |
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A Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is generally not permitted unless it complies with Fannie Mae’s requirements. Approval of any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and must be approved in advance by Fannie Mae. Additionally:
- with respect to any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must abide by the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , and any Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , provided that the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. will control in the case of any conflict;
- unless the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not permit the BorrowerBorrowerPerson who is the obligor per the Note. , without prior Fannie Mae approval, to incur the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. or allow a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. securing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. to be placed against 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). ;
- if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. without the approval of the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , the consent of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae is not required; however, notice of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. and a copy of any documents must be submitted through 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. ;
- the BorrowerBorrowerPerson who is the obligor per the Note. and the subordinate lender must enter into and record the appropriate Subordination Agreement (Form 6414 or Form 6456 for the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; Form 4503 or Form 4507 for the 4000 Series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ); and
- the proceeds of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must benefit 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). (i.e., cash-out financing is not permitted).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. in writing upon learning of any unauthorized additional unsecured debt or indebtedness secured by a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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). or of any pledge of ownership interests that is not permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and send the BorrowerBorrowerPerson who is the obligor per the Note. a Reservation of Rights Letter (Form 4804) with a copy submitted through 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. . Fannie Mae will determine whether to approve the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , or exercise its remedies.
Part III, Chapter 13: Supplemental Mortgage Loans, contains the requirements for Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , and Part III, Chapter 7: Multifamily Affordable Housing Properties contains additional requirements for subordinate financing with respect to a Multifamily Affordable Housing PropertyMultifamily Affordable Housing 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. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure adherence to all applicable requirements.
The BorrowerBorrowerPerson who is the obligor per the Note. must pay the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a $2,500 review fee. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may increase or decrease its fee at its discretion. No Fannie Mae review fees are due. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may also seek reimbursement from the BorrowerBorrowerPerson who is the obligor per the Note. for all reasonable out-of-pocket costs, including reasonable legal fees incurred by Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. counsel.
If Fannie Mae outside counsel is engaged, the BorrowerBorrowerPerson who is the obligor per the Note. must pay its fee, estimated at $2,500 for Subordinate Financing requests. The actual legal fee may be higher or lower, depending on the ultimate scope of the request and the time necessary to resolve. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will receive a summary invoice directly from Fannie Mae outside counsel and must arrange for payment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be apprised of any likely increases in the estimated review fee. The estimated legal fee must be collected from the BorrowerBorrowerPerson who is the obligor per the Note. before engaging Fannie Mae outside counsel.
Any BorrowerBorrowerPerson who is the obligor per the Note. request for approval of a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must be reviewed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . If acceptable, the request must be submitted for approval through 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. in accordance with the following:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the request to Fannie Mae at least 30 days before the projected closing date of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ; and
- the submission must contain:
- 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. (obtained at the Borrower’sBorrower’sPerson who is the obligor per the Note. cost), dated no earlier than 90 days prior to the date of the BorrowerBorrowerPerson who is the obligor per the Note. request for approval of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , that complies with Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting spreadsheet showing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ’s effect on 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, expenses, NCFNCFOn 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…, 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 Pay Preferred Equity payments. , and LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. ;
- a copy of the final, unsigned loan documents evidencing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , with the loan amount, interest rate, payment schedules, and all other transaction related information completed;
- the MBAMBAMortgage Bankers Association
Standard Inspection Form documenting a physical 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).
, performed at Borrower’sBorrower’sPerson who is the obligor per the Note.
expense, occurring no earlier than 90 days before the date of the BorrowerBorrowerPerson who is the obligor per the Note.
request for the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property.
; provided that, if the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
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).
reveals that 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 being properly maintained, the BorrowerBorrowerPerson who is the obligor per the Note.
request will not be approved by Fannie Mae unless:
- a Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is sufficiently funded; and
- the BorrowerBorrowerPerson who is the obligor per the Note. makes any Immediate Repairs identified by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. prior to the closing date of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ; and
- a title policy endorsement for 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). showing no unauthorized LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. or encumbrances of any nature against 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). .
For a Cooperative PropertyCooperative PropertyMultifamily residential property owned by a Cooperative Organization. , the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is unacceptable if the potential increase in the Cooperative Maintenance FeeCooperative Maintenance FeePeriodic fee assessed each shareholder or owner of a Cooperative Organization to fund costs and expenses associated with ongoing operations of the Cooperative Property. necessary to cover P&IP&IPrincipal and interest on the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. exceeds 10% of the current Cooperative Maintenance FeeCooperative Maintenance FeePeriodic fee assessed each shareholder or owner of a Cooperative Organization to fund costs and expenses associated with ongoing operations of the Cooperative Property. .
Fannie Mae will provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a written decision regarding the BorrowerBorrowerPerson who is the obligor per the Note. request, after which the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify the BorrowerBorrowerPerson who is the obligor per the Note. in writing and retain the notice in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 407.06 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- not permit any changes to the form Subordination Agreement (Form 6414 orForm 6456 for the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; Form 4503 or Form 4507 for the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ) without the prior written consent of Fannie Mae;
- obtain a satisfactory title policy endorsement effective as of the date of recordation of the subordinate security instrument that:
- insures the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. as senior to the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the subordinate security instrument; and
- reflects the recordation of the Subordination Agreement;
- submit a copy of the recorded Subordination Agreement through 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. ; and
- send the original executed copy of the recorded Subordination Agreement and the title policy endorsement to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain copies of each in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| Section 408 | |
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| 408.01A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- administer and manage funds or collateral under all Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; and
- ensure that any disbursements of funds, or other collateral releases or reductions, are:
- approved only for valid reasons;
- appropriately documented; and
- consistent with the provisions of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. and this Section.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deposit funds held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets the requirements of Part V, Chapter 3: Custodial Accounts.
| 408.01C | |
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Funds must be used only for the purposes stated in the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and must not supplement a partial P&IP&IPrincipal and interest payment or cover any other BorrowerBorrowerPerson who is the obligor per the Note. obligation unrelated to the primary purposes of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
All funds or other collateral held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. constitute additional security for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. and the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . In the event of a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Fannie Mae reserves the right to apply (or direct the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to apply) the funds or other collateral held under any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in any manner allowed under the terms of such Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Following a default, unless instructed by Fannie Mae, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not:
- release any funds or other collateral held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- apply any funds or collateral to the repayment of 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. ; or
- reimburse itself from such funds or collateral for any expenses or losses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
| 408.01E | |
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If the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. contemplates the payment of fees or costs by the BorrowerBorrowerPerson who is the obligor per the Note. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain such fees or costs for its own account, adhering to any specific billing provisions of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Any fees or costs retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be reasonable in relation to the nature and scope of the services provided by or on behalf of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use any of the funds or other collateral held under the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. to cover such fees or costs. However, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may deduct such fees or costs from any disbursement of funds to the BorrowerBorrowerPerson who is the obligor per the Note. , provided such disbursements, fees, and costs are permitted under the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , or if the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
Except as noted in this Chapter, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not waive or modify the terms of any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
| 408.02A | |
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The provisions of this Section govern Achievement AgreementsAchievement AgreementsAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. and all Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , other than:
- Multifamily Loan AgreementsMultifamily Loan AgreementsAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. , including 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… and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…;
- Security InstrumentsSecurity InstrumentsInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- Replacement Reserve AgreementsReplacement Reserve AgreementsThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…; and
- Completion/Repair AgreementsCompletion/Repair AgreementsThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain an effective system for monitoring the expiration date of any Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and ensure that all actions required to be taken pursuant to any such agreement have been timely performed and, if not timely performed, immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. .
Any request for a release or reduction of collateral must be processed in accordance with this Section, unless these instructions conflict with the terms and conditions of the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
1. General
If the BorrowerBorrowerPerson who is the obligor per the Note. has not satisfied the requirements for a release or reduction of collateral contained in the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not approve the BorrowerBorrowerPerson who is the obligor per the Note. request, and may decline the BorrowerBorrowerPerson who is the obligor per the Note. request without notice to Fannie Mae. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied the requirements of the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must recommend the release or reduction of collateral through 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. , accompanied by the supporting documentation listed below. Upon receipt and review of all pertinent information, Fannie Mae will approve or deny the request and notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its decision.
2. Supporting Documentation and Analysis
The following documentation must be submitted through 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. , and maintained in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , in connection with each request for a release or reduction of collateral
(a) Income and Expense Statements; Current Rent Roll
PropertyPropertyMultifamily 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 expense statements and a current rent roll must be obtained from, and certified by, the BorrowerBorrowerPerson who is the obligor per the Note. . The statements must cover the applicable period required by the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Based on the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Parts I - III, the certified income and expense statements, and the current rent roll, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must develop a 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… estimate to determine whether the release or reduction provisions of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied. The income, vacancy, collection loss, and concession information should support the Effective Gross IncomeEffective Gross IncomeOn an annual basis or any specified period, the total of Net Rental Income plus other income per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is relying on in assessing whether a release or reduction is warranted.
In deriving its estimate of Effective Gross IncomeEffective Gross IncomeOn an annual basis or any specified period, the total of Net Rental Income plus other income per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust for:
- income that was not allowed or recognized in the original underwriting;
- the effect of a partial year’s performance when the shorter period reflects the short-term, positive impact from seasonal variations that do not 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). year-round performance; and
- non-monetary concessions, requiring the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to deduct the pro-rata value of the concession from the monthly rent for the applicable unit.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all appropriate types of expenses, including underwritten Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, are included, and that any inappropriate expenses (e.g., capital improvement costs, repair costs covered by funds set aside for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , partnership costs, etc.) are excluded. To avoid unwarranted releases or reductions of collateral, the expense figures must reflect stabilized operating conditions, and must not be understated due to efficiencies or savings that could not be replicated by a different owner or manager, or that would not be recognized for underwriting purposes.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a line-by-line expense analysis, including a comparison of the original underwriting estimates with the actual expenses shown on the Borrower’sBorrower’sPerson who is the obligor per the Note. income and expense statements. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the greater of the underwritten or the actual expense figure shown for each item on the Borrower’sBorrower’sPerson who is the obligor per the Note. statement.
(b) Servicer’s Analysis
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide an analysis and recommendation regarding the release or reduction of collateral, including any calculations required under the terms of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
(c) Correspondence
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide any correspondence with the BorrowerBorrowerPerson who is the obligor per the Note. that pertains to the release or reduction request.
3. Property Inspection
Before approving any request for a release or reduction of collateral, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a physical 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). to verify that:
- no deferred maintenance exists;
- necessary capital improvements have been made; and
- the general management and operations are acceptable and characteristic of a stabilized project.
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection must occur no more than 90 days prior to the date of the submission to Fannie Mae of the release or reduction request. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the results of its inspection by completing the MBAMBAMortgage Bankers Association Standard Inspection Form.
1. Draws Triggered by Adverse Events
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. when any of the following events occur, which could result in a draw on a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. issued for an Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. :
- a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- the failure to renew or replace an expiring Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. at least 30 days prior to its expiration date, or other deadline specified in the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; or
- the failure to replace a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. by the replacement deadline when the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. is no longer acceptably rated.
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. notice to Fannie Mae must include a recommended course of action, and be accompanied by a copy of the executed Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
2. Draw Resulting from Noncompliance with Issuer Rating Requirements or Expiration of Letter of Credit
If a draw on the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. occurs due to noncompliance with the rating requirements for the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. or because of an imminent expiration of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , Fannie Mae will hold the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds in its designated account until the earliest of the following:
- the BorrowerBorrowerPerson who is the obligor per the Note.
presents a replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
and Fannie Mae agrees, in its sole discretion, to accept the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
;
(NOTE: Any agreement by Fannie Mae to accept a replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. will be conditioned upon the Borrower’sBorrower’sPerson who is the obligor per the Note. payment of all administrative and legal costs incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae in connection with the replacement of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .) - the release or reduction provisions of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied; or
- the BorrowerBorrowerPerson who is the obligor per the Note. pays all amounts due and payable under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any required Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , and Fannie Mae releases the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. .
3. Draws Occasioned by Borrower Request
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives a request from the BorrowerBorrowerPerson who is the obligor per the Note. to draw on the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. and have the proceeds applied as a partial prepayment against the UPBUPBUnpaid Principal Balance , and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. allow partial prepayments, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately forward the request, along with an analysis and recommendation, including an estimate of the applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , to Fannie Mae. If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not allow partial prepayments, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deny the BorrowerBorrowerPerson who is the obligor per the Note. request.
Fannie Mae will assess the BorrowerBorrowerPerson who is the obligor per the Note. request and determine if the proposed use of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or other collateral would be in the best interest of Fannie Mae and/or the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. in any Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. . Any decision to apply Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or apply other collateral to a partial prepayment will be made by Fannie Mae in its sole discretion. Fannie Mae will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its determination and will provide appropriate follow-up instructions.
4. No Interest on Proceeds Held by Fannie Mae
Fannie Mae will not pay interest on the cash proceeds it holds resulting from a draw on a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .
Notwithstanding anything contained in this Chapter, if no Event of Default has occurred and is continuing under any of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (including Forbearance), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirement prohibiting the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. from immediately approving a partial or final disbursement request of Additional Escrows for P&IP&IPrincipal and interest , T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , and Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. required by:
- Form 6268 – Modifications to Multifamily Loan and Security Agreement (Additional Reserve Escrows);
- Form 6640 – Amendment to Multifamily Loan and Security Agreement (Additional P&I Escrow Agreement); or
- Form 6641 – Additional P&I Escrow Agreement (4000 series Loan Documents).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- determine whether the waiver requires a Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment; and
- document any amendment in any form the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable.
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document all disbursement requests, including any supporting documentation and analysis, in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are:
- 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.
documented with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using
Form 6001 series Loan Documents, or
another Fannie Mae-approved form.
, plus 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…;
- Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Modifications to Multifamily Loan and Security Agreement (Rehabilitation Reserve - Moderate Rehabilitation/Substantial Rehabilitation); or
- another approved Modifications to Multifamily Loan and Security Agreement; and
- 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. documented with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must administer the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to ensure the timely implementation of all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. . Once the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are completed and comply with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enter the final completion dates and close out the work items for 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. in the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. module in 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. . Additional information may be required 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. assigned to Loss Mitigation. 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. does not have work items in 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. , no further action in 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. is required.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to extend the time limits for making Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. if:
- the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. subject to the extension request do not involve life safety issues; and
- 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. does not have a Fannie Mae risk rating of Substandard or Doubtful.
