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Part I
Mortgage Loan
  • Chapter 1
    Overview
    • Section 101
      Using the Guide
      • 101.01 Organization
      • 101.02 References
    • Section 102
      Delegation and Underwriting
    • Section 103
      Transaction Approval Memo
    • Section 104
      Representations
  • Chapter 2
    Mortgage Loan
    • Section 201
      Registration and Multifamily Affordability Estimator
    • Section 202
      Delegated Mortgage Loans
    • Section 203
      Pre-Review Mortgage Loans
    • Section 204
      Letters of Credit
      • 204.01 Generally
      • 204.02 Issuers and Ratings
      • 204.03 Verifying Issuer Ratings
      • 204.04 Restrictions on Issuer Collateral
      • 204.05 Drawing on Letter of Credit
  • Chapter 3
    Borrower, Guarantor, Key Principals, and Principals
    • Section 301
      Generally
    • Section 302
      Borrower Organizational Structure
      • 302.01 Single-Asset Entity
      • 302.02 Co-Tenant Borrowers
        • 302.02 A Tenancy-in-Common Agreement
        • 302.02 B Key Principal Execution of Guaranty
      • 302.03 Joint and Several Borrowers with Multiple Properties
    • Section 303
      Key Principals, Principals, and Guarantors
      • 303.01 Entity Review
      • 303.02 Fund
    • Section 304
      Financial Statements
    • Section 305
      Multifamily Underwriting Certificate
    • Section 306
      Fraudulent Conveyance
    • Section 307
      Applicant Experience Check
    • Section 308
      Compliance
    • Section 309
      Execution of Non-Recourse Guaranty
    • Section 310
      Conflict Mortgage Loans
      • 310.01 Description
      • 310.02 Restrictions
        • 310.02 A Underwriting
        • 310.02 B Servicing
        • 310.02 C No First Right of Refusal
        • 310.02 D Additional Disclosure
        • 310.02 E Notifications
Part II
Property
  • Chapter 1
    Attributes and Characteristics
    • Section 101
      Eligible Properties
      • 101.01 Generally
      • 101.02 Expanded Housing Choice
    • Section 102
      Multiple Properties
      • 102.01 Single Borrower Ownership
      • 102.02 Joint and Several Borrower Ownership
    • Section 103
      Property Ownership; Leasehold
    • Section 104
      Ground Leased Properties
      • 104.01 Generally
      • 104.02 Ground Lease Rents
      • 104.03 Ground Lease Estoppel Certificate
      • 104.04 Ground Lease Review
    • Section 105
      Minimum Occupancy
      • 105.01 Residential Occupancy
      • 105.02 Qualified Occupants
    • Section 106
      Certificates of Occupancy
    • Section 107
      Phased Properties
    • Section 108
      Commercial Leases
      • 108.01 Material Commercial Leases
        • 108.01 A Lease Review
        • 108.01 B Lease Approval
        • 108.01 C Lease Modifications
        • 108.01 D Tenant Estoppel Certificate
        • 108.01 E Subordination, Non-Disturbance and Attornment
      • 108.02 Non-Material Commercial Leases
        • 108.02 A Tenant Estoppel Certificate; Lease Modification
        • 108.02 B Non-Material Commercial Lease Types
      • 108.03 Short Term Rentals
    • Section 109
      Renewable Energy Generation Systems
      • 109.01 Acceptable Renewable Energy Generation Systems
      • 109.02 Solar Photovoltaic Systems
      • 109.03 Solar PV System Module
      • 109.04 Underwritten NCF
    • Section 110
      Oil/Gas Wells and Mineral Exploration
      • 110.01 Active Oil and Gas Wells
      • 110.02 Inactive Oil and Gas Wells
    • Section 111
      Property Management and Agreement
      • 111.01 Property Management
      • 111.02 Property Management Agreement
  • Chapter 2
    Valuation and Income
    • Section 201
      Market and Valuation
      • 201.01 Market Analysis
      • 201.02 Appraisal
        • 201.02 A Appraiser Role and Qualifications
        • 201.02 B Valuation Date
        • 201.02 C Appraised Value
      • 201.03 Underwriting Value
    • Section 202
      Income Analysis
      • 202.01 Underwritten Net Cash Flow (Underwritten NCF)
      • 202.02 Underwritten DSCR
    • Section 203
      Refinance Risk Analysis
      • 203.01 Base Assumptions
      • 203.02 Alternative Assumptions
    • Section 204
      Cash Out Analysis
    • Section 205
      Rent-Stabilized Properties
  • Chapter 3
    Legal Compliance
    • Section 301
      Zoning and Legally Non-Conforming Status
      • 301.01 Zoning and Legal Non-Conforming Use
      • 301.02 Legal Non-Conforming Characteristics
    • Section 302
      Easements
    • Section 303
      Liens and Encumbrances
      • 303.01 Generally
