501.01A

Generally

Guidance

When terms or acronyms for insurance forms and policies are capitalized in this Chapter, they refer to Insurance Services Office (ISO) forms and policies or their equivalent.  Other capitalized terms and acronyms have standard insurance industry meanings.

Requirements

As of the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , you must ensure 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). is covered by compliant property insurance and liability insurance.

You must ensure all insurance policies:

  • list the BorrowerBorrowerPerson who is the obligor per the Note. as:
    • a named insured; or
    • an Additional Named Insured on the applicable policies if the policy is provided by, or in the name 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). manager (you must also verify the BorrowerBorrowerPerson who is the obligor per the Note. has a written 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 agreement with the company providing insurance);
  • are written on an Occurrence-Based Policy, except the following, which may be written on an Occurrence-Based Policy or a Claims-Made Policy:
    • earthquake insurance;
    • directors' and officers' insurance;
    • professional liability insurance; and
    • general liability insurance for Seniors Housing PropertiesSeniors Housing PropertiesMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. only when combined with professional liability insurance;
  • unless the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. expressly state otherwise, require the carrier to notify the named Mortgagee and/or Additional Insured in writing
    • at least 10 days before policy cancellation for non-payment of premium, and
    • 30 days before cancellation for any other reason;
  • except for professional liability insurance, name:
    • Fannie Mae as Additional Insured on
      • general liability insurance, and
      • excess/umbrella insurance; and
    • "Fannie Mae, its successors, and assigns" as Mortgagee and Loss Payee on property insurance; and
  • use Replacement Cost Basis; however, coverage for roofs may use
    • Actual Cash Basis, or
    • Replacement Cost Basis.

Guidance

You should:

  • obtain the advance cancellation notice for the benefit of each Mortgagee and Additional Insured from the insurance carriers whenever possible; or
  • if the insurer will not provide advance cancellation notices, ensure the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. were not modified in any manner limiting:
    • the Borrower’sBorrower’sPerson who is the obligor per the Note. obligation to promptly inform you of any notice of cancellation it receives from an insurance carrier; or
    • any recourse liability of 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. for failing to maintain all insurance coverages required by the
      • Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and
      • GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .  

An acceptable mortgagee clause is:

Fannie Mae, its successors and/or assigns, as their interest may appear
c/o [Lender Name]
Lender’s Street Address or PO Box
Lender’s City, State and Zip Code

Operating Procedures

If the insurer will not provide advance cancellation notices, your Servicing FileServicing FileYour file for each Mortgage Loan serviced. must include

  • evidence of your attempts to obtain the notice provisions, and 
  • a copy of the state statute regarding cancelation notification.

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. after 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). Book-Entry DateBook-Entry DateDate a Security is delivered by Fannie Mae via the Federal Reserve book-entry system to the applicable Investor’s designated book-entry account at a depository institution. , you must submit all applicable information via:

  • DUS Data Digitizer, for structured data using the DUS Insurance Data Set (Form 4087.INS); and
  • DUSDUSDelegated Underwriting and Servicing DocWayDocWayBusiness-to-business electronic documentation delivery application, or any successor system. , for Insurance Policy Documents, including
    • ACORD 28,
    • Alta Survey,
    • Flood Analysis Worksheet,
    • Flood Insurance Policy,
    • Special Flood Hazard Determination Form, and
    • Schedule of Values.

Guidance

You may use the Flood Insurance Job Aid to assist with completion of the DUS Data Digitizer requirements.