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of 30 days for a life safety issue if the BorrowerBorrowerPerson who is the obligor per the Note. is diligently pursuing completion of the related Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
The duration of any permitted non-life safety extension may not exceed:
- 1 year past the original completion date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , for 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. without loss sharing; and
- 2 years past the original completion date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , 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. with loss sharing.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Non-Monetary Default Borrower Request in 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. if the required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are not completed with this timeframe.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of up to 90 days past the original completion date for any Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. which the BorrowerBorrowerPerson who is the obligor per the Note. agreed to implement to qualify as a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to extend the time limit beyond 90 days.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- determine whether the extension requires an amendment to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- document a required amendment in any form the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable.
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are delegated the authority to move required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. from 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… to the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, or from the Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. to the Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…, and the associated deposit from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. into the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , provided:
- the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. does not involve life safety issues;
- delaying the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. will not materially negatively impact 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 total amount of Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. being transferred does not exceed the lesser of (i) 25% of the original Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , or (ii) $75,000.
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to move required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. to the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… for any Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that the BorrowerBorrowerPerson who is the obligor per the Note. agreed to implement in order to qualify as a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- send the executed Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ;
- submit a copy of the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment through 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. 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. with a Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. work item in 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. ; and
- retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain a copy of the executed Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and 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 Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- hold all Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds in an account that meets the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. requirements of Part V, Chapter 3: Custodial Accounts;
- ensure that all necessary permits are obtained, and that all required work is satisfactorily completed in a good and workmanlike manner by the completion dates stipulated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- for a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans.
, ensure all Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
are completed in a timely manner and no later than:
- 12 months after the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- any shorter time period per Part II, Chapter 4: Lease Audits, Inspections, and Reserves, Section 404: Property Condition Assessment (PCA) for capital improvements identified as Immediate Repairs by the PCAPCAAssessment of the Property's physical condition and historical operation. ;
- process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- perform required inspections of completed work and, if appropriate, work in progress and, if necessary, arrange inspections by qualified professionals;
- ensure that the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. work does not result in any mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
- promptly submit a Non-Monetary Default Borrower Request in 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. for any Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
- take appropriate steps to remedy or address any default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
| 408.03E | |
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1. General
Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are available to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for costs incurred for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may authorize the release of funds to cover the costs of other reasonable and necessary repairs, replacements, or improvements that are not specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. only if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit the disbursements, and all conditions are fully satisfied.
2. Required Documentation for Disbursement
To obtain reimbursement, the BorrowerBorrowerPerson who is the obligor per the Note. must submit a written requisition specifying the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought, including:
- the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. completed;
- the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased in connection with the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- the cost of all contracted labor or other services involved in completing the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
The BorrowerBorrowerPerson who is the obligor per the Note. requisition for the specified Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note.
certification that the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance:
identified per the Property Condition Assessment; and
required per the
Completion/Repair Schedule, or
Completion/Repair Agreement.
have been completed:
- in a good and workmanlike manner;
- in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence; and
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman.
3. Disbursement of Funds (Excluding Final Disbursement)
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may disburse funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if it has received all required documentation and determined that all applicable conditions for disbursement have been met, including (but not limited to) the following:
- all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been completed in a good and workmanlike manner, as evidenced by the Borrower’sBorrower’sPerson who is the obligor per the Note. submission and, if appropriate, an inspection of the completed work (see guidance on inspections below);
- all related invoices for items and services covered by the requisition have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for issuance of a joint check(s), made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the 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). owed funds under such invoices;
- no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist, unless acceptably bonded over;
- no default exists under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- for each Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans.
Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
disbursement, the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
was reported as:
- compliant on the Green Rewards Verification Inspection Form (Form 4221) per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification; or
- noncompliant, and Fannie Mae has approved and closed the remediation in DUS Property Monitor; and
- for a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. with a Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… as an Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are only released after confirming commercial operation of the Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored….
The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. for any requisition, other than the final requisition, may not exceed the actual cost of the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and may be less than the actual cost if, after disbursement, the amount of funds remaining 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. would be less than the anticipated cost of completing all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. plus any holdback specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Notwithstanding the above, once 75% of the total dollar amount of Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. is disbursed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds 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. , provided:
- funds are only released for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that have been fully completed;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has complied with all other disbursement requirements;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. completes an analysis showing that the remaining amount 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. is sufficient to complete all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
- the BorrowerBorrowerPerson who is the obligor per the Note. affirms in writing its obligation to complete the remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. by the required completion dates; and
- the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. is not for a Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that must be released per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification.
For Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. included in a Moderate RehabilitationModerate RehabilitationProperty that will undergo at least $8,000 per unit of Rehabilitation Work. 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. , funds may be periodically disbursed from the applicable Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. or Rehabilitation Reserve Escrow as with a non-Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , rather than only after a compliant verification inspection of Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .
4. Final Disbursement of Funds
Before making the final disbursement of funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm and document the absence of any mechanics’ and materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. by requiring the BorrowerBorrowerPerson who is the obligor per the Note. to obtain an updated title report or a title policy endorsement showing that no such LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the updated title report or endorsement when the total scope of work is less than $75,000. If the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide the required title documentation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a title report or title policy endorsement, and may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may make a final disbursement of all remaining funds upon satisfactory completion of all required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and satisfaction of all other applicable release conditions contained in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
5. Maintenance of Servicing File
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.03F | |
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1. Use of Third Party
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may inspect 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). , or have a qualified independent third party inspect 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). , to confirm that the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for monitoring the third-party’s performance.
2. When Periodic Inspections Are Required
Periodic inspections must be performed as the work progresses if the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. :
- exceed in the aggregate the lesser of:
- $500,000, or 20% of the UPBUPBUnpaid Principal Balance 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. with loss sharing; or
- $250,000, or 10% of the UPBUPBUnpaid Principal Balance 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. without loss sharing; and
- are likely to require more than 6 months to complete.
Inspections must occur at least every 6 months, or more frequently at the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. discretion.
3. When a Final Inspection Is Required
An inspection must be performed to ensure that all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. have been satisfactorily completed before approving and disbursing the final requisition when the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. exceed the lesser of:
- $500,000, or 20% of the UPBUPBUnpaid Principal Balance 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. with loss sharing; or
- $250,000, or 10% of the UPBUPBUnpaid Principal Balance 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. without loss sharing.
4. Confirming Completion/Repairs if Inspection Is Not Required
Even if an inspection is not required by this Section, the BorrowerBorrowerPerson who is the obligor per the Note. must provide evidence to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. that all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed. If not inspected sooner, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm the satisfactory completion of the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. during the next regularly scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
5. Documenting the Servicing File
In all instances, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. whether all work was satisfactorily completed.
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Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds may not be used to cover any administrative or inspection fees due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless expressly permitted Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the BorrowerBorrowerPerson who is the obligor per the Note. agrees in writing. If permitted, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. and deduct the following from any disbursement of funds:
- reasonable fees to cover the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. costs of administering the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- additional fees to cover any reasonable inspection costs that are not adequately covered by general administrative fees collected from the BorrowerBorrowerPerson who is the obligor per the Note. .
| 408.03H | |
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1. Notification of Default to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in 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. for any Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.
2. No Release of Funds to Borrower
No funds may be released to the BorrowerBorrowerPerson who is the obligor per the Note. while the BorrowerBorrowerPerson who is the obligor per the Note. is in default under any of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
For all Green Rewards Mortgage LoansGreen Rewards Mortgage LoansMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure a Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection is performed for all Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. to confirm correct installation, and identify any errors that may hinder 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). achieving the expected savings and benefits.
1. Green Rewards Verification Inspection
For a Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection, the inspector must use the Green Rewards Verification Inspection Form (Form 4221) that is pre-populated with PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). information and the Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. identified as Green Rewards Repairs in 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…. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit Form 4221 within 60 days after the Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection date, and timely resolve any issues identified by Fannie Mae.
2. Minimum Inspector Qualifications
Third-party or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff must attend Fannie Mae's Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection training on the requirements, processes, and documentation before conducting Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspections.
The minimum inspector qualifications correspond to the applicable Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. type, and may be held by the inspection project team, rather than by an individual inspector.
| Efficiency Measures | Description | Minimum Inspector Qualification |
| Basic |
Simple upgrades such as:
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ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure the inspector is either a qualified third-party or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol and Part V, Chapter 5: Surveillance, Section 502.05A: Qualifications. |
| Complex |
Upgrades and changes to building systems, such as:
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3. Unit Inspection
The inspector must inspect a minimum number of occupied and vacant units as follows:
| Total number of units | Minimum number of units to be inspected |
| Less than 20 | 3 units |
| 20 - 55 | 5 units |
| 56 - 99 | 10% of total units |
| 100 - 200 | 10 units |
| 201 - 600 | 5% of total units |
| More than 600 | 30 units |
Form 4221 calculates the required number of units and tracks the number of completed units based on the user's inputs. When unit inspections are required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- Determine the appropriate combination of vacant and occupied units for inspection.
- Determine which vacant and occupied units to inspect.
- Submit at least:
- 1 representative photograph of each Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. listed on Form 4221; and
- 1 photograph of each non-compliant Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .
For Partial Efficiency MeasuresPartial Efficiency MeasuresEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request a rent roll or other documentation identifying the units that received Partial Efficiency MeasurePartial Efficiency MeasureEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). installations, and conduct the Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. of those units.
4. Determining Compliance
An Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is compliant when the inspector:
- inspects each Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. ;
- verifies its proper installation within specifications using product information and field observation;
- confirms the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation meets the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and 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… requirements; and
- documents it on Form 4221.
5. Remediating Noncompliance
When an Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is noncompliant:
- The ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must:
- provide a notice of the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies to the BorrowerBorrowerPerson who is the obligor per the Note. and determine a course of action;
- submit a remediation action plan through the DUS Property Monitor system that:
- addresses 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). Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies; and
- provides a target date for remediation completion that is no more than 60 days after the BorrowerBorrowerPerson who is the obligor per the Note. receives the notice of deficiencies.
- The BorrowerBorrowerPerson who is the obligor per the Note. must correct or complete the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation during the remediation period.
- Fannie Mae may require the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to inspect the remediated Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. based on the severity of noncompliance.
6. Verification Inspection Form Review
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must internally review all Green Rewards Verification Inspection Forms (Form 4221), whether prepared by a third party or by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. before submission.
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. are:
- Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, 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. documented with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…, 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. documented with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must be held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , and are intended to pay for necessary replacements of capital items or major maintenance work to 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). over the term of 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 Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. delegates the authority to amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to revise the terms governing the Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , only the changes expressly permitted by this Section can be made, and the delegation does not expand the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ability to change or modify any other term of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan Document Amendment to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For all Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain a copy of the executed Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- unless the BorrowerBorrowerPerson who is the obligor per the Note. has requested in writing a non-interest bearing account, hold all funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets the requirements of Part V, Chapter 3: Custodial Accounts and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- ensure that all required deposits are made to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- perform required inspections of completed work and, if appropriate, work in progress, and arrange, if necessary, for inspections by qualified professionals;
- ensure that work funded from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. does not result in any mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
- promptly submit a Non-Monetary Default Borrower Request in 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. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
- take appropriate steps to remedy or address any default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for ReplacementsReplacementsCapital item replacements and major maintenance needs identified by the Property Condition Assessment or otherwise required. , Repairs, or Restoration; and
- reassess the adequacy of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or the schedule of required deposits; and
- perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
Based on the results of a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection or a new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. as required below, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may determine that the current level of Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding and scheduled deposits will be insufficient to meet all projected capital item or major maintenance needs. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then:
- adjust the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the:
Borrower’s agreement to replace identified capital items and perform required… or the Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the:
Borrower’s agreement to replace identified capital items and perform required maintenance;
terms for funding the identified capital item replacement and… and the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements.
funding to a sufficient level, if warranted, in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
and Part III, by requiring the BorrowerBorrowerPerson who is the obligor per the Note.
to:
- deposit a lump sum into the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and/or
- increase the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposit; and
- give the BorrowerBorrowerPerson who is the obligor per the Note. at least 30 days advance written notice prior to implementing any of the foregoing changes.
Based on the results of the new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. obtained during the underwriting and delivery of a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may:
- adjust the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding, scheduled deposits, and 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… of all Pre-Existing Mortgage LoansPre-Existing Mortgage LoansMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. to match the Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. underwriting; and
- amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. accordingly.
1. Timing and Waivers
A new full PCAPCAAssessment of the Property's physical condition and historical operation. per Form 4099 is required for:
- all MAHMAHProperty 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. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). every 5 years; or
- for any other 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 a term greater than 10 years, during the 10th Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. , and every 10 years thereafter, while 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. remains outstanding, or per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive the new PCAPCAAssessment of the Property's physical condition and historical operation. for non-MAHMAHProperty 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. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as follows:
| Remaining Loan Term | Servicer Delegation |
| Less than 1 Year |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 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 a:
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| 1 Year to 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 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 a:
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| More than 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 5 years for 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 a:
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After 5 years, a new PCAPCAAssessment of the Property's physical condition and historical operation. is required unless 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. continues to qualify for ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. waiver delegation. A PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). may only receive a PCAPCAAssessment of the Property's physical condition and historical operation. waiver twice (i.e., 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 a 30-year term may obtain a PCAPCAAssessment of the Property's physical condition and historical operation. waiver after the 10th loan year and the 15th loan year, but a new PCAPCAAssessment of the Property's physical condition and historical operation. is required after the 20th loan year).
All PCAPCAAssessment of the Property's physical condition and historical operation. waivers must be documented in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , and any PCAPCAAssessment of the Property's physical condition and historical operation. waiver may be rescinded by Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at any time 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). condition warrants a new PCAPCAAssessment of the Property's physical condition and historical operation. .