      • 303.02 Property Previously Secured Bond Financing
    • Section 304
      Title Insurance
      • 304.01 Title Insurance Company
      • 304.02 Policy Form
      • 304.03 Electronic Policies
      • 304.04 Insured
      • 304.05 Effective Date
      • 304.06 Survey Exception
      • 304.07 Exception for Taxes, Assessments, or Other Lienable Items
      • 304.08 Financing Statements
      • 304.09 Endorsements
        • 304.09 A Generally
        • 304.09 B Environmental Protection Lien Endorsement
        • 304.09 C Comprehensive Endorsement
      • 304.10 Document Retention
    • Section 305
      Survey
      • 305.01 Decision to Obtain a Survey
      • 305.02 Survey
      • 305.03 Decision Not to Obtain a Survey
      • 305.04 Location of Improvements
    • Section 306
      Security Interests in Personal Property
      • 306.01 Uniform Commercial Code (UCC) Financing Statements
      • 306.02 Creating and Perfecting the Security Interest
  • Chapter 4
    Inspections and Reserves
    • Section 401
      Site Inspection and Lease Audit
    • Section 402
      Property Condition Assessment (PCA)
      • 402.01 When to Perform a PCA
      • 402.02 Date of PCA Report and PCA Site Visit
      • 402.03 Conducting the PCA
    • Section 403
      Completion/Repairs
      • 403.01 Property Evaluation
      • 403.02 Completion/Repairs Funding
      • 403.03 Life Safety Issues
      • 403.04 Verifying Completion/Repairs
    • Section 404
      Replacement Reserve
      • 404.01 Determining Replacement Reserve
      • 404.02 Replacement Reserve Funding
      • 404.03 Alternative Replacement Reserve Funding
    • Section 405
      Escrow Requirements for Taxes and Insurance
      • 405.01 Escrows
      • 405.02 Real Estate Tax Escrow Funding
      • 405.03 Insurance Escrow Funding
  • Chapter 5
    Property and Liability Insurance
    • Section 501
      Property and Liability Insurance
      • 501.01 General Insurance – Applies to All Policies
        • 501.01 A Generally
        • 501.01 B Blanket and Other Policies Covering Multiple Properties
        • 501.01 C Insurance Carrier Rating
        • 501.01 D Term
        • 501.01 E Payment of Premium
        • 501.01 F Evidence of Insurance
        • 501.01 G Insurance Compliance and Data
        • 501.01 H Post Closing Insurance Exceptions
      • 501.02 Property Insurance
        • 501.02 A Minimum Coverage Amounts
        • 501.02 B Business Income (including Rental Value) Insurance
        • 501.02 C Ordinance or Law Insurance
        • 501.02 D Boiler and Machinery / Equipment / Mechanical Breakdown Insurance
        • 501.02 E Builder’s Risk Insurance
        • 501.02 F Fidelity Bond / Crime Insurance
        • 501.02 G Regional Perils Insurance
      • 501.03 Catastrophic Risk Insurance
        • 501.03 A Generally
        • 501.03 B Windstorm Insurance
        • 501.03 C Flood Insurance
        • 501.03 D Earthquake Insurance
        • 501.03 E Terrorism Insurance
      • 501.04 Liability Insurance
        • 501.04 A Commercial General Liability Insurance
        • 501.04 B Professional Liability Insurance
        • 501.04 C Risk Retention Groups and Captive Insurance
        • 501.04 D Workers’ Compensation Insurance
        • 501.04 E Directors’ and Officers’ Liability Insurance
        • 501.04 F Commercial Auto Liability Insurance
      • 501.05 Small Loans
        • 501.05 A Permanent Evidence
        • 501.05 B Excess/Umbrella Insurance
        • 501.05 C Terrorism Insurance
    • Section 502
      Environmental Matters
      • 502.01 Environmental Site Assessments
      • 502.02 Lender’s Responsibilities
      • 502.03 Environmental Indemnity Agreement
    • Section 503
      Seismic Risk
      • 503.01 Seismic Hazard and Risk Factors
      • 503.02 Seismic Risk Assessment (SRA)
      • 503.03 Acceptable Levels of Seismic Risk
      • 503.04 Seismic Retrofit Ordinances
      • 503.05 Seismic Risk Mitigants
Part III
Products and Features
  • Chapter 1
    Student Housing Properties
    • Section 101
      Description
      • 101.01 Student Housing Property
      • 101.02 Dedicated Student Housing Property
    • Section 102
      Generally
    • Section 103
      Dedicated Student Housing Property
      • 103.01 Eligible Property Characteristics
      • 103.02 Ineligible Property Characteristics
      • 103.03 Residential Leases
      • 103.04 Properties on College/University Land
      • 103.05 Additional Underwriting Documentation
    • Section 104
      Underwritten NCF
    • Section 105
      Replacement Reserve
      • 105.01 Determining Replacement Reserve
