603.05

Lease Terms

603.05A

Master Leases

Requirements

You must ensure there are no master lease arrangements affecting any of the MH SitesMH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. .

603.05B

MH Site Leases

Requirements

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. must

  • be in writing, and
  • not contain an option to purchase the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. .

The BorrowerBorrowerPerson who is the obligor per the Note. must agree to implement 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,… for all MH SitesMH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. by the end of the first loan year.

Operating Procedures

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,… may be incorporated

  • by amending 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. ; or 
  • 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, if 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. incorporates the rules and regulations by reference.

The Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. must include a:

  • covenant to implement 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,… by the end of the first loan year;
  • requirement that, 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:
    • the rules and regulations are publicly posted; and 
    • each lessee of an 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. receives written notice 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,…; and
  • BorrowerBorrowerPerson who is the obligor per the Note. :
    • representation stating the 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. with 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,…;
    • covenant to continue 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,… over 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. term; and
    • requirement to annually submit to you a:
      • certified copy of 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. current Rules and Regulations;
      • 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;
      • certified copy of the current form of Residential Leases for MH SitesMH SitesDeveloped lot within an MH Community on which a Manufactured Home can be located. ;
      • copy of any requested 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. ; and
      • certification of the 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. with 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,….

Guidance

You may allow

  • month-to-month lease terms,
  • lease terms for up to 2 years, and
  • lease terms longer than 2 years, but only if the lease provides for:
    • an annual rent increase sufficient to cover the current and/or projected Consumer Price Index (CPI);
    • the pass-through of real estate taxes over a base year;
    • the pass-through of any utilities provided by the BorrowerBorrowerPerson who is the obligor per the Note. ; and
    • cannot result in the Manufactured HomeManufactured HomeFactory-built home complying with the Manufactured Home HUD Code. on the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. being titled as real estate.
603.05C

Loan Document Modification

Requirements

You must modify the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  to reflect the use of short-term or long-term leases.