2. Delivery and Payment of Property Condition Assessment
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any new PCAPCAAssessment of the Property's physical condition and historical operation. to Fannie Mae through 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. and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. . Subject to the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the cost of the PCAPCAAssessment of the Property's physical condition and historical operation. may be paid from funds in the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding was partially or fully waived at the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the condition 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). to ensure the BorrowerBorrowerPerson who is the obligor per the Note. preserves and maintains 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). as required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae determines that the BorrowerBorrowerPerson who is the obligor per the Note. is not properly preserving and maintaining 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to begin making monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with either the funding schedule set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or an alternative funding schedule determined by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. holds the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , none of the interest earned on the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds may be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Unless 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 in default, all interest must be:
- added to the balance of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; or
- paid to the BorrowerBorrowerPerson who is the obligor per the Note. if applicable law requires or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. agrees.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are available to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for costs incurred to replace capital items or maintain major items specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds also may be used for discretionary replacements of capital items or major maintenance items that are not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , but which the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines are intended to be covered by a Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, such as those that would:
- correct or forestall a problem that may adversely affect the physical condition, livability, marketability, or value 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). ;
- directly contribute to the maintenance or enhancement 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). physical condition, livability, marketability, or value; or
- likely be noted in an updated Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are used for purposes not originally contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor and adjust the monthly reserve deposits to ensure sufficient funds are available to make timely replacements of capital items or major maintenance items in the manner contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and/or the PCAPCAAssessment of the Property's physical condition and historical operation. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for any item specifically identified for reimbursement as a Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , or for any routine maintenance item, routine repair, or cosmetic repair that would normally be characterized as an operating expense. Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must never be used for P&IP&IPrincipal and interest , T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , or any other purpose not specifically permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
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1. General
The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specify the frequency, timing, and size of disbursements from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
2. Required Documentation
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition must be in writing and specify, at a minimum:
- the specific capital item replaced or major maintenance items for which reimbursement is being sought, and if any item is not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , an explanation of why the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds should be released for the item;
- the quantity and price of each type of capital item replaced (e.g., refrigerators);
- the quantity and price of all materials or parts (grouped by type or category) purchased; and
- the cost of all contracted labor or other services.
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition submitted to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the capital item replacements or major maintenance items covered by the requisition have been completed in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence;
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
3. Disbursement of Funds
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if all required documentation is received, and all applicable release conditions have been met, including, but not limited to:
- all capital item replacements or major maintenance items covered by the requisition have been completed in a good and workmanlike manner;
- all related invoices for capital items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for issuance of a joint check, made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the 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). owed funds;
- no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. must not exceed the actual cost of the capital item replacements or major maintenance items covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. requisition.
4. Maintenance of Servicing File
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.04K | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use its discretion in deciding whether to conduct an on-site inspection before approving any specific requisition for Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to perform an on-site inspection when a requisition is submitted, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect all capital item replacements or maintenance items covered by the requisition during its next scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection and confirm the satisfactory completion.
| 408.04L | |
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If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain:
- a reasonable fee to cover the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. routine costs of administering the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and
- additional fees to cover:
- reasonable inspection costs, including the fees of any qualified professional used by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- any other reasonable costs incurred in connection with collecting, holding, investing, or disbursing Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds but which are not adequately covered by the general administrative fees collected from the BorrowerBorrowerPerson who is the obligor per the Note. .
Subject to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. a reasonable fee for any special inspection services provided in connection with a Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. requisition; however, no fee may be charged if such inspection is made as part of a regularly scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds, including any interest, may not be used to cover fees due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless:
- the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specifically permits the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to pay ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection fees; or
- the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
| 408.04M | |
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1. Notification of Default to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in 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. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.
2. No Release of Funds to Borrower
No funds may be released to the BorrowerBorrowerPerson who is the obligor per the Note. while 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 in default.
No later than 30 days after 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 paid in full, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refund to the BorrowerBorrowerPerson who is the obligor per the Note. all remaining Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may amend existing the Schedule 5 to Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. - Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… on Fannie Mae’s behalf to match the alternative Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding available for newly originated 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. if the BorrowerBorrowerPerson who is the obligor per the Note. has a history of adequate property maintenance, and no other concerns are present (e.g., declining PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). condition, declining rents, declining 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…). The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment revising the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure 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 properly maintained on an ongoing basis. 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 being properly maintained, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reinstate monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. and the reimbursement requisition process.
| Section 409 | |
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| 409.01 | |
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An acceptable Interest Rate HedgeInterest Rate HedgeInterest 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. must be in place and maintained at all times for:
- variable rate Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ;
- Structured ARM Loans; and
- 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. where (i) the BorrowerBorrowerPerson who is the obligor per the Note. executed the Fannie Mae Interest Rate Cap Reserve and Security Agreement (Form 6442 series), or a similar agreement, allowing for a “springing” 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. under certain circumstances, and (ii) the requirement of the BorrowerBorrowerPerson who is the obligor per the Note. to acquire and pledge to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. an 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. has been triggered under the agreement.
The Interest Rate HedgeInterest Rate HedgeInterest 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. may be either an 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. or Interest Rate SwapInterest Rate SwapInterest 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. , although the prior approval of Fannie Mae is required before the BorrowerBorrowerPerson who is the obligor per the Note. may enter into an Interest Rate SwapInterest Rate SwapInterest 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. .
Each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. and its collateral assignment must meet the requirements of Part III, Chapter 11: Structured Adjustable Rate Mortgage (SARM) Loans.
Fannie Mae outside counsel must be engaged, at Borrower’sBorrower’sPerson who is the obligor per the Note. cost, to review the hedge bid package and documents, and prepare the amended Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for each hedge renewal. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a completed Counsel Designation Request for Interest Rate Hedge Transactions (Form 4625.A).
| 409.02 | |
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For 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. Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , the Interest Rate HedgeInterest Rate HedgeInterest 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. must:
- be in place whenever the variable rate mode is in effect; and
- comply with the requirements of the Reimbursement Agreement and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the 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. reserve and determine if the cost of a replacement 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. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must not adjust the reserve.
| 409.02B | |
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When required for a Structured Transaction, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the Interest Rate HedgeInterest Rate HedgeInterest 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. conforms to the applicable Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and/or the other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirements.
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the 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. reserve and determine if the cost of a replacement 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. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure that sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
may:
- opt to not adjust the reserve; or
- calculate and adjust the monthly escrow payments needed to purchase a replacement 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.
based on 115% of the cost of an 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.
with the term required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, provided:
- it is a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. 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. before January 1, 2023;
- the 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. escrow payments are recalculated at least every 6 months;
- it is not part of a Variable Rate Bond Credit Enhancement Transaction;
- it does not have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or a BorrowerBorrowerPerson who is the obligor per the Note. , 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. , or PrincipalPrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… on ACheckACheckLender due diligence performed for the Borrower, Key Principal, and Principal using the ACheckTM application. ; and
- no other Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. in your Fannie Mae portfolio with that SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may refund to the BorrowerBorrowerPerson who is the obligor per the Note. any amount left in the reserve account after purchasing the replacement 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. .
Every 6 months the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust the required 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. escrow amount based on 110% of the current cost of the replacement 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. .
| 409.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- monitor the term of each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. ;
- hold all escrowed funds for an Interest Rate HedgeInterest Rate HedgeInterest 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. in an account meeting the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. requirements of Part V, Chapter 3: Custodial Accounts;
- engage the BorrowerBorrowerPerson who is the obligor per the Note. prior to expiration of each Interest Rate HedgeInterest Rate HedgeInterest 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. to ensure that an acceptable replacement Interest Rate HedgeInterest Rate HedgeInterest 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. is in place prior to its expiration; and
- perform any required functions with respect to the Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. .
| 409.04 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain all UCCUCCUniform Commercial Code filings, and ensure that Fannie Mae’s LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. in the Interest Rate HedgeInterest Rate HedgeInterest 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. is maintained. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not direct the investment, application, or release of the collateral under any Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , without express written authorization from Fannie Mae.
| 409.05 | |
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| 409.05A | |
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Any payments by the 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. provider must be made to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and not to the BorrowerBorrowerPerson who is the obligor per the Note. . The disposition of funds depends on whether the BorrowerBorrowerPerson who is the obligor per the Note. is current 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. and Reimbursement Agreement payment obligations (principal or PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. deposit, as applicable, interest, any 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. escrow, and all other amounts then due) or any default exists under the Reimbursement Agreement or any other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If no default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the 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. provider’s payment to the BorrowerBorrowerPerson who is the obligor per the Note. . If a default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the 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. provider’s payment as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations, to be held in accordance with the applicable agreements, and notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. of the receipt of the payment.
If the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. or another third party is to receive any payments from the 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. provider, and the BorrowerBorrowerPerson who is the obligor per the Note. is not current on its payments or a default exists, then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- notify the payee of the facts; and
- instruct the third party to withhold the payment to the BorrowerBorrowerPerson who is the obligor per the Note. , and make payment to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be held as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations.
| 409.05B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Rate SwapInterest Rate SwapInterest 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. to ensure that all payments are made on a timely basis. All payments under an Interest Rate SwapInterest Rate SwapInterest 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. must be made directly to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , which will:
- remit the amount received from the BorrowerBorrowerPerson who is the obligor per the Note. to the Interest Rate SwapInterest Rate SwapInterest 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. provider; or
- remit the amount received from the Interest Rate SwapInterest Rate SwapInterest 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. provider to the BorrowerBorrowerPerson who is the obligor per the Note. , but only after the BorrowerBorrowerPerson who is the obligor per the Note. has made the required monthly P&IP&IPrincipal and interest payment 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. .
Payments due on the Interest Rate SwapInterest Rate SwapInterest 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. must match the payment dates 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. or the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , as applicable. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advance Interest Rate SwapInterest Rate SwapInterest 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. payments and Interest Rate SwapInterest Rate SwapInterest 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. credit enhancement fees that are not made by the BorrowerBorrowerPerson who is the obligor per the Note. or the Interest Rate SwapInterest Rate SwapInterest 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. provider, as applicable, on a timely basis. These payments and their duration will be treated as Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not required to advance any termination payment due on the Interest Rate SwapInterest Rate SwapInterest 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. .
| 409.06 | |
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Fannie Mae lists the credit agency rating requirements and the acceptable Interest Rate HedgeInterest Rate HedgeInterest 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. providers on Cap/Swap Counterparties for Multifamily Transactions. If the rating of a provider declines to a level where termination and replacement of the outstanding Interest Rate HedgesInterest Rate HedgesInterest 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. with that provider is required, Fannie Mae will notify the affected servicers and direct them to contact their BorrowersBorrowersPerson who is the obligor per the Note. and work with them to effect the termination and replacement. Failure to replace any Interest Rate HedgeInterest Rate HedgeInterest 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. provider whose rating no longer meets the rating requirements is a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the current Interest Rate HedgeInterest Rate HedgeInterest 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. expires before 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , at least 90 days before the Interest Rate HedgeInterest Rate HedgeInterest 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. terminates, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower'sBorrower'sPerson who is the obligor per the Note. written intention to:
- purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest 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. ; or
- convert the interest rate on a variable rate;
- Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. to a Bond Reset Interest Rate; or
- SARM Loan to a fixed rate.
If the BorrowerBorrowerPerson who is the obligor per the Note. elects to purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm that the possible Interest Rate HedgeInterest Rate HedgeInterest 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. providers are all on the current list of approved Cap/Swap Counterparties for Multifamily Transactions;
- review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the replacement Interest Rate HedgeInterest Rate HedgeInterest 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. timing requirements; and
- for a replacement 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.
, ensure the:
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement 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.
with a term equal to the lessor of the:
- remaining 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. term; or
- term specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- replacement Interest Rate Cap’sInterest Rate Cap’sInterest 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.
notional amount:
- equals 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. UPBUPBUnpaid Principal Balance when the replacement 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. becomes effective; and
- remains at that amount throughout the replacement Interest Rate Cap’sInterest Rate Cap’sInterest 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. term; and
- Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. of the replacement 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. is equal to or less than the Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement 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.
with a term equal to the lessor of the:
The BorrowerBorrowerPerson who is the obligor per the Note. may purchase a replacement 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. in advance if the replacement 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. becomes effective on the initial Interest Rate Cap’sInterest Rate Cap’sInterest 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
If the Interest Rate HedgeInterest Rate HedgeInterest 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. expires and the BorrowerBorrowerPerson who is the obligor per the Note. failed to provide evidence of securing the replacement Interest Rate HedgeInterest Rate HedgeInterest 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. immediately. Fannie Mae will instruct the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. action regarding the Borrower’sBorrower’sPerson who is the obligor per the Note. default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original replacement Interest Rate HedgeInterest Rate HedgeInterest 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. documents, including the Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , the Assignment of Hedge Interest or Supplemental Hedge Security Agreement, and UCCUCCUniform Commercial Code Financing Statements, and retain copies in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a copy of the new Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. through 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. , and provide the new Interest Rate HedgeInterest Rate HedgeInterest 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. information as follows:
- for Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. – upload Hedge Delivery Information (Form 4643) into CESIRCESIRCredit Enhancement Servicing and Investor Reporting System ;
- for all Interest Rate HedgesInterest Rate HedgesInterest 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. in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions – update hedge data in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. ; or
- for Structured ARM Loans (except in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions) – submit Form 4643 through 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. .
| Section 410 | |
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If the BorrowerBorrowerPerson who is the obligor per the Note. owns a LeaseholdLeaseholdProperty held under a long-term lease or Ground Lease. interest in 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- ensure that the BorrowerBorrowerPerson who is the obligor per the Note. complies with all provisions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. that relate to the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. ;
- if the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. payments are escrowed, collect monthly payments from the BorrowerBorrowerPerson who is the obligor per the Note. to ensure sufficient funds will be available to pay the ground rents and any special payments required by the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. ; and
- hold any escrowed ground rent payments with the Borrower’sBorrower’sPerson who is the obligor per the Note. other T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow funds in a T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. or a separate Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets all requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for any losses incurred by Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to make timely ground rent payments. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in 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. for any Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for protecting the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. priority of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , and must:
- take all reasonable actions to prevent the filing of any LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that would prime the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , in writing, upon learning of any such LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. filing, including a recommendation for resolving the situation; and
- submit a Non-Monetary Default Borrower Request in 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.
, if:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is aware of any material violation by the BorrowerBorrowerPerson who is the obligor per the Note. 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). manager of any applicable law, ordinance, regulation, or other legal requirement; or
- 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 in compliance with any applicable law, ordinance, regulation, or other legal requirement, including, without limitation, any relating to:
- Fair Housing Act;
- Americans with Disabilities Act;
- non-discrimination;
- environmental hazards;
- occupancy;
- zoning and land use;
- health, fire, and building codes relating to immediately hazardous conditions; and
- illegal use 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). .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also provide to Fannie Mae all information concerning any lawsuit, cause of action, or claim by any third party resulting from or relating to the violation.
| Section 412 | |
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Various federal and state statutes provide for the civil or criminal forfeiture of certain types of property, including real estate that is used, or intended to be used, to commit or facilitate the commission of certain violations of law.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not provide any information about the BorrowerBorrowerPerson who is the obligor per the Note. , 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. , 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). , 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. , or any PrincipalPrincipalPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… directly to any federal or state agency unless Fannie Mae specifically authorizes the release of the information. Following any contact from a federal or state official, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately contact Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. and Multifamily Special Asset ManagementMultifamily Special Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should describe in its communication the nature of the contact, the information requested, and any document or papers received by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with the contact. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must continue to service 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. .
| Section 413 | |
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| 413.01A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- ensure 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 continuously covered by property and liability insurance per Part II, Chapter 5: Property and Liability Insurance;
- ensure all renewal premiums are fully paid on time in:
- an annual lump sum; or
- installments;
- collect reserves for the premium allocation obtained from the insurance agent or broker ensuring sufficient reserve funds for the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
to pay the premium due for the applicable policy or policies in:
- an annual lump sum; or
- installments;
- pay the premiums for all required insurance when due; and
- ensure any BorrowerBorrowerPerson who is the obligor per the Note.