      • 105.02 Replacement Reserve Funding
  • Chapter 2
    Military Housing Properties
    • Section 201
      Description
    • Section 202
      Ineligible Property Types
    • Section 203
      Generally
  • Chapter 3
    Moderate Rehabilitation Mortgage Loans
    • Section 301
      Description
    • Section 302
      Underwriting
    • Section 303
      Rehabilitation Work Costing More than $20,000 Per Unit
      • 303.01 Rehabilitation Work Evaluation Report
      • 303.02 Rehabilitation Reserve Agreement
    • Section 304
      Supplemental Mortgage Loans
  • Chapter 4
    Green Mortgage Loans
    • Section 401
      Generally
      • 401.01 Description
      • 401.02 High Performance Building Module
      • 401.03 Technical Solar Report
      • 401.04 Green MBS
      • 401.05 Committing and Delivery
    • Section 402
      Green Building Certification
    • Section 403
      Green Rewards Mortgage Loans
      • 403.01 Eligibility
        • 403.01 A Generally
        • 403.01 B HPB Module, HPB Report, and Technical Solar Report Scoring
        • 403.01 C HPB Module, HPB Report, and Technical Solar Report Approval
        • 403.01 D Non-Contiguous Parcels
      • 403.02 Implementing Efficiency Measures
        • 403.02 A Generally
        • 403.02 B Solar PV System
      • 403.03 Underwritten NCF
      • 403.04 Maximum Amount
      • 403.05 Supplemental Mortgage Loans
    • Section 404
      Annual Energy Reporting
  • Chapter 5
    Seniors Housing Properties
    • Section 501
      Generally
      • 501.01 Description
      • 501.02 Eligible Lenders
      • 501.03 Key Principal/Sponsor Experience
    • Section 502
      Eligible Properties
      • 502.01 Eligible Properties
      • 502.02 Ineligible Properties
    • Section 503
      Continuing Care Retirement Communities (CCRCs)
    • Section 504
      Seniors Housing Property Income
      • 504.01 Underwritten NCF
      • 504.02 Skilled Nursing NCF Test
      • 504.03 Operating Lease Ratios
      • 504.04 Operating Lease Analysis
    • Section 505
      Replacement Reserve
    • Section 506
      Medicaid Funds
      • 506.01 Dependency and Medicaid Transition Reserve
      • 506.02 State Medicaid
    • Section 507
      Consultant Reports
      • 507.01 Management, Operations, and Regulatory Compliance
      • 507.02 Management and Operations Reports
      • 507.03 Regulatory Compliance Report
  • Chapter 6
    Manufactured Housing Communities
    • Section 601
      Description
    • Section 602
      Lender Eligibility
    • Section 603
      Legal and Property Compliance
      • 603.01 Borrower and the MH Community
        • 603.01 A Borrower Ownership
        • 603.01 B Collateral; Tenant-Occupied and Affiliate-Owned Homes
        • 603.01 C MH Community
      • 603.02 MH Community Score
      • 603.03 Code Standards
      • 603.04 Flood Zone
        • 603.04 A Rising Water
        • 603.04 B Moving Water
      • 603.05 Lease Terms
        • 603.05 A Master Leases
        • 603.05 B MH Site Leases
        • 603.05 C Loan Document Modification
    • Section 604
      Property Insurance
    • Section 605
      Survey
      • 605.01 Public Roadways, Private Interior Roadways, and Drives
      • 605.02 Setbacks
      • 605.03 Encroachments
    • Section 606
      Property Income and Underwritten NCF
    • Section 607
      Replacement Reserve
  • Chapter 7
    Multifamily Affordable Housing Properties
    • Section 701
      Generally
      • 701.01 Description
      • 701.02 Eligible Lenders
    • Section 702
      MAH Property Eligibility
      • 702.01 Eligible Characteristics and Underwriting
      • 702.02 Ineligible Characteristics and Underwriting
    • Section 703
      Property Income and Underwriting
      • 703.01 Underwritten NCF
      • 703.02 Underwriting
        • 703.02 A Appraised Value and Underwriting Value
        • 703.02 B Market Study
        • 703.02 C Affordable Regulatory Agreement Restrictions
        • 703.02 D 35-Year Amortization
        • 703.02 E LIHTC Income Averaging
        • 703.02 F Initial LIHTC Equity
        • 703.02 G Developer Fees
        • 703.02 H Rent-Stabilized Units
    • Section 704
      Subordinate Financing
      • 704.01 Interest Rate and Payments
      • 704.02 Loan Term
      • 704.03 Collateral and Credit Support
      • 704.04 Soft Financing
      • 704.05 Subordinate Lender
      • 704.06 Developer's Notes
      • 704.07 Subordination Agreement
      • 704.08 Lien Priority and Title Insurance Policy
      • 704.09 Form of Subordinate Loan Documents
      • 704.10 Prepayment
