501.02C

Business Income (including Rental Value) Insurance

Requirements

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). has business income insurance (including rental value insurance), for all required coverages, including
    • ordinance or law (Coverage D),
    • windstorm,
    • flood,
    • earthquake, and
    • terrorism, etc.;
  • coverage is based on:
    • Actual Loss Sustained for 12 months; or
    • the most recent annual reported (or annualized if annual financial are unavailable):
      • EGIEGIOn 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. ; or
      • NOINOIAnnually or for any specified period, the total Effective Gross Income minus the Property’s operating expenses. plus continuing expenses, with a completed business income worksheet submitted by the Borrower'sBorrower'sPerson who is the obligor per the Note. agent/broker;
  • the maximum deductible for business income insurance does not exceed the greater of
    • the maximum deductible for the property insurance policy, or
    • a waiting period up to 72 hours; and
  • coverage 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 UPBUPBUnpaid Principal Balance of $25 million or more includes a 90-day Extended Period of Indemnity option.