-financing of premiums complies with Part II, Chapter 5: Property and Liability Insurance, Section 501.01G: Payment of Premium, and either:
- the Modifications to Multifamily Loan and Security Agreement (Financing of Insurance Premiums) (Form 6272) was executed on the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- prior to the BorrowerBorrowerPerson who is the obligor per the Note. entering into a premium financing agreement, execute and submit through 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. an Amendment to the Multifamily Loan and Security Agreement, substantially in the form of the Modifications to Multifamily Loan Agreement (Financing of Insurance Premiums) (Form 6272).
If no insurance escrows are collected, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- obtain annual evidence that all policies were fully paid; and
- for BorrowerBorrowerPerson who is the obligor per the Note.
-financed premiums, retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
:
- receipts confirming timely payments; and
- a copy of the financing agreement.
| 413.01B | |
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For each policy renewal, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with the following timeline.
| Timeline | The Servicer must... |
|---|---|
| No later than 60 days before the policy expiration date | Contact the BorrowerBorrowerPerson who is the obligor per the Note. to request acceptable evidence of insurance per Part II, Chapter 5: Property and Liability Insurance, Section 501.01H: Evidence of Insurance. An original or duplicate original of each renewal policy must be obtained within 90 days after the policy renewal. |
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No later than 15 days after the earlier of:
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| No later than 60 days after notifying the Borrower of any noncompliant renewal policy | Resolve all non-compliant items with the BorrowerBorrowerPerson who is the obligor per the Note. and/or insurance agent (e.g., obtain a compliant renewal policy or endorsement, request a waiver, obtain force place coverage, etc.). |
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60 days after notifying the Borrower of noncompliant items, if the Servicer has not obtained either a:
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| 413.01C | |
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With each renewal, but at least annually, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- complete an insurance compliance checklist to review the adequacy of the Borrower’sBorrower’sPerson who is the obligor per the Note.
insurance coverage and ensure compliance with:
- Part II, Chapter 5: Property and Liability Insurance;
- all Fannie Mae-approved modifications; and
- the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- confirm the insurance carrier’s rating per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
the:
- checklist; and
- evidence of the insurance carrier’s rating.
For an unrated Risk Retention GroupRisk Retention GroupState-chartered insurance company created by the 1986 federal Liability Risk Retention Act, insuring commercial businesses and government entities against liability risks. or Captive InsurerCaptive InsurerInsurance company wholly owned and controlled by its insureds, whose primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also comply with Part II, Chapter 5: Property and Liability Insurance, Section 501.01D: Risk Retention Groups and Captive Insurance.
| 413.01D | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any insurance exception, including a delegated one, through 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. , with:
- a Multifamily Exception Request (Form 4638) for each exception signed by the authorizing person;
- a recommendation explaining why any non-delegated waiver request should be approved;
- all supporting documentation; and
- any previous exception not approved for the life of 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. , on an annual basis.
| 413.01E | |
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All property and liability insurance carriers for renewal policies must have the following ratings by A.M. Best Company:
- General Policyholder Rating of A- or better; and
- Financial Size Category of VII or better.
Rating requirements do not apply to policies issued:
- through State-sponsored insurance programs; or
- by insurers participating in NFIPNFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. .
Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to immediately obtain replacement coverage with a compliant carrier if the carrier is downgraded below B++ by A.M. Best Company.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor all flood map and community status changes, and take appropriate action when changes affecting 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. it services occur. When a 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 remapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to obtain flood insurance, regardless of whether the community is “participating” in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. .
The flood insurance must:
- comply with Part II, Chapter 5: Property and Liability Insurance, Section 502.03: Flood Insurance, including the minimum mandatory purchase requirements; and
- be in place within 45 days after the date the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was notified of the remapping.
If the BorrowerBorrowerPerson who is the obligor per the Note. refuses to obtain the required coverage or pay a disputed premium, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the required coverage. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily InsuranceMultifamily InsuranceTeam that can be contacted at [email protected]. if:
- a 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 mapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. ;
- the community in which 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 located does not participate in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. ; and
- the BorrowerBorrowerPerson who is the obligor per the Note. cannot obtain the required flood insurance.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- complete the most recent version of the Standard Flood Hazard Determination Form issued by FEMAFEMAFederal Emergency Management Agency ;
- include in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
a:
- copy of the form; and
- signed copy of Notice to Borrower of Special Flood Hazard and Federal Assistance; and
- require the determination firm, and any monitoring company, to notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. whenever a flood zone change occurs.
To remove a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). /building from an SFHASFHASpecial Flood Hazard Area designated by FEMA. , only an updated FEMA Standard Flood Hazard Determination Form (SFHDF) based on the following is acceptable:
- Letter of Map Amendment (LoMA);
- Letter of Map Revision (LoMR); or
- Letter of Determination Review (LoDR).
| 413.04 | |
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| 413.04A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately:
- obtain the required property and liability insurance, at the Borrower’sBorrower’sPerson who is the obligor per the Note.
expense, if:
- the BorrowerBorrowerPerson who is the obligor per the Note. fails to obtain acceptable insurance coverage; or
- per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the carrier is downgraded below the required ratings per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- notify Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. obtains the required property and liability insurance.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- have force place vendor, retroactive, and/or automatic coverage 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.
serviced with:
- deductibles no greater than those required per Part II, Chapter 5: Property and Liability Insurance;
- coverage provided by carriers complying with Part II, Chapter 5: Property and Liability Insurance;
- provide notice when coverage is force placed, including disclosing the coverage amount and deductibles; and
- adjust the T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. balance when the BorrowerBorrowerPerson who is the obligor per the Note. pays the force place insurance premiums.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is permitted to collect from the BorrowerBorrowerPerson who is the obligor per the Note. any reasonable out-of-pocket costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to obtain insurance coverage for 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). .
| Section 414 | |
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| 414.01 | |
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In the event of a casualty loss of $75,000 or more, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through 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. a:
- Report of Multifamily Hazard Insurance Loss (Form 178):
- within 30 days if no serious injury or death occurred; or
- within 10 days if serious injury or death occurred; and
- final Form 178 indicating that 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 fully restored, and document its Servicing FileServicing FileYour file for each Mortgage Loan serviced. when 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 fully restored.
A revised Form 178 must be submitted if any of the information on the form changes for any casualty loss greater than the lesser of (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance .
| 414.02 | |
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For any casualty loss covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. insurance policy, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the BorrowerBorrowerPerson who is the obligor per the Note. timely files a proof of loss with the insurance carrier, and effects a prompt and reasonable adjustment of the loss. If the BorrowerBorrowerPerson who is the obligor per the Note. fails to timely file a proof of loss with the insurance carrier, or take requisite actions to effect a prompt adjustment of the loss claim, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must independently contact the insurance carrier to adjust the loss claim.
| 414.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must assess the extent and impact of any damage caused by a casualty, and ensure that the BorrowerBorrowerPerson who is the obligor per the Note. appropriately addresses the damage.
Within 45 days after learning of a casualty loss, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document its Servicing FileServicing FileYour file for each Mortgage Loan serviced. with the results of its casualty loss assessment. At a minimum, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must include:
- when the casualty loss occurred and when the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was first informed of the casualty loss;
- the scope of the damage and its effect 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). (e.g., impact on the habitability of the buildings, safety of the residents, serious injury or loss of life, project occupancy, and project income and expenses);
- the Borrower’sBorrower’sPerson who is the obligor per the Note. plan of action for securing and restoring the damaged portion 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 status of the Borrower’sBorrower’sPerson who is the obligor per the Note. efforts to implement the plan, including the specific steps to be taken (e.g., temporarily relocating tenants, preparing plans and specifications, awarding contracts, and commencing repair work);
- whether any environmental problems are associated with the damage, and if so, how they will be addressed;
- the projected cost to repair and restore the damaged ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). , including any available information on contractors’ bids or awards;
- whether the casualty loss is covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. insurance policy, the status of any insurance claim, and an estimate of the amount and timing of the funds to be received from the insurance carrier;
- the estimated amount of additional funds that the BorrowerBorrowerPerson who is the obligor per the Note. will have to provide from its own resources to complete all necessary repair and restoration work, and the current availability of such funds; and
- any other relevant information pertaining to the loss event that is known to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and could have a material bearing on Fannie Mae’s interests.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect 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). , take photographs of the damage, and complete a Multifamily Catastrophic Loss Inspection (Form 4261) if:
- the casualty loss is expected to exceed the lesser of (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance of 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. as of the date of the casualty; or
- any of the following conditions exists:
- a default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the combination of insurance proceeds and BorrowerBorrowerPerson who is the obligor per the Note. funds is insufficient to complete the necessary PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). repairs for restoration to a condition fit for human habitation and meeting all applicable permitting requirements;
- prior to the commencement of any restoration work, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that, upon completion of the repair and restoration work, 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). will not be capable of generating sufficient income to cover all operating expenses, required Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, P&IP&IPrincipal and interest 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. , and required payments on any subordinate debt secured by 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). , or will not otherwise meet a 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 Pay Preferred Equity payments. or other test required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; or
- the repair and restoration work will not be completed by the earlier of (i) the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , or (ii) within 1 year from the date of the casualty.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of the inspection unless expressly prohibited by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
An inspection by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is optional if the casualty loss is expected to be less than (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance , and none of the above conditions exist. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to inspect 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm during the next PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection, and document in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. , that the repair and restoration work was satisfactorily completed. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the repair or restoration work was not satisfactorily completed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily InspectionsMultifamily InspectionsTeam that can be contacted at [email protected]. and Multifamily Loss MitigationMultifamily Loss MitigationTeam that can be contacted at [email protected]. ) in writing, as required by Part V, Chapter 5: Surveillance.
After inspecting 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. a copy of the completed Catastrophic Loss Inspection (Form 4261), and photographs of the damaged portions 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
- submit a copy of the Catastrophic Loss Inspection (Form 4261) and the photographs through 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. within 7 days after completing the Catastrophic Loss Inspection (Form 4261).
Any insurance loss draft or check issued by the insurance carrier must be made payable to Fannie Mae in care of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or as otherwise required by the mortgagee clause. Provided the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. contains nothing to the contrary, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to endorse any insurance loss draft or check on Fannie Mae’s behalf, as follows:
Fannie Mae
By: [Name of Servicer]
By: [Name of Servicer’s Authorized Signer]
[Title of Servicer’s Authorized Signer].
If any insurance loss draft or check made payable to Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is cashed by the BorrowerBorrowerPerson who is the obligor per the Note. without proper endorsement by Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must instruct the BorrowerBorrowerPerson who is the obligor per the Note. to send the funds to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. within 5 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. . If the BorrowerBorrowerPerson who is the obligor per the Note. does not send the funds, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. immediately.
If the insurance loss draft or check is payable to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is authorized to endorse the draft or check and apply the proceeds in accordance with this Section. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also send the Insurer an Insurance Loss Payee Notice Letter (Form 4803) so that all future insurance loss drafts and checks will be issued to Fannie Mae in care of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a copy of the Insurance Loss Payee Notice Letter (Form 4803) in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
If the insurance loss draft or check is not made payable to either Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must return it to the insurance carrier and request the loss draft or check be reissued in the name of Fannie Mae and sent to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . If the check has already been cashed by the BorrowerBorrowerPerson who is the obligor per the Note. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must demand those funds be either paid by the BorrowerBorrowerPerson who is the obligor per the Note. to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and/or deposited in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. meeting the requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to confirm no contrary requirements exist regarding the application of insurance loss proceeds (e.g., where the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the noteholder to “reasonably” approve the application of insurance proceeds, where the noteholder is to apply commercially reasonable standards, or where the noteholder has the power to approve in its sole discretion).
If any of the following conditions exist, Fannie Mae will determine, in its sole discretion, whether to require the insurance loss proceeds to be (i) applied to the UPBUPBUnpaid Principal Balance , or (ii) used to repair and restore 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). :
- a default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the combination of insurance proceeds and BorrowerBorrowerPerson who is the obligor per the Note. funds is insufficient to complete the necessary PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). repairs for restoration to a condition fit for human habitation and meeting all applicable permitting requirements;
- prior to the commencement of any restoration work, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that, upon completion of the repair and restoration work, 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). will not be capable of generating sufficient income to cover all operating expenses, required Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, P&IP&IPrincipal and interest 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. , and required payments on any subordinate debt secured by 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). , or will otherwise meet a 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 Pay Preferred Equity payments. or other test required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; or
- the repair and restoration work will not be completed by the earlier of (i) the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , or (ii) within 1 year from the date of the casualty loss.
Based upon the Borrower’sBorrower’sPerson who is the obligor per the Note. plan of action and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. overall assessment, and provided none of the conditions listed in Part V, Chapter 4: Asset Management: Loan Document Administration, Section 414.04: Required Casualty Loss Property Inspection exist, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has the authority to:
- hold the proceeds to incrementally reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of repairing the damage and restoring 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). to habitable condition; or
- recommend to Fannie Mae that the proceeds be applied to the UPBUPBUnpaid Principal Balance of 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. by submitting a request through 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. .