      • 704.11 LIHTC Equity Bridge Loans
    • Section 705
      Restrictive Covenants and Affordable Regulatory Agreements
    • Section 706
      ROAR Loan
      • 706.01 Generally
      • 706.02 Timing
      • 706.03 General Underwriting
      • 706.04 Additional Underwriting and Loan Documents
    • Section 707
      HAP Contract Properties
      • 707.01 Properties with Both HAP Contracts and LIHTC Units
      • 707.02 Restabilization Reserve
      • 707.03 HAP Contract Review Sheet
    • Section 708
      Refinancing Section 236 Properties – IRP is Maintained
      • 708.01 No Additional Proceeds
      • 708.02 Additional Proceeds from Mortgage Loan
      • 708.03 Additional Proceeds from Other Sources
    • Section 709
      LIHTC Properties – Lender Equity Interest
    • Section 710
      Transactions with Fannie Mae Debt and Equity Interests
      • 710.01 Transactions Funded with Tax-Exempt Bond Proceeds
      • 710.02 Fannie Mae Credit-Enhanced Tax-Exempt Bond Issuance
    • Section 711
      FHA Risk Sharing
      • 711.01 Description
      • 711.02 Eligibility
        • 711.02 A Borrowers, Key Principals, Guarantors, and Principals
        • 711.02 B Generally
        • 711.02 C Cash Out
      • 711.03 Mortgage Insurance Premium
      • 711.04 Subsidy Layering Review
      • 711.05 Lender FHA Risk Sharing Reserve and Loss Sharing Modifications
  • Chapter 8
    Cooperative Properties
    • Section 801
      Description
    • Section 802
      Eligible Mortgage Loans
      • 802.01 Basic Conditions
      • 802.02 Financial Conditions
      • 802.03 Property Management Conditions
      • 802.04 Other Considerations
    • Section 803
      Underwriting
      • 803.01 Financial Operation
      • 803.02 Property Valuation
      • 803.03 Subordinate Debt
    • Section 804
      Income Analysis
      • 804.01 Cooperative Market Rental Basis NCF (Underwritten NCF)
      • 804.02 Cooperative Market Rental Basis DSCR (Underwritten DSCR)
      • 804.03 Actual Cooperative Property NCF
      • 804.04 Actual Cooperative Property DSCR
    • Section 805
      Limited Equity Cooperative Properties
  • Chapter 9
    Small Mortgage Loans
    • Section 901
      Generally
      • 901.01 Description
      • 901.02 Applicability
    • Section 902
      Key Principal Guaranty Obligation
    • Section 903
      Occupancy
    • Section 904
      Corporate Leases; Leases to One Entity
    • Section 905
      Property Income Analysis
      • 905.01 Small Mortgage Loan Underwritten NCF (Underwritten NCF)
      • 905.02 Underwritten DSCR
    • Section 906
      Property Management
    • Section 907
      Property Condition
      • 907.01 Site Inspection by Lender or Other Third Party
      • 907.02 Site Inspection by Borrower
      • 907.03 PCA
    • Section 908
      Replacement Reserve
    • Section 909
      Environmental Matters and Inspections
    • Section 910
      Borrower, Key Principals, Guarantors, and Principals
      • 910.01 Borrower Organizational Structure
      • 910.02 Co-Tenant Borrowers
      • 910.03 Key Principals
      • 910.04 Principals
      • 910.05 Financial Statements
      • 910.06 Net Worth and Liquid Assets
    • Section 911
      Credit Reports
      • 911.01 Credit Report
      • 911.02 FICO Scoring
      • 911.03 Reviewing the Credit Report
  • Chapter 10
    Healthy Housing Rewards
    • Section 1001
      Healthy Housing Rewards
    • Section 1002
      Healthy Design
    • Section 1003
      Enhanced Resident Services
  • Chapter 11
    Adjustable Rate Mortgage (ARM) Loans
    • Section 1101
      Description
    • Section 1102
      Underwriting
    • Section 1103
      Prepayment Terms
      • 1103.01 Generally
      • 1103.02 1% Prepayment Premium Schedule
    • Section 1104
      ARM 5/5 Loan Optional 5-Year Adjustable Rate Term Renewal Eligibility
  • Chapter 12
    Structured Adjustable Rate Mortgage (SARM) Loans
    • Section 1201
      Description
    • Section 1202
      Underwriting
    • Section 1203
      Actual Amortization Calculation
    • Section 1204
      Prepayment Terms
      • 1204.01 Generally
      • 1204.02 Prepayment Option 1 – Declining Prepayment Premium Schedule
      • 1204.03 Prepayment Option 2 - 1% Prepayment Premium Schedule
    • Section 1205
      Interest Rate Caps
      • 1205.01 Replacement Interest Rate Cap
      • 1205.02 Determining the Cap Strike Rate
      • 1205.03 Including the Cap Cost Factor in the Variable Underwriting Rate
      • 1205.04 Establishing Interest Rate Cap Reserves
      • 1205.05 Interest Rate Cap Contract Documentation and Delivery
  • Chapter 13
    Hybrid Adjustable Rate Mortgage (Hybrid ARM) Loans
    • Section 1301
      Description
    • Section 1302
      Interest Rate Conversion Date
    • Section 1303
      Prepayment Terms
    • Section 1304
      Monthly Principal and Interest Payments
      • 1304.01 During the Fixed Rate Term
      • 1304.02 On the Hybrid ARM Loan Conversion Date
      • 1304.03 During the Adjustable Rate Term
  • Chapter 14
    Supplemental Mortgage Loans
    • Section 1401
      Description
    • Section 1402
      Supplemental Mortgage Loans
      • 1402.01 Description
      • 1402.02 Coterminous and Non-Coterminous
      • 1402.03 Loan Amount
        • 1402.03 A Maximum Loan Amount
        • 1402.03 B Calculating the Debt Service
        • 1402.03 C Calculating the DSCR and LTV
        • 1402.03 D New Loan Test
      • 1402.04 Tier Dropping
        • 1402.04 A Designating
        • 1402.04 B Eligibility
        • 1402.04 C Ineligible Mortgage Loans
      • 1402.05 Streamlined Underwriting
        • 1402.05 A Property
        • 1402.05 B Borrower, Guarantor, Key Principals, and Principals
  • Chapter 15
    Split Mortgage Loans and Bifurcated Mortgage Loans
    • Section 1501
      Description
    • Section 1502
      Characteristics
  • Chapter 16
    Mezzanine Financing and Preferred Equity
    • Section 1601
      Mezzanine Financing
      • 1601.01 Description
        • 1601.01 A Eligible Mortgage Loans
        • 1601.01 B Eligible Terms
        • 1601.01 C Loss Sharing
        • 1601.01 D Lender's Loan Application
      • 1601.02 Underwriting
      • 1601.03 Submission
        • 1601.03 A Materials
        • 1601.03 B Data
      • 1601.04 Intercreditor Agreement
      • 1601.05 Servicing
    • Section 1602
      Preferred Equity
      • 1602.01 Description
        • 1602.01 A Definitions
        • 1602.01 B Exclusions
        • 1602.01 C Eligible Mortgage Loans
        • 1602.01 D Structures
        • 1602.01 E Limitations
        • 1602.01 F Lender's Loan Application
      • 1602.02 Underwriting
      • 1602.03 Hard Preferred Equity
        • 1602.03 A Submission
        • 1602.03 B Outside Counsel and Due Diligence Fees
  • Chapter 17
    Structured Transactions
    • Section 1701
      Description
    • Section 1702
      Credit Facilities
    • Section 1703
      Bulk Deliveries
  • Chapter 18
    Choice Refinance Loans
    • Section 1801
      Eligibility
    • Section 1802
      Lender Delegation
    • Section 1803
      Prepayment Premiums
    • Section 1804
      Streamlined Underwriting
      • 1804.01 Property Condition Assessment (PCA)
      • 1804.02 Environmental Site Assessment
      • 1804.03 Survey
      • 1804.04 Borrower Structure and Experience
      • 1804.05 Borrower Credit
      • 1804.06 Property Management
      • 1804.07 Replacement Reserve
      • 1804.08 Real Estate Tax and Insurance Escrows
    • Section 1805
      Property Ownership Change
  • Chapter 19
    Bond Transactions and Credit Enhancement Mortgage Loans
    • Section 1901
      Description
    • Section 1902
      Outside Counsel
      • 1902.01 Engagement
      • 1902.02 Fees
    • Section 1903
      Third Parties
      • 1903.01 Generally
      • 1903.02 Remarketing Agent
    • Section 1904
      Legal Documents
      • 1904.01 Generally
      • 1904.02 Credit Enhancement Instrument
      • 1904.03 MBS for Bonds
      • 1904.04 Affordable Regulatory Agreements
    • Section 1905
      Fannie Mae LIHTC Investment in Credit-Enhanced Bonds
    • Section 1906
      Credit Enhancing Fixed Rate Bonds
      • 1906.01 Terms
      • 1906.02 Multiple Fixed Rate Bonds
    • Section 1907
      Credit Enhancing Variable Rate Bonds
      • 1907.01 Terms
      • 1907.02 Principal Reserve Fund
      • 1907.03 Interest Rate Cap
      • 1907.04 Cap Strike Rate
      • 1907.05 Interest Rate Cap Reserve
      • 1907.06 Interest Rate Cap Reserve Adjustments
      • 1907.07 Interest Rate Cap Contract Documentation and Delivery
    • Section 1908
      Facility Fee
    • Section 1909
      Taxable Tails and Supplemental Mortgage Loans
      • 1909.01 Taxable Tails
      • 1909.02 Supplemental Mortgage Loans
    • Section 1910
      Third-Party Subordinate Financing
    • Section 1911
      Moderate Rehabilitation Mortgage Loan with Side-by-Side Bond Financing
  • Chapter 20
    Forward Commitments
    • Section 2001
      Generally
      • 2001.01 Description
      • 2001.02 Eligible Properties
    • Section 2002
      Funded Forward Commitments
    • Section 2003
      Unfunded Forward Commitments
      • 2003.01 Terms and Interest Rate Determination