All insurance loss proceeds will be held to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. in increments for the cost of repairing the damage and restoring 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). . 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). will be restored to habitable condition, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- deposit all insurance loss proceeds in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. meeting the requirements of Part V, Chapter 3: Custodial Accounts, to incrementally reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of repairing the damage;
- require the BorrowerBorrowerPerson who is the obligor per the Note. to deposit, in the same Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , funds equal to the difference between (a) the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. estimate of the total cost to repair and restore 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). to its pre-casualty condition, and (b) the amount of the insurance proceeds;
- for losses greater than $75,000, prepare and have the BorrowerBorrowerPerson who is the obligor per the Note. execute the applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) for use with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. if documented before the June 2019 Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. publication, or Insurance Loss Proceeds Collateral Agreement (Form 6639) for use with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , specifying the terms and conditions under which the funds held in the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. will be released to the BorrowerBorrowerPerson who is the obligor per the Note. (Form 6615) is not required 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. with Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. documented after the June 2019 Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. publication); and
- submit a copy of any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639) through 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the above requirement that the BorrowerBorrowerPerson who is the obligor per the Note. deposit additional funds into the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. if (i) the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. deposits all insurance loss proceeds into the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , and (ii) determines that the BorrowerBorrowerPerson who is the obligor per the Note. , Key PrincipalsKey PrincipalsPerson 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. , and PrincipalsPrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… have sufficient funds to repair and restore 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). when the insurance loss proceeds alone are insufficient.
Within 7 days of execution, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through 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. copies of:
- any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639);
- any Report of Multifamily Hazard Insurance Loss (Form 178); and
- if required and completed, a copy of the Multifamily Catastrophic Loss Inspection (Form 4261).
The Multifamily Catastrophic Loss Inspection (Form 4261) must be submitted through 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. within 7 days after the later of:
- the execution of any Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639); or
- the completion of the Multifamily Catastrophic Loss Inspection (Form 4261).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original executed copy of any Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639), and retain in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. the original:
Before the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. disburses any funds to the BorrowerBorrowerPerson who is the obligor per the Note. for repair or restoration work the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- have any applicable executed Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639);
- have on deposit in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. all insurance loss proceeds and, unless waived as provided above, sufficient BorrowerBorrowerPerson who is the obligor per the Note. funds to cover the estimated cost to complete the repair and restoration work;
- except in the case of minor casualties, have copies of all applicable building permits and other permits/authorizations required to carry out the repair and restoration work;
- except in the case of minor casualties, review (or have a qualified professional review) and approve any plans and specifications relating to the repair and restoration work;
- obtain from the BorrowerBorrowerPerson who is the obligor per the Note. the identities of each principal contractor, architect, and engineer who will be involved in the repair and restoration work, and be satisfied with their qualifications (including assurance each is appropriately licensed and bonded); and
- obtain evidence of builder’s risk insurance, if required, in accordance with Part II, Chapter 5: Property and Liability Insurance, Section 501.02G: Builder’s Risk Insurance.
Any emergency work required to protect 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). or correct a condition threatening the health or safety of the tenants must be undertaken immediately by the BorrowerBorrowerPerson who is the obligor per the Note. , even if the forgoing requirements have not been complied with.
| 414.12 | |
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Before disbursing funds, including the final disbursement, to the BorrowerBorrowerPerson who is the obligor per the Note. for each disbursement request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be satisfied that:
- all repair and restoration work has been completed in a good and workmanlike manner and in accordance with any applicable plans and specifications, as evidenced by submissions from the BorrowerBorrowerPerson who is the obligor per the Note. and, if applicable, by the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or a qualified professional’s inspection of the completed work;
- all related invoices for items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable pre-conditions of the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639) for issuance of a joint check made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the 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). owed funds;
- the necessary release of LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. or LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. waivers have been submitted by all contractors, and no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must approve and disburse funds related to each BorrowerBorrowerPerson who is the obligor per the Note. request in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639). Funds must be disbursed no more frequently than once a month, unless:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that more frequent disbursements of funds are appropriate and can be managed effectively; or
- the disbursement is equal to or greater than $10,000, or is the final disbursement of proceeds.
| 414.12C | |
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Each of the Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be in writing and must specify, at a minimum:
- the specific repair and restoration work for which reimbursement is being sought;
- the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased; and
- the cost of all contracted labor or other services.
The Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the repair and restoration work was completed in a good and workmanlike manner, in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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). ;
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence; and
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12D | |
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The amount of each disbursement (other than the final disbursement) may not exceed the lesser of:
(i) an amount equal to:
- the actual cost of the repair and restoration work covered by the disbursement request, or, if the work was done under a contract or subcontract pursuant to which other work remains to be done, an amount equal to 90% of the actual cost of the repair and restoration work covered by the disbursement request (i.e., a 10% holdback is required if the work under the applicable contract or subcontract has not been completed in full); plus
- 100% of the cost of any materials used, or to be used, in connection with the repair and restoration work, if at the time of the disbursement request, title to the materials has passed to the BorrowerBorrowerPerson who is the obligor per the Note. and the materials have been installed, or are being properly stored, 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). ; or
(ii) an amount equal to the difference between:
- the balance of the Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. at the time of the disbursement request; and
- the estimated cost of all remaining repair and restoration work at that time of the disbursement request.
Upon satisfactory completion of all required repair and restoration work, and satisfaction of all other applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- disburse all remaining funds to the BorrowerBorrowerPerson who is the obligor per the Note. ; and
- submit through 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. a final Report of Multifamily Hazard Insurance Loss (Form 178) to indicate that all work was satisfactorily completed.
| 414.12F | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all actions taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. disbursement request are appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. immediately if the BorrowerBorrowerPerson who is the obligor per the Note. fails to:
- proceed diligently with any necessary repair and restoration work;
- perform the work satisfactorily; or
- perform in accordance with the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. notice to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. must include a description of any steps that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is taking to resolve the situation.
If the insurance loss proceeds include funds specifically designated to defray administrative costs incurred by the mortgagee in connection with the casualty loss, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may reimburse itself from this designated amount for its actual, reasonable administrative costs. If no such provision is made by the insurer, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not seek reimbursement for its administrative costs from the proceeds, nor may the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. seek reimbursement separately from the BorrowerBorrowerPerson who is the obligor per the Note. .
| Section 415 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Special Asset ManagementMultifamily Special Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. before performing a casualty loss assessment on a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). securing a Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan with an uncured default. . Fannie Mae will determine whether the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should proceed with the assessment, and direct the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. accordingly. Any activity or action plans to repair or restore 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). must be approved by Fannie Mae. All insurance loss drafts and checks must be forwarded to Fannie Mae for endorsement and disposition.
| Section 416 | |
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| 416.01 | |
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Each Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transaction is different, therefore the requirements in this Section may not apply to every transaction. For specific requirements, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the applicable:
- Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. ;
- Bulk Delivery Agreement; and
- other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| 416.02 | |
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Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. requests are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as follows.
Decisions and actions that are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. generally per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 402.01: Delegation of Decision-Making Authority, are also not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. in a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. or Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. . Additionally, decisions and actions are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. if the request involves:
- amendments or changes to the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility.
, Bulk Delivery Agreement, or equivalent agreement, except for the Fannie Mae standard form Amendment for:
- Completion/Repair extensions; and
- changes to the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits;
- a Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. substitution; or
- a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be
cross-defaulted, and
cross-collateralized.
:
- collateral release or substitution;
- future advance and conversion;
- revaluation and determination of the Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. ;
- Interest Rate HedgeInterest Rate HedgeInterest 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. renewal or modification;
- DefeasanceDefeasanceTransaction where a Property is released from the lien of the Security Instrument and the Lender receives a valid and perfected lien and security interest in substitute collateral acceptable to Fannie Mae and the cash flows thereunder. ;
- payoff/termination;
- Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. or operating lease modification;
- Transfer/AssumptionTransfer/AssumptionTransaction changing the ownership of the Borrower or Property. ;
- 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 or operator change;
- re-underwriting assessment; or
- Springing Debt Service ReserveSpringing Debt Service ReserveSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. .
Decisions and actions covered by the Delegated Transaction FormsDelegated Transaction FormsMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. (Form 4636 series) are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. per the applicable Form 4636 series. For these requests, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the completed Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. (Form 4636 series) through 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. .
| 416.02C | |
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Decisions and actions delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. generally perPart V, Chapter 4: Asset Management: Loan Document Administration, Section 402.01: Delegation of Decision-Making Authority are also delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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. in a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. or a Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. . Additionally, decisions and actions not covered by the Delegated Transaction FormsDelegated Transaction FormsMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. (Form 4636 series) are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. per this Chapter for:
- Bulk Delivery Additions, Releases, and Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. ;
- Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreements (Form 6639);
- endorsing insurance checks;
- extensions to complete Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
- changes to the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits; and
- administering:
- escrow accounts; and
- Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is unsure if a decision is delegated, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. before proceeding.
| 416.03 | |
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If Fannie Mae approval is required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a request through DUS GatewayDUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. or 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. and include:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation;
- any supporting documentation (including references to the relevant sections of the governing documents); and
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis supporting its recommendation.
If permitted by the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , BorrowersBorrowersPerson who is the obligor per the Note. may be allowed to release or substitute collateral. These requests must follow the provisions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and approval is not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
The BorrowerBorrowerPerson who is the obligor per the Note. must initiate the release/substitution process by submitting a written request to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Upon receipt, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a release/substitution request package through 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. that includes:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. summary of the Borrower'sBorrower'sPerson who is the obligor per the Note. release/substitution request, and its recommendation regarding approval of the requested release/substitution;
- any waiver requests and the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation for approval of each waiver;
- when the BorrowerBorrowerPerson who is the obligor per the Note. expects the release/substitution to close;
- whether 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). meets all conditions and compliance tests (e.g., LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. , 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 Pay Preferred Equity payments. , UPBUPBUnpaid Principal Balance , geographic/asset concentration) per the applicable Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the release price and calculations (per the terms of the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. );
- the Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. of 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). after the release;
- the amount of the release/substitution fees to be collected;
- whether a prepayment or advance of funds will occur;
- the Structured Facilities Monitoring Spreadsheet (Form 4802) showing 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. level and collateral level data for the Structured Transaction both before and after the release/substitution occurs;
- third-party reports; and
- any other items required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. or cash collateral is required for the request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enter the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. or cash collateral information in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. . Any Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must comply with Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit, and original Letters of CreditLetters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must be sent to Multifamily Structured AcquisitionsMultifamily Structured AcquisitionsTeam that can be contacted at [email protected]. .
If the request is approved, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- submit its payoff calculations to Multifamily Structured AcquisitionsMultifamily Structured AcquisitionsTeam that can be contacted at [email protected]. ;
- release the collateral from the MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. system; and
- if necessary, release, update, and verify any associated interest rate hedges in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. .
If permitted by the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the BorrowerBorrowerPerson who is the obligor per the Note. may be allowed to:
- obtain a future advance (addition, borrow up, substitution advance, or tranche refinance); or
- convert 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. from variable to fixed rate.
The BorrowerBorrowerPerson who is the obligor per the Note. must initiate the process by submitting a written request to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Upon receipt, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a request package through DUS GatewayDUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. including:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. summary of the Borrower’sBorrower’sPerson who is the obligor per the Note. request and its recommendation for approval;
- any waiver requests and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation for approval of each waiver;
- the amount of the transaction and the supporting underwriting spreadsheets and calculations (per the terms of the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. );
- when the BorrowerBorrowerPerson who is the obligor per the Note. expects the transaction to close;
- whether 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). meets all conditions and compliance tests (e.g., LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. , 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 Pay Preferred Equity payments. , UPBUPBUnpaid Principal Balance , geographic/asset concentration) per the applicable Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- a quote sheet;
- any applicable Sources and Uses statement;
- any applicable Interest Rate HedgeInterest Rate HedgeInterest 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. requirements;
- the Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. of 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). after the transaction;
- itemized fees associated with the transaction;
- the Structured Facilities Monitoring Spreadsheet (Form 4802) showing 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. level and collateral level data for the Structured Transaction both before and after the transaction occurs;
- any applicable third-party reports; and
- any other items required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The BorrowerBorrowerPerson who is the obligor per the Note. may obtain additions, substitutions, and releases if permitted per:
- the Bulk Delivery AgreementBulk Delivery AgreementAgreement evidencing the terms and conditions of a Bulk Delivery. ;
- the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- Part III, Chapter 16: Structured Transactions.
| 416.07 | |
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Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. revaluations may occur per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. .
The LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. must retain an AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. to obtain a Capitalization Rate DerivationCapitalization Rate DerivationIndependent determination of the appropriate capitalization rate for a specific Property. per Section 106 of the Instructions for Appraisers (Form 4827) if:
- the PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). are being revalued with the intent to fund a new 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. ; or
- no new 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 being funded, but:
- the previous valuation is more than 3 years old;
- the Lender'sLender'sPerson Fannie Mae approved to sell or service Mortgage Loans. recommended capitalization rate is more than 50 bps less than the previously approved cap rate; or
- required by Fannie Mae.
After Fannie Mae notifies the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of the final capitalization rate determination and valuation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- promptly notify the BorrowerBorrowerPerson who is the obligor per the Note.
of the:
- revised capitalization rates;
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). values;
- Allocable Facility AmountsAllocable Facility AmountsFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. ;
- LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. ; and
- any failure to meet compliance tests, if applicable; and
- retain a copy of the BorrowerBorrowerPerson who is the obligor per the Note. notification in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For any required Capitalization Rate DerivationCapitalization Rate DerivationIndependent determination of the appropriate capitalization rate for a specific Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- comply with Part II, Chapter 2: Valuation and Income, Section 202.02A: Appraiser Selection; and
- ensure the Capitalization Rate DerivationCapitalization Rate DerivationIndependent determination of the appropriate capitalization rate for a specific Property.
:
- includes:
- a capitalization rate derivation;
- market analysis;
- sales comparables; and
- an analysis of property-specific characteristics;
- describes capitalization rate pressures;
- evaluates factors applying upward or downward pressure on capitalization rates, including:
- market volatility;
- investor demand;
- property supply; and
- rental growth projections;
- is signed by the AppraiserAppraiserPerson engaged to estimate a Property’s market value per USPAP. ;
- includes the Appraiser'sAppraiser'sPerson engaged to estimate a Property’s market value per USPAP. qualifications; and
- is 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.
- includes:
Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. on PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). within a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. are not permitted unless expressly authorized under the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. before underwriting a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. .
All Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. must submit Quarterly Monitoring Reports through DUSDUSDelegated Underwriting and Servicing 360 per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations.
A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. with a Springing Debt Service ReserveSpringing Debt Service ReserveSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. provision in the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. :
- is subject to additional quarterly monitoring in Section 416.10C; and
- may require a re-underwriting assessment.