        • 2003.01 A Terms
        • 2003.01 B Interest Rate Determination and Rate Lock
      • 2003.02 Good Faith Deposit and Fees
        • 2003.02 A Good Faith Deposit
        • 2003.02 B Fees
      • 2003.03 Forward Commitment Underwriting
        • 2003.03 A Generally
        • 2003.03 B Construction and Feasibility Review
        • 2003.03 C Third-Party Reports
      • 2003.04 Commitment
      • 2003.05 Construction Period
        • 2003.05 A Monitoring
        • 2003.05 B Reporting
        • 2003.05 C Forward Commitment Extensions
      • 2003.06 Construction Completion
      • 2003.07 Permanent Loan Final Underwriting
        • 2003.07 A Generally
        • 2003.07 B Stabilized NCF
        • 2003.07 C Final Permanent Mortgage Loan Amount
        • 2003.07 D Third-Party Reports
      • 2003.08 Conversion
        • 2003.08 A Eligibility
        • 2003.08 B Timeline
      • 2003.09 MBS Issuance
      • 2003.10 Forward Commitment Termination
Part IV
Committing and Delivery
  • Chapter 1
    Pricing, Fees, and Prepayment Premiums
    • Section 101
      Pricing
    • Section 102
      Fees
    • Section 103
      Prepayment Premiums
  • Chapter 2
    Rate Lock and Committing
    • Section 201
      Pre-Commitment
      • 201.01 Borrower Commitment
      • 201.02 Trading Agreements
      • 201.03 Trading Practices
    • Section 202
      Obtaining a Rate Lock
      • 202.01 Rate Lock Period
      • 202.02 Rate Lock Amount
      • 202.03 Locking the Rate
    • Section 203
      Good Faith Deposits
      • 203.01 Borrower Deposit
      • 203.02 Minimum Good Faith Deposit
      • 203.03 Good Faith Deposit and Breakage Fees
    • Section 204
      Commitments
      • 204.01 Submission
      • 204.02 Confirmation
      • 204.03 Modifications
        • 204.03 A Change Requests
        • 204.03 B Rate Lock Extensions
        • 204.03 C Commitment Extensions
    • Section 205
      ASAP Options
  • Chapter 3
    Streamlined Rate Lock
    • Section 301
      Description
      • 301.01 Eligibility
      • 301.02 Timing
    • Section 302
      Preliminary Underwriting
    • Section 303
      Rate Lock
    • Section 304
      Commitment
    • Section 305
      Rate Lock and Commitment Extensions
    • Section 306
      Full Underwriting
      • 306.01 Rate Lock or Commitment Amount Changes
      • 306.02 Mortgage Loan Delivery Package
      • 306.03 Post-Underwriting Scenarios
    • Section 307
      Dual Commitment Option
      • 307.01 Description
      • 307.02 Additional Proceeds
  • Chapter 4
    Delivery
    • Section 401
      Delivery Deadline
    • Section 402
      Submission
      • 402.01 Data and Documents
      • 402.02 Participation Interests
    • Section 403
      Warehouse Lender
    • Section 404
      Wiring
      • 404.01 Wiring Instructions
      • 404.02 Wiring Payee Codes
    • Section 405
      Delivery
      • 405.01 Acceptability and Delivery Tolerance
      • 405.02 Data Changes
    • Section 406
      MBS Delivery Options
    • Section 407
      Delivery Problems and Changes
      • 407.01 Delivery Problems
      • 407.02 Changing the Book-Entry Date
    • Section 408
      Delivery Failure
  • Chapter 5
    Purchase
    • Section 501
      Generally
      • 501.01 Cash and MBS
      • 501.02 Delivery and Purchase
      • 501.03 C&D Purchase Notification
      • 501.04 Fannie Mae Loan Number
    • Section 502
      Purchase Amount
    • Section 503
      Third Party MBS Investor Delivery Scenarios
    • Section 504
      MBS Mortgage Loan Disclosure
      • 504.01 Multifamily MBS Prospectus
      • 504.02 Additional Disclosure
      • 504.03 Disclosure Obligations
    • Section 505
      ASAP
  • Chapter 6
    Structured Transactions
    • Section 601
      Registration
    • Section 602
      Approval
      • 602.01 Approval Documents
      • 602.02 Expiration Dates
      • 602.03 Fees
      • 602.04 Rate Lock
      • 602.05 Loan Documents
    • Section 603
      Commitment
      • 603.01 MBS Mortgage Loans
      • 603.02 Cash Mortgage Loans
    • Section 604
      Delivery
      • 604.01 Delivery Process
      • 604.02 MSFMS Data Errors
    • Section 605
      MBS Disclosure
    • Section 606
      Features and Activities
      • 606.01 Process
      • 606.02 Asset Management Activities
  • Chapter 7
    Variable Rate Conversions and Renewals
    • Section 701
      Conversion Process
    • Section 702
      ARM Loan and SARM Loan Conversions
      • 702.01 Governing Documents
      • 702.02 Minimum Conversion Debt Service Ratio
      • 702.03 Conversion Criteria
      • 702.04 Guaranty Fee and Servicing Fee