When required per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must determine the Monitored Debt Service Coverage RatioDebt Service Coverage RatioOn 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 Pay Preferred Equity payments. on an aggregate basis for all 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. in the Collateral Pool, calculated as:
- the total for all PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the
fee simple or Leasehold interest,
Improvements, and
personal property (per the Uniform Commercial Code).
of:
- trailing 3-month annualized net rental income; plus
- trailing 3-month annualized other allowable income, if any; minus
- trailing 12-month operating expenses; minus
- annual Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ;
- divided by the annual Actual Pay Debt Service Amounts for all 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. .
A Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. re-underwriting assessment is required if:
- the Monitored 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 Pay Preferred Equity payments. is below 1.10; or
- any other Trigger EventTrigger EventPer the Master Credit Facility Agreement, a defined event that gives the right to fully re-underwrite the Credit Facility per the Underwriting and Servicing Requirements. exists per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. .
| 416.10E | |
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For any Trigger EventTrigger EventPer the Master Credit Facility Agreement, a defined event that gives the right to fully re-underwrite the Credit Facility per the Underwriting and Servicing Requirements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- immediately notify:
- Fannie Mae in writing at:
- Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. ; and
- [email protected]; and
- the BorrowerBorrowerPerson who is the obligor per the Note. that all items required for re-underwriting per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. are due within 10 days;
- Fannie Mae in writing at:
- facilitate a meeting between the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , Fannie Mae, and BorrowerBorrowerPerson who is the obligor per the Note. ;
- per the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility.
, the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, and the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise.
:
- conduct the re-underwriting assessment; and
- remit the underwriting assessment results and supporting documents in 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. per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 416.10F: Re-Underwriting Assessment Timing;
- retain copies of:
- the re-underwriting assessment; and
- all supporting documents in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
- submit a Non-Monetary Default Borrower Request in 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. if the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide any required documents.
Initial re-underwriting assessments occur as follows:
| For a Credit Facility with... | Timing |
|---|---|
| Monitored DSCR below 1.10 | 45 days after Quarterly Monitoring forms are due per Part V, Chapter 5: Surveillance, Section 503.02: Quarterly Financial Analysis of Operations. |
| Any other Trigger Event | 45 days after the event. |
If a Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. includes a Springing Debt Service ReserveSpringing Debt Service ReserveSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. provision, the BorrowerBorrowerPerson who is the obligor per the Note. may be required to fund a Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. .
Fannie Mae will:
- review all re-underwriting assessments and supporting documents; and
- notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of the following additional requirements.
| For a Credit Facility... | Requirements |
|---|---|
| Without an existing Debt Service Reserve Account |
|
| With an existing Debt Service Reserve Account |
|
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- notify the BorrowerBorrowerPerson who is the obligor per the Note. immediately of any Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. funding requirements;
- ensure the BorrowerBorrowerPerson who is the obligor per the Note. funds any Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. within 30 days;
- confirm all Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger.
deposits and notify Fannie Mae in writing at:
- Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. ; and
- [email protected];
- submit a BorrowerBorrowerPerson who is the obligor per the Note. Request in 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 obtain Fannie Mae approval before releasing any Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. funds;
- notify the BorrowerBorrowerPerson who is the obligor per the Note. that re-underwriting assessment requirements supersede all activities in Part V, Chapter 5: Surveillance, Section 503: Financial Analysis of Operations; and
- submit a Monetary Default Borrower Request in 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. if the BorrowerBorrowerPerson who is the obligor per the Note. fails to meet any Debt Service Reserve AccountDebt Service Reserve AccountSpringing Debt Service Reserve per the Master Credit Facility Agreement that a Borrower may be required to fund in the event of a Springing Trigger. funding obligations.
| 416.12 | |
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For any issue not covered in this Section, or if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. requires a more detailed explanation, contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. .
| Section 417 | |
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| 417.01 | |
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The requirements in this Section may not apply to every Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. 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. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for specific requirements.
Decisions and actions covered by the Delegated Transaction Form (Form 4636 series) are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as set forth in the applicable Form 4636 series or the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. . For these requests, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the completed applicable Form 4636 series through 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. . Decisions and actions for Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. 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. regarding the following are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. :
- Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. expansions/conversions, including constructing additional units, substantial alterations, Seniors Housing Major RenovationsSeniors Housing Major RenovationsPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. , and Seniors Housing Minor RenovationsSeniors Housing Minor RenovationsPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…;
- changes in the Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. operator;
- changes in 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 or management agreements;
- changes in licensing (Note: All licensing changes require an Opinion of Borrower’s Counsel on Origination of Mortgage Loan (Seniors Housing Licensing) (Form 6450.SRS) confirming that all licensing requirements have been met);
- Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. operator LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. ; and
- master leases.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has any questions regarding the need for Fannie Mae approval, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Seniors Housing Property Asset ManagementMultifamily Seniors Housing Property Asset ManagementTeam that can be contacted at [email protected]. before proceeding.
| 417.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and this Section to determine whether Fannie Mae approval is required for a particular request. If Fannie Mae approval is required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a request through 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. . Any approval request must include the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation, any supporting documentation (including references to the relevant sections of the governing documents), and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis supporting its recommendation.
Unless expressly permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , requests by the BorrowerBorrowerPerson who is the obligor per the Note. for the construction of additional units, renovation, or expansion of a Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. , or a change in the overall percentage of one Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. type of unit (e.g., Independent LivingIndependent LivingSeniors Housing providing limited programs of assistance for domestic activities (e.g. meals, housekeeping, activities, transportation, etc.), and typically resembles market rate units. , Assisted LivingAssisted LivingSeniors Housing Property offering services limited to non-medical personal care, including ADL assistance, which are typically licensed and regulated by a state or local governmental authority. , or Alzheimer’s/Dementia CareAlzheimer’s/Dementia CareSeniors Housing Property with units and beds for residents with significant cognitive impairment resulting from Alzheimer’s disease or other dementia, which are typically licensed and regulated by a state or local government authority. ) into another are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The BorrowerBorrowerPerson who is the obligor per the Note. must request approval from the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae before proceeding, and Fannie Mae will consider these requests under the following parameters, conditions, and requirements:
| 417.04A | |
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To allow for the construction of additional units on existing land, or the renovation and/or repositioning of existing units:
- a “Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. ” is any physical improvement costing in excess of (i) $20,000/unit, or (ii) $3 million in total project costs; and
- a “Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…” is any physical improvement that is not a Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. , but which increases the number of units, or converts one type of unit into another, unless expressly permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| 417.04B | |
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Upon receipt of a Borrower Seniors Housing Expansion/Conversion Request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a written request through 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. , and include the following:
- SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). name and experience in operating seniors housing properties;
- 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. performance;
- financial performance (including NCFNCFOn 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… and UPBUPBUnpaid Principal Balance history, and 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 Pay Preferred Equity payments. and LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Pay Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage. trends);
- pro forma financial statements;
- sources/uses of funds statement;
- project budget, scope, and plans;
- market study;
- construction contract and timeline;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. monitoring plan;
- licensure issues;
- insurance; and
- general contractor and major subcontractors.
Fannie Mae will review the completed request, and approve or decline the request in its sole discretion.
| 417.04C | |
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For a Seniors Housing Expansion/Conversion Request approved by Fannie Mae, the following requirements will apply:
- Escrow:
- the BorrowerBorrowerPerson who is the obligor per the Note. must escrow 25% of the estimated construction costs with the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , who will administer the funds through a standard construction draw process; and
- the BorrowerBorrowerPerson who is the obligor per the Note. must demonstrate to the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. satisfaction that it has sufficient liquid assets to complete the construction;
- Minimum 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 Pay Preferred Equity payments. during the expansion/conversion period cannot fall below 1.15x;
- Completion of construction must occur no later than 18 months from the date of commencement;
- Construction monitoring requirements will be set forth in the approval letter;
- Fannie Mae will charge a construction monitoring fee which does not cover the expenses associated with third-party inspections;
- Completion Guaranty (Form 6018, Form 6632, or Form 6633) and, if determined applicable by Fannie Mae, an Agreement and Assignment Regarding General Contractor’s Contract (Form 6473), and an Omnibus Assignment of Contracts, Plans, Permits, and Approvals (Form 6473), will be required;
- Fannie Mae will charge a change in use fee, and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge additional fees at its discretion, subject to approval by Fannie Mae;
- The BorrowerBorrowerPerson who is the obligor per the Note. must reimburse all legal costs incurred by Fannie Mae; and
- A fixed-price general construction contract provided by a general contractor, together with a payment and performance bond issued by an acceptable surety, will be required.
Within 60 days of completing any Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. or Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…, the BorrowerBorrowerPerson who is the obligor per the Note. must deliver to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide to Fannie Mae, the following:
- title endorsement to the existing mortgagee title policy, confirming that no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist that have not been acceptably bonded over;
- final lien waivers from all contractors, architects, subcontractors, and material suppliers;
- copies of updated or newly issued certificates of occupancy;
- renewed licenses;
- confirmation in the form of an Opinion of Borrower’s Counsel on Origination of Mortgage Loan (Seniors Housing Licensing) (Form 6450.SRS) that all licensing requirements have been met;
- certificate from the BorrowerBorrowerPerson who is the obligor per the Note.
, architect, and contractor certifying to the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
, for the benefit of Fannie Mae, that the improvements:
- are completed in accordance with the plans and specifications approved by Fannie Mae; and
- meet the local zoning and planning restrictions, and all other governmental requirements;
- final inspection of completed ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). ;
- updated certified operating statement and rent roll for the Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. ; and
- a survey showing any new ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). on the Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. .
Within 60 days of completion of any Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. or Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request any applicable change in unit count and/or unit mix (ILILSeniors Housing providing limited programs of assistance for domestic activities (e.g. meals, housekeeping, activities, transportation, etc.), and typically resembles market rate units. , ALALSeniors Housing Property offering services limited to non-medical personal care, including ADL assistance, which are typically licensed and regulated by a state or local governmental authority. , ALZALZSeniors Housing Property with units and beds for residents with significant cognitive impairment resulting from Alzheimer’s disease or other dementia, which are typically licensed and regulated by a state or local government authority. ) in 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. resulting from the renovation.
For any Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. where Fannie Mae is providing credit enhancement for tax-exempt multifamily housing BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , the BorrowerBorrowerPerson who is the obligor per the Note. must provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a copy of the compliance monitoring statement required under the Bond Documents. If the Borrower’sBorrower’sPerson who is the obligor per the Note. statement reflects noncompliance with the low- and moderate-income tenant occupancy requirements set forth in the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower…, or if the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide the statement to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , and retain the compliance monitoring statement in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Reserve Requirement, if any, under the Bond Trust Indenture with respect to each Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the rating of the institution in which the accounts under any Cash Management, Security, Pledge, and Assignment Agreement are held, and must require the BorrowerBorrowerPerson who is the obligor per the Note. to move the accounts if the rating no longer meets Fannie Mae’s requirements as provided in Part V, Chapter 3: Custodial Accounts.
| 418.03A | |
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At least once in each calendar year (and more often if directed by Fannie Mae), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a BorrowerBorrowerPerson who is the obligor per the Note. certification that 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 in full compliance with:
- the rules qualifying the interest on the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. for exclusion from gross income for federal income tax purposes pursuant to the Internal Revenue Code; and
- the requirements of the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the BorrowerBorrowerPerson who is the obligor per the Note. certificate, and 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). does not comply with all applicable regulatory requirements, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. . Neither Fannie Mae nor the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for determining or ensuring the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance under the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , the BorrowerBorrowerPerson who is the obligor per the Note. , the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , and the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. in writing of any default by a BorrowerBorrowerPerson who is the obligor per the Note. with any provision of any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Reimbursement Agreement, Security Agreement, the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower…, or other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Credit Enhancement Document, or Bond Document.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly forward to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. copies of any notices received from a BorrowerBorrowerPerson who is the obligor per the Note. , Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. , or any other party regarding any default by a BorrowerBorrowerPerson who is the obligor per the Note. , and shall maintain ongoing contact with Fannie Mae regarding the status of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. by submitting a Non-Monetary Default Borrower Request in 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. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must collect annual compliance documentation in the form of:
- 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. with Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. , certifications from the BorrowerBorrowerPerson who is the obligor per the Note. and Administering AgentAdministering AgentThird-party compliance monitoring company. of compliance with the Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. Agreement; or
- for any other 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. , the annual recertification 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). compliance with the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower… from the agency or entity that imposed any applicable rent or occupancy restrictions or, if not available, an explanation of why it is not available.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in 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 notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. if this documentation reveals any event of default or noncompliance with the applicable:
- Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. Agreement; or
- Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the annual compliance documentation in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
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 subject to a Low-Income Housing Tax CreditLow-Income Housing Tax CreditFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. allocation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain, at least once in each calendar year (and more often if directed by Fannie Mae):
- copies of the tax and other compliance forms specified in Part III, Chapter 7: Multifamily Affordable Housing Properties; and
- BorrowerBorrowerPerson who is the obligor per the Note. certifications 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). compliance with the requirements of the Internal Revenue Code regarding Low-Income Housing Tax CreditsLow-Income Housing Tax CreditsFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. ; and
- if the Low-Income Housing Tax CreditsLow-Income Housing Tax CreditsFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. have not yet been syndicated, monthly reports from the BorrowerBorrowerPerson who is the obligor per the Note. detailing the Borrower’sBorrower’sPerson who is the obligor per the Note. progress in syndicating the tax credit allocation until the syndication is completed.
If the BorrowerBorrowerPerson who is the obligor per the Note. indicated that 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). does not comply with all applicable regulatory requirements, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default BorrowerBorrowerPerson who is the obligor per the Note. Request in 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. . Neither Fannie Mae nor the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for determining or ensuring the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance with Low-Income Housing Tax CreditLow-Income Housing Tax CreditFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. requirements. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. also must comply with the information requirements of Part III, Chapter 7: Multifamily Affordable Housing Properties.
| 418.06 | |
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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 Expanded Housing Choice pricing incentive requires additional annual monitoring. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- receive a Supplemental Annual Loan Agreement Certification (Expanded Housing Choice) (Form 6620.Supplemental.Expanded Housing Choice) from the BorrowerBorrowerPerson who is the obligor per the Note. ;
- retain Form 6620.Supplemental.Expanded Housing Choice in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
- submit a Non-Monetary Default Borrower Request in 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. , with a copy of any BorrowerBorrowerPerson who is the obligor per the Note. notice, for failure to submit Form 6620.Supplemental.Expanded Housing Choice.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- approve renewal of the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. during 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. term; and
- waive any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. provision requiring the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. to be fully funded by HUDHUDU.S. Department of Housing and Urban Development through 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through 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. a copy of the renewed HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. , and retain a copy in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , together with any BorrowerBorrowerPerson who is the obligor per the Note. request for release of the Restabilitzation Reserve.
Provided the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow the disbursement, Fannie Mae consent is not required for the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to approve disbursements from the Restabilization Reserve, including a:
- disbursement due to a HAP Contract Delay; or
- BorrowerBorrowerPerson who is the obligor per the Note.
-requested final disbursement, provided:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has received written evidence that the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. contract has been extended by HUDHUDU.S. Department of Housing and Urban Development through the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. with no material changes to its terms; and
- no default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| Section 419 | |
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Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , to monitor an SDW Housing Property, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- annually review the rent roll and sufficient lease files to determine BorrowerBorrowerPerson who is the obligor per the Note. compliance with the required rent restrictions;
- receive an annual Supplemental Annual Loan Agreement Certification (Sponsor-Dedicated Workforce Housing) (Form 6620.Supplemental.SDW) from the BorrowerBorrowerPerson who is the obligor per the Note.
, and:
- attest to the Form 6620.Supplemental.SDW that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has audited the rent roll for BorrowerBorrowerPerson who is the obligor per the Note. compliance with the required rent restrictions; or
- for any noncompliance:
- notify the BorrowerBorrowerPerson who is the obligor per the Note. of the default; and
- submit a Non-Monetary Default Borrower Request in 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. ;
- retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
, copies of:
- Modifications to Multifamily Loan and Security Agreement (Sponsor-Dedicated Workforce Housing) (Form 6271.SDW);
- Modifications to Security Instrument (Sponsor-Dedicated Workforce Housing) (Form 6325);
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). rent restrictions;
- annual rent roll and compliance results; and
- any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default BorrowerBorrowerPerson who is the obligor per the Note. notices; and
- per the Sponsor-Dedicated Workforce (SDW) Housing Job Aid, annually submit copies of the:
- Form 6620.Supplemental.SDW and ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. attestation; 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). rent roll.
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. secured by an MH CommunityMH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. with Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… requires additional monitoring. The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the BorrowerBorrowerPerson who is the obligor per the Note. to annually provide:
- a certified copy of the current residential MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. form;
- a certified copy of the notice sent to all MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. tenants if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… were implemented by the Rules and Regulations;
- copies of any actual MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. requested by LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. ; and
- a certification of the actual percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. that include all required Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…, and that no material changes have been made to the MH Community’sMH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. rules and regulations or to the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. form.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm the Borrower'sBorrower'sPerson who is the obligor per the Note. ongoing compliance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with:
a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists;
a minimum 30-day written notice of rent increases;
5-day minimum grace period for non-payment of rent,… were implemented within the MH Community’sMH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure.
rules and regulations, confirm:
- the rules and regulations contain all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… and are publicly posted in the MH CommunityMH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. ; and
- each MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. tenant received written notice of all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… added to the rules and regulations;
- if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with:
a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists;
a minimum 30-day written notice of rent increases;
5-day minimum grace period for non-payment of rent,… were implemented within the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
:
- confirm the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
form includes:
- all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…; and
- the required percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. (i.e., 25%, 50%, or 100%) are covered by the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…; and
- annually audit at least 25% of the minimum percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (i.e., 25%, 50%, or 100%) to ensure all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… are included;
- confirm the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
form includes:
- determine whether the BorrowerBorrowerPerson who is the obligor per the Note. complied with all terms of the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… (e.g., the BorrowerBorrowerPerson who is the obligor per the Note. only raised MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. rents after required notice);
- retain the review of the Borrower'sBorrower'sPerson who is the obligor per the Note. certification and audit results in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- for Tenant Site Lease ProtectionTenant Site Lease ProtectionMH Site Lease with the Homeowner or tenant of a Manufactured Home with:
a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists;
a minimum 30-day written notice of rent increases;
5-day minimum grace period for non-payment of rent,… requirements, notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected].
annually via DUS 360 of the Borrower’sBorrower’sPerson who is the obligor per the Note.
:
- certification and compliance; or
- failure to comply; and
- for any BorrowerBorrowerPerson who is the obligor per the Note. failure to comply with the Tenant Site Lease ProtectionTenant Site Lease ProtectionMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… requirements in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , comply with the following.
| Borrower Noncompliance | |
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| If the Borrower... | The Servicer must... |
| Does not comply with Tenant Site Lease Protections |
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| Section 421 | |
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If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the BorrowerBorrowerPerson who is the obligor per the Note. to convert into a single asset entity that complies with Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 302.01: Single-Asset Entity by a certain date, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- grant a one-time extension of the date by up to 90 days;
- determine whether the extension requires an amendment to the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. ; and
- document it in any form that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. deems legally enforceable.
| Section 422 | |
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Provided the change does not violate the Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. or the Fannie Mae Master Trust Agreement, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to modify the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. to:
- align with the approved terms for a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. ; or
- cross-default and/or cross-collateralize the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with a subsequent 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. .
This delegated authority includes executing all Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendments related to:
- a subordinate lien, including 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. modification for a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. with a confirmed CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. ;
- cross-collateralizing and/or cross-defaulting a Pre-Existing Mortgage LoanPre-Existing Mortgage LoanMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. with a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. with a confirmed CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. ; and
- cross-collateralizing and/or cross-defaulting a first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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 another first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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. (e.g., for a phased property), provided that cross-collateralization and cross-default were contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. and there is a confirmed CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. for the second first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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. .
| Section 423 | |
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| 423.01 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish a written policy for maturing 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. , including:
- overall monitoring responsibilities;
- criteria for handoffs between functional groups (e.g., Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. , Special Credits, etc.);
- Fannie Mae reporting;
- sending BorrowerBorrowerPerson who is the obligor per the Note. maturity notification letters; and
- determining 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. refinance eligibility.
| 423.02 | |
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On a monthly basis, beginning at least 24 months before each 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate 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). operating performance to determine the likelihood that 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. UPBUPBUnpaid Principal Balance can be refinanced based on the current cap rate, and the 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 Pay Preferred Equity payments. and NCFNCFOn 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… 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). most recent annual financial statement.
Participants from the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting, asset management, portfolio management, and finance teams must coordinate to categorize each 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. as either:
- “Meets Criteria” = 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. qualifies for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party; or
- “Does Not Meet Criteria” = 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. does not qualify for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party.
For each 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. categorized as “Does Not Meet Criteria”, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- review 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). quarterly operating statements and analyze the operating expenses (especially repairs & maintenance and capital expenses) to assess whether the BorrowerBorrowerPerson who is the obligor per the Note. is prudently managing 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
- work with the BorrowerBorrowerPerson who is the obligor per the Note. and Fannie Mae to ensure the BorrowerBorrowerPerson who is the obligor per the Note. has a reasonable payoff plan.
| 423.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the following maturity notification letters to the BorrowerBorrowerPerson who is the obligor per the Note. :
- 18 months before 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , send the first maturity notification letter notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. (18 Month Notice to Borrower – Choice Refinance Loans (Form 4217)).
- 12 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the applicable second maturity notification letter (12 Month Notice to Borrower Marketing Oriented – Choice Refinance Loans (Form 4218) or 12 Month Notice to Borrower – In Place Loans (Form 4219)):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- providing ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. contact information; and
- requesting a detailed payoff plan.
- 6 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the 6 Month Notice to Borrower – In Place Loans (Form 4220):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- requesting proof of a payoff plan (e.g., a commitment letter from another lender or sale contract); and
- advising the BorrowerBorrowerPerson who is the obligor per the Note. that 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. will be in default if not paid off or refinanced.
Within 6 months of the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must aggressively pursue a maturity solution 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. that “Does Not Meet Criteria” until the BorrowerBorrowerPerson who is the obligor per the Note. provides written proof of a payoff plan, which may include a certified escrow letter, contact information for the new lender with appropriate follow-up by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or other reasonable evidence.
On the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to issue 1 Short-Term Forbearance Letter for Maturity Defaults (Form 6645) for a term of up to 1 month, provided no other defaults exist. Default interest must be charged and a forbearance fee should not be collected.
| 423.04 | |
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On the first Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of each month, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Maturing Loan Report using the mandated template to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. with information on each 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. maturing within the next 24 months (or advising that no 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. are maturing within the next 24 months), and categorizing each as “Meets Criteria” or “Does Not Meet Criteria” in the Performance Rating column. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also update the Maturing Loan Report as new information becomes available with each monthly submission.
The comments section of the Maturing Loan Report must include, at a minimum:
- a report of discussions with the BorrowerBorrowerPerson who is the obligor per the Note. (e.g., potential new lender, term of new loan, proof of payoff plan received);
- the anticipated payoff date; and
- whether 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 likely or not to refinance, and the rationale.
All other Fannie Mae notices related to maturing 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. , including default notices, must be sent to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. .
| Chapter 5 | |
| Section 501 | |
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Requirements
You must:
- Monitor 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).
by:
- inspecting it;
- evaluating its financial performance; and
- submitting the inspection and evaluation results per this Chapter.
- Ensure the BorrowerBorrowerPerson who is the obligor per the Note. manages and maintains 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). per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| Section 502 | |
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| 502.01 | |
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Requirements
For all PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspections, you must use
- the MBAMBAMortgage Bankers Association Standard Inspection Form, or
- if a Catastrophic EventCatastrophic EventNatural or man-made hazard resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the natural environment, such as earthquake, flood, terrorist attack, or windstorm. has occurred, the Multifamily Catastrophic Loss Inspection form (Form 4261).
For a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , you must also submit the Green Rewards Verification Inspection Form (Form 4221) per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification.
Operating Procedures
On the MBAMBAMortgage Bankers Association Standard Inspection Form, you must:
1. Select the “Fannie Mae Inspection” option on the Tools tab.
2. Complete the tabs per the following table.
| Tab to be Completed | Additional Tab Requirements |
|---|---|
| General Information | Include the inspector's first and last name. |
| Physical Condition & Deferred Maintenance | |
| Photos |
Note: Photographs of the surrounding neighborhood do not count toward the minimum photo requirements per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol. |
| Rent Roll |
Ensure the rent roll is:
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| Management Interview | |
| Multifamily |
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| Fannie Mae Assessment Addendum |
Ensure all Seller/Servicer Certification information is
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| Senior Supplement | Required only for a Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. . |
3. Assign an overall rating per the MBAMBAMortgage Bankers Association Rating Scale Definitions.
| 502.02 | |
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Operating Procedures
| If the Property has... | You must... |
|---|---|
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| 502.03 | |
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Guidance
PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection frequency is based on
- the current Fannie Mae risk rating,
- the Property Condition RatingProperty Condition RatingAn assessment of the Property’s overall condition per the MBA Standard Inspection Form, expressed on a scale from 1 (the best Property Condition Rating) to 5 (lowest Property Condition Rating). ,
- 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. amount at the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , and
- a full inspection (unless otherwise noted) of the specified percentage of units per the Property Inspection Protocol table criteria, but not:
- less than the specified minimum; and
- more than the specified maximum.
If the scheduled inspection due date is within 6 months of the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , 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. inspection due date will be set to 6 months before the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
Operating Procedures
You must complete:
- a post-origination PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection within 12 months; and
- additional PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspections per the Inspection Frequency column in the following table.
| Property Inspection Protocol | ||||||
|---|---|---|---|---|---|---|
| If the original Mortgage Loan Amount is greater than $30 million... | ||||||
| Type | Fannie Mae Risk Rating | Inspection Frequency | Number of Units to Inspect |
Minimum # of Photos Total (Interior/Exterior) |
Inspector | |
| % |
Min/Max |
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| All Mortgage Loans |
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Annual | 5% | 5/15 | 20 (5/15) |
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| Substandard | Annual | 10% | 10/20 | 20 (5/15) | In-House Only | |
| If the original Mortgage Loan Amount is greater than $6 million and less than or equal to $30 million... | ||||||
| NOTE: DSCR is per the most recent annual financial statement submitted to Fannie Mae. | ||||||
| Type | Fannie Mae Risk Rating | Inspection Frequency | Number of Units to Inspect |
Minimum # of Photos Total (Interior/Exterior) |
Inspector | |
| % |
Min/Max |
|||||
| Most recent Property Condition Rating of 3 |
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Annual | 10% | 10/20 | 20 (5/15) |
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| Consecutive Property Condition Ratings of 3 or worse | All Ratings | Annual | 10% | 10/20 | 20 (5/15) | In-House Only |
| Most recent Property Condition Rating of 4 or 5 | All Ratings | Annual | 10% | 10/20 | 20 (5/15) | In-House Only |
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Annual | 5% | 5/15 | 20 (5/15) |
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| Substandard | Annual | 10% | 10/20 | 20 (5/15) | In-House Only | |
| Maturing | All Ratings | Within 12 months before Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. | Per applicable 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. type. | |||
| All others |
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5% | 5/15 | 20 (5/15) |
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Annual | 5% | 5/15 | 20 (5/15) |
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| Substandard | Annual | 10% | 10/20 | 20 (5/15) | In-House Only | |
| If the original Mortgage Loan Amount is $6 million or less... | ||||||
| NOTE: If the Property has 10 units or less, at least 2 units must be inspected. | ||||||
| Type | Fannie Mae Risk Rating | Inspection Frequency | Number of Units to Inspect |
Minimum # of Photos Total (Interior/Exterior) |
Inspector | |
| % |
Min/Max |
|||||
| Most recent Property Condition Rating of 4 or 5 (unless Delivered Mortgage Loan Amount was less than $750,000) | All Ratings | Annual | 10% | 10/20 | 20 (5/15) | In-House Only |
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Annual | 5% | 5/15 | 20 (5/15) |
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| Substandard | Annual | 10% | 10/20 | 20 (5/15) | In-House Only | |
| Maturing | All Ratings | Within 12 months before Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. | Per applicable 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. type. | |||
| All others |
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Walk Around every 5 years | N/A | N/A | 15 (exterior photos only) |
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Every 2 years | 5% | 2/5 | 15 (5/10) |
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| Substandard | Annual | 10% | 2/5 | 15 (5/10) | In-House Only | |
| 502.04 | |
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| 502.04A | |
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Operating Procedures
You must:
- ensure PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspections are performed per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol; and
- allow enough time to submit 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). inspection form by 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. submission due date.