      • 702.05 Interest-Only
      • 702.06 Fixed Rate Amortization
      • 702.07 Fixed Rate Debt Service Payments
      • 702.08 Fixed Rate MBS Trade Premium
      • 702.09 New Property Condition Assessment (PCA)
    • Section 703
      Commitment and Delivery
      • 703.01 Rate Lock and Commitment
      • 703.02 Conversion Delivery
        • 703.02 A Deliver Loan Document Amendments
        • 703.02 B Deliver Mortgage Loan Delivery Package
      • 703.03 Conversion Activities
      • 703.04 Pay Off
    • Section 704
      ARM 5/5 Optional 5-Year Adjustable Rate Term Renewal
      • 704.01 Eligibility
      • 704.02 Underwriting
      • 704.03 Prepayment Terms
  • Chapter 8
    Bond Transactions and Credit Enhancement Mortgage Loans
    • Section 801
      Credit Enhancement Mortgage Loan Committing and Delivery
      • 801.01 Pre-Commitment
      • 801.02 Preliminary Official Statement
      • 801.03 Good Faith Deposit
      • 801.04 Rate Lock
      • 801.05 Commitment
    • Section 802
      Data and Document Delivery
      • 802.01 Credit Enhancement Mortgage Loans
      • 802.02 Interest Rate Cap
Part V
Servicing and Asset Management
  • Chapter 1
    Servicing
    • Section 101
      Generally
      • 101.01 Relationship
      • 101.02 Standard
      • 101.03 Servicing File
      • 101.04 Loan Document Compliance
    • Section 102
      Uniform Commercial Code (UCC) Financing Statements
      • 102.01 Filing Documents
      • 102.02 UCC Continuations, Amendments, and Terminations
    • Section 103
      Letters of Credit
      • 103.01 Servicing File
      • 103.02 Certification
      • 103.03 Monitoring Expiration Dates
      • 103.04 Replacement Letter of Credit
      • 103.05 Verifying Issuer Ratings
        • 103.05 A Monitoring
        • 103.05 B Rating Noncompliance
      • 103.06 Managing Draws and Releases
        • 103.06 A Letter of Credit Draws
        • 103.06 B Releasing/Reducing Letters of Credit or Other Collateral
    • Section 104
      Bond Transactions and Credit Enhancement Mortgage Loans
      • 104.01 Borrower Obligations
        • 104.01 A Payments
        • 104.01 B Principal Reserve Fund
      • 104.02 Cash Collateral Agreements
      • 104.03 UCC Filings
      • 104.04 Remarketing Agent Changes
  • Chapter 2
    Reporting and Remitting
    • Section 201
      Generally
    • Section 202
      Collection, Tracking and Reporting of Monthly P&I Payments and T&I Amounts
    • Section 203
      Reporting Loan Activity and Security Balance
      • 203.01 Use of Fannie Mae eServicing System
      • 203.02 Reporting Specific Transactions
      • 203.03 Monthly Activity Reporting
        • 203.03 A When to Begin Reporting
        • 203.03 B Cutoff Dates for Loan Activity Reporting
      • 203.04 Monthly Securitized Mortgage Loan Security Balance Reporting
        • 203.04 A Reporting Security Balances
        • 203.04 B Same Month Pooling – Security Balance for First Reporting Cycle
        • 203.04 C Security Balances Due by Second Business Day
        • 203.04 D Failure to Meet Reporting Deadline
      • 203.05 Due Dates for Reports
        • 203.05 A Removal Transactions
        • 203.05 B All Other Transactions
      • 203.06 Mortgage Loan Activity Record
        • 203.06 A Payment Collection
        • 203.06 B Fee Collection
        • 203.06 C Mortgage Loan Status
      • 203.07 Fannie Mae-Generated Monthly Reports
        • 203.07 A MBS Mortgage Loan P&I Draft Report
        • 203.07 B Cash Mortgage Loan P&I Draft Reports
        • 203.07 C Month-End Report
      • 203.08 Monthly MBS Mortgage Loan Reconciliations - Pool-to-Security Balance Reconciliations (Not Applicable to PFP MBS)
        • 203.08 A Reconciliation Required
        • 203.08 B Rounding Adjustment
        • 203.08 C Required Annual Adjustment to Correct Principal Balance vs. Security Balance Difference
        • 203.08 D Pool-to-Security Reconciliation Certification
    • Section 204
      Calculation of Interest Due
      • 204.01 Generally
      • 204.02 Calculating Interest Due
        • 204.02 A Actual/360 Interest Calculation Method
        • 204.02 B 30/360 Interest Calculation Method
    • Section 205
      ARM Loan Interest Rate and Monthly Payment Changes
      • 205.01 Adjustable Rate Mortgage Loan Interest Rate Changes and Required Monthly Payments
        • 205.01 A The Adjustable Rate Mortgage Loan Index
        • 205.01 B Determining the New Monthly Payment
      • 205.02 Monthly Reporting for ARM Loan Payment/Rate Changes
      • 205.03 Structured ARM Loans
    • Section 206
      Application of Monthly Payments