Guidance
For scheduling efficiency, you may request 1 automatic extension for up to 60 days after the submission due date if:
- you request it before the original submission due date using the “Modification Request” tab within 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. ;
- the Fannie Mae risk rating is not Substandard;
- the most recent PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the
fee simple or Leasehold interest,
Improvements, and
personal property (per the Uniform Commercial Code).
inspection rating is:
- 1 or 2; or
- 3 if the inspection is less than 1 year old; and
- the extended MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. submission due date is at least 6 months before the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
| 502.04B | |
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Operating Procedures
You must:
- Submit 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.
:
- the origination inspection form:
- within 45 days after Fannie Mae purchases 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. and loads it into 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. ; and
- no later than 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. submission due date; and
- each subsequent inspection form:
- within 60 days after 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). inspection date; and
- no later than 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. submission due date.
- the origination inspection form:
- Timely resolve all issues Fannie Mae identifies.
Guidance
See the MAMP User Guide for PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection form submission information.
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). inspection is inadequate, Fannie Mae may require you to obtain a new inspection at your expense.
| 502.05 | |
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| 502.05A | |
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Requirements
You must ensure any inspector:
- Meets 1 of the following:
1. Is certified by the:
- Real Estate Assessment Center for HUD as a Certified Home Inspector;
- American Society of Home Inspectors (ASHI); or
- International Association of Certified Home Inspectors (InterNACHI).
2. Is a:
- state-certified home inspector;
- registered architect; or
- civil engineer.
3. Successfully completed other acceptable training, including the MBA'sMBA'sMortgage Bankers Association School of Multifamily Property Inspections.
- Has the following minimum experience:
| Type | Minimum Inspection Experience |
|---|---|
| Senior Housing Mortgage Loans | 10 seniors housing property inspections |
| Substandard Fannie Mae Risk Rating | 25 multifamily property inspections |
| All Others | 10 multifamily property inspections |
| 502.05B | |
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Requirements
Any third-party inspector must:
- have no financial interest in the inspected PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
- have experience 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; and
- not reassign responsibility to another 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). without your approval.
Guidance
Fannie Mae reserves the right, in its sole discretion, to notify you that a third-party inspector or inspection firm is unacceptable.
| 502.06 | |
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| 502.06A | |
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Operating Procedures
When selecting units:
- The inspector, not 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).
manager, must select and inspect the interior of:
- all “down” units (i.e., units that cannot currently be rented in the normal course of business);
- at least the minimum, but no more than the maximum, number of occupied and vacant units per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol; and
- units where at least:
- 50% are vacant (if existing); and
- 2 are occupied.
- If substantial physical concerns exist, the inspector may inspect more than the maximum number of units per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol.
- If a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the
fee simple or Leasehold interest,
Improvements, and
personal property (per the Uniform Commercial Code).
has Non-Contiguous ParcelsNon-Contiguous ParcelsMultiple parcels of land securing a Mortgage Loan that do not share common boundaries or that are separated by dedicated or private streets that are major arterials.
or scattered sites, on each parcel or site:
- inspect all buildings;
- allocate the number of units to inspect in the same proportion as the total PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). units; and
- randomly select the units to be inspected.
| 502.06B | |
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Operating Procedures
You must submit at least the minimum number of photos per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol with 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). inspection form. The photos must include views and captions 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).
- signage,
- frontage,
- site office and clubhouse (if applicable),
- amenities,
- typical building front,
- apartment interior,
- major building systems,
- deferred maintenance and life safety items,
- extraordinary repair or capital expenditure items, and
- all critical or substantial issues per the inspection report.
| 502.06C | |
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Operating Procedures
Except for walk-around inspections, you must interview 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). manager and other on-site staff to:
- ascertain 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). condition and performance; and
- confirm all life safety and deferred maintenance items per the most recent PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection were corrected.
| 502.06D | |
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Operating Procedures
You must evaluate:
- 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). neighborhood, submarket, and market to determine material shifts in economic and real estate conditions; and
- competitive properties to determine any changes 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).
competitive position since
- initial underwriting, or
- the most recent PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
| 502.06E | |
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Operating Procedures
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). needs repairs or maintenance:
| Step | Activity | You must... |
|---|---|---|
| 1 | Notify BorrowerBorrowerPerson who is the obligor per the Note. |
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| 2 | Follow Up |
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| 3 | Set Rating |
Set 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). inspection overall rating to 4 (or 5 depending on the severity or other existing issues) if:
|
Guidance
Setting 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). inspection rating to 4 or 5 does not:
- add 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. to Fannie Mae’s WatchlistWatchlistThe risk rating classification if you or Fannie Mae determine the Mortgage Loan has heightened credit risk. ;
- require an Action PlanAction PlanYour report analyzing the Mortgage Loan and Property issues, your resolution strategy, and related actions and outcomes. ; or
- require Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements.
reinstatement if the rating is the result of a casualty loss unless you
- identify other performance issues that increase credit risk, or
- expect insufficient funds or insurance proceeds to restore 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). to its original condition.
| 502.06F | |
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Requirements
If a third-party inspector identifies 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). issues that would be rated 3, 4, or 5 per the “Life Safety” section of the Fannie Mae Assessment Addendum of the MBAMBAMortgage Bankers Association Standard Inspection Form, the inspector must notify you within 3 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after completing the inspection.
| 502.07 | |
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| 502.07A | |
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Requirements
You must:
- Have a quality control program to annually review 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). inspections performed by third-party inspectors.
- Ensure every PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection complies with Fannie Mae’s requirements before submission.
- Show evidence and results of your quality control program if requested.
| 502.07B | |
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Operating Procedures
You must
- retain all PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection forms in your Servicing FileServicing FileYour file for each Mortgage Loan serviced. for at least 2 inspection cycles, and
- submit them upon request.
| 502.07C | |
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Guidance
PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspections are a regular asset management responsibility, and additional PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspections may be required if circumstances warrant.
You may charge the BorrowerBorrowerPerson who is the obligor per the Note. a reasonable PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection fee if it is
- permitted per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or other written BorrowerBorrowerPerson who is the obligor per the Note. agreement, and
- not prohibited by Fannie Mae.
| Section 503 | |
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| 503.01 | |
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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
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| 3 | Comment |
Comment if:
Comments should:
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| 4 | Resolve | Timely resolve any quality control issues. |
Requirements
| Fannie Mae Watchlist Status or Product | Reporting |
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| Fannie Mae Watchlist Property (All Products) |
You must submit detailed quarterly operating statements
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| Cooperative Property | No quarterly financial reporting or waiver required. |
| Small Mortgage Loan |
If the original 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. amount is:
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| Seniors Housing Property | You must submit detailed quarterly operating statements 75 days after the end of every quarter. |
| Credit Facility Property |
You must submit the Deal Level Structured Transaction Quarterly report 75 days after the end of every quarter, including the
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| All Others | You must submit detailed quarterly operating statements 75 days after the end of the second and third quarters. |
Operating Procedures
You must adhere to the following due dates:
| Fannie Mae Watchlist Property | |||
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| Reporting Quarter | Period Covered | Reporting Due Date for Property with 12/31 Fiscal Year End | Reporting Due Date for Property with non-12/31 Fiscal Year End |
| First | 1st quarter | June 30 | 90 days after 1st quarter end |
| Second | 2nd quarter year-to-date | September 15 | 75 days after 2nd quarter end |
| Third | 3rd quarter year-to-date | December 15 | 75 days after 3rd quarter end |
| Seniors Housing Property | |||
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| Reporting Quarter | Period Covered | Reporting Due Date for Property with 12/31 Fiscal Year End | Reporting Due Date for Property with non-12/31 Fiscal Year End |
| First | Trailing 3 months operating data covering the 1st quarter | June 15 | 75 days after 1st quarter end |
| Second | Trailing 3 months operating data covering the 2nd quarter | September 15 | 75 days after 2nd quarter end |
| Third | Trailing 3 months operating data covering the 3rd quarter | December 15 | 75 days after 3rd quarter end |
| Fourth | Trailing 3 months operating data covering the 4th quarter | March 15 | 75 days after 4th quarter end |
| Credit Facility Property | |||
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| Reporting Quarter | Reporting Period | Reporting Due Date for Property with 12/31 Fiscal Year End | Reporting Due Date for Property with non-12/31 Fiscal Year End |
| First |
Trailing 3 months operating data:
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June 15 | 75 days after 1st quarter end |
| Second |
Trailing 3 months operating data:
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September 15 | 75 days after 2nd quarter end |
| Third |
Trailing 3 months operating data:
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December 15 | 75 days after 3rd quarter end |
| Fourth |
Trailing 3 months operating data:
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March 15 | 75 days after 4th quarter end |
| All Others | |||
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| Reporting Quarter | Period Covered | Reporting Due Date for Property with 12/31 Fiscal Year End | Reporting Due Date for Property with non-12/31 Fiscal Year End |
| Second | 2nd quarter year-to-date | September 15 | 75 days after 2nd quarter end |
| Third | 3rd quarter year-to-date | December 15 | 75 days after 3rd quarter end |
Guidance
If any due date is not a Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , you may submit the quarterly Financial Analysis of Operations on the next Business DayBusiness DayAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. .
| 503.03A | |
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Requirements
The annual Financial Analysis of Operations (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). must cover the
- previous calendar year for a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). with a 12/31 fiscal year end, or
- fiscal year ending in the previous calendar year for a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). with a non-12/31 fiscal year end.
| 503.03B | |
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Operating Procedures
- Comply with the Annual Reporting Protocol table.
- Analyze the Borrower'sBorrower'sPerson who is the obligor per the Note. operating statements per Form 4254.DEF.
- Indicate on each statement line which of the Borrower'sBorrower'sPerson who is the obligor per the Note. income and expense items are included.
- Provide the pertinent income, expense, and other required data for the current reporting period in 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. .
| Annual Reporting Protocol | ||
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| For... | Due Date | You must... |
| First Year | ||
| A Mortgage Loan Fannie Mae purchases on or before June 30 | June 1 of the following year. | Annualize the operating data to represent 12 months of operations. |
| A Mortgage Loan Fannie Mae purchases on or after July 1 | June 1 of the second year after purchase. | Submit 12 months of actual operating data. |
| Subsequent Years | ||
| Every Property |
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Submit 12 months of actual operating data. |
| 503.03C | |
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Operating Procedures
Within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after Fannie Mae notifies you of 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. review, you must submit:
- the Borrower'sBorrower'sPerson who is the obligor per the Note. operating statements, with each income and expense line item indicated per Form 4254.DEF;
- the Borrower'sBorrower'sPerson who is the obligor per the Note. escrow activity reconciliation; and
- any other requested documentation.
| 503.04 | |
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Operating Procedures
| Waiver Reason | Action |
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| Unresponsive Borrower |
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| All Others |
Submit a waiver request 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. if:
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If you receive operating statements after a waiver was granted, you must promptly submit the Financial Analysis of Operations report (Form 4254 or Form 4254.Seniors).
| Section 504 | |
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| 504.01 | |
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Requirements
For all 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 must
- review all required BorrowerBorrowerPerson who is the obligor per the Note. or GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. information, and
- confirm compliance with the quarterly and annual reporting requirements per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Guidance
You may use the Annual Loan Agreement Certification (Form 6620 series) when compiling the required financial reports and information.
| 504.02A | |
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Operating Procedures
You:
- Will receive an annual list of all 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. requiring GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. financial records for the past fiscal year.
- Must send the BorrowerBorrowerPerson who is the obligor per the Note. and GuarantorsGuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. a list of all required financial reports.
- Must provide the BorrowerBorrowerPerson who is the obligor per the Note.
and GuarantorsGuarantorsKey Principal or other Person executing a
Payment Guaranty,
Non-Recourse Guaranty, or
any other Mortgage Loan guaranty.
sufficient time for you to submit certified financial reports:
- for BorrowersBorrowersPerson who is the obligor per the Note.
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- within 45 days after the end of each fiscal quarter, and
- 120 days after the end of each fiscal year; and
- for GuarantorsGuarantorsKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , by June 1.
- for BorrowersBorrowersPerson who is the obligor per the Note.
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- Must use best efforts to obtain all required reports.
- Must promptly submit all GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. financial reports received per Part V, Chapter 5: Surveillance, Section 504.02C: Review Financial Reporting.
Operating Procedures
You must immediately notify Fannie Mae and the BorrowerBorrowerPerson who is the obligor per the Note. or GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. if:
- the BorrowerBorrowerPerson who is the obligor per the Note. fails to submit the required GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. financial reports and information by the date required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. fails to certify each financial report is true, complete, and accurate in all material respects; or
- you believe any financial report or information is materially inaccurate or misleading.
You must provide:
- the BorrowerBorrowerPerson who is the obligor per the Note. or GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. 30 days to deliver/certify all required financial reports and information; and
- Fannie Mae copies of all related correspondence with the BorrowerBorrowerPerson who is the obligor per the Note. or any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. .
| If the Borrower or a Guarantor... | You... |
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Fails to:
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Must request a waiver through:
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| Is diligently attempting to deliver all required information. | May extend the 30-day period by an additional 30 days. |
| 504.02C | |
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Operating Procedures
After reviewing the BorrowerBorrowerPerson who is the obligor per the Note. or GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. information:
| If you determine... | You must... |
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| No additional follow up is required |
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| Additional or supporting information is required |
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| 504.02D | |
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Requirements
For 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. term, your Servicing FileServicing FileYour file for each Mortgage Loan serviced. must include the originals of the following BorrowerBorrowerPerson who is the obligor per the Note. and GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. information:
- financial records;
- certifications and certified material; and
- related information and explanatory schedules.
| Section 505 | |
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Requirements
You must:
- maintain effective OFACOFACU.S. Treasury Department, Office of Foreign Assets Control. compliance procedures;
- monthly screen:
- the BorrowerBorrowerPerson who is the obligor per the Note. , 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. , GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and PrincipalsPrincipalsPerson who owns or controls, in the aggregate, directly or indirectly (together with that Person's Immediate Family Members, if an individual), specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals,… for Potential Red Flags for Mortgage Fraud and Other Suspicious Activity; and
- all PersonsPersonsLegal 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). per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 310: Compliance; and
- report:
- all unresolved red flags per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 310: Compliance; and
- within 24 hours, any Blocked PersonBlocked PersonAny Person who is: on the FHFA SCP List; sanctioned or blocked by OFAC; or identified on: HUD's “Limited Denial of Participation, HUD Funding Disqualifications and Voluntary Abstentions List”; or General Services Administration’s “System for Award Management (SAM) exclusion list”… to Lender Assessment OversightLender Assessment OversightTeam that can be contacted at [email protected]. .