      • 206.01 Fannie Mae Form Loan Documents
      • 206.02 Non-Fannie Mae Form Loan Documents
    • Section 207
      Payment Shortages
    • Section 208
      Delinquency and Servicing Advances
      • 208.01 Generally
        • 208.01 A Applicability
        • 208.01 B Delinquency Advances on a Mortgage Loan other than a Credit Enhancement Mortgage Loan
        • 208.01 C Delinquency Advances on a Credit Enhancement Mortgage Loan
        • 208.01 D Servicing Advances on a Mortgage Loan other than a Credit Enhancement Mortgage Loan
        • 208.01 E Servicing Advances on a Credit Enhancement Mortgage Loan
      • 208.02 Duration of Payment of Delinquency Advances or Servicing Advances
        • 208.02 A Obligation to Make Delinquency Advances
        • 208.02 B Obligation to Make Servicing Advances
        • 208.02 C Reimbursement for Delinquency and Servicing Advances
      • 208.03 Repayment of Servicing Advances from Borrower
      • 208.04 No Capitalization of Servicing Advances for Securitized Mortgage Loans
      • 208.05 Entitlement to Default Interest
    • Section 209
      Remittance Procedures
      • 209.01 Definitions
        • 209.01 A Interest Distribution Amount
        • 209.01 B Principal Distribution Amount
        • 209.01 C Monthly Remittance
      • 209.02 Monthly P&I Remittance Due Dates for Cash and MBS Transactions
      • 209.03 Cash Remittance System
        • 209.03 A Drafting Account Use
        • 209.03 B Drafting Account Setup
        • 209.03 C Remittance Transaction Codes
      • 209.04 Additional Requirements for Monthly Remittance for Security Transactions
        • 209.04 A Amount of Security Monthly Remittance
        • 209.04 B Security Interest Distribution Amount
      • 209.05 Securitized Mortgage Loans – Remitting Fees to Fannie Mae
        • 209.05 A Guaranty Fee Due on 7th Calendar Day of Month
        • 209.05 B Guaranty Fee Remittance
        • 209.05 C Same Month Pooling – Interest and Guaranty Fee Remittance for First Reporting Cycle
      • 209.06 Notification to Fannie Mae if Unable to Have Funds Available on any Remittance Date
    • Section 210
      Full Prepayments
      • 210.01 Review of Applicable Loan Documents Required
      • 210.02 Notification of Prepayment; Timing of Prepayment
        • 210.02 A Notice and Timing Consistent with Loan Documents
        • 210.02 B Borrower Notice Must Contain Date of Intended Prepayment and Comply with Notice Requirements of the Loan Documents
        • 210.02 C Loan Document Requirements for Payoff and Lockout Dates
        • 210.02 D Notice to Fannie Mae of Proposed Payoff; Use of Fannie Mae Payoff Calculator
      • 210.03 Timing of Confirmation of the Full Prepayment Payoff Amount
      • 210.04 Full Prepayment for Cash Transactions and PFP MBS
        • 210.04 A Confirming the Full Prepayment Payoff Amount
        • 210.04 B Reporting Full Prepayment Payoff Amount
        • 210.04 C Remitting Full Prepayment Payoff Amount
      • 210.05 Full Prepayment for Securitized Transactions (Not Applicable to PFP MBS)
        • 210.05 A Confirming the Full Prepayment Payoff Amount
        • 210.05 B Reporting Full Prepayment Payoff Amount
        • 210.05 C Remitting Full Prepayment Payoff Amount
    • Section 211
      Partial Prepayments Not From Insurance or Condemnation Proceeds
      • 211.01 Partial Prepayments Generally Prohibited
      • 211.02 Partial Prepayment Procedures
        • 211.02 A Servicer’s Analysis of Loan Documents
        • 211.02 B Fannie Mae Approval Required for Partial Prepayments
        • 211.02 C Prepayment Premium Due on Partial Prepayment
        • 211.02 D Reporting and Remitting Partial Prepayments When Not Permitted in Loan Documents
        • 211.02 E Reporting and Remitting Partial Prepayments When Permitted in Loan Documents
    • Section 212
      Prepayments (Full or Partial) Involving Insurance Proceeds or Condemnation Awards
      • 212.01 Partial Prepayments Generally Permitted
      • 212.02 No Prepayment Premium Required
      • 212.03 Reporting and Remitting Partial Prepayments
    • Section 213
      Prepayment Premium Sharing
      • 213.01 General
      • 213.02 Yield Maintenance Prepayment Premiums – Prepayment Occurs Before the Yield Maintenance Period End Date
        • 213.02 A Calculation of Total Prepayment Premium
        • 213.02 B Calculation of Investor’s Share of Total Prepayment Premium for a Securitized Mortgage Loan
        • 213.02 C Calculation of Fannie Mae’s Share of Total Prepayment Premium
        • 213.02 D Calculation of Servicer’s Share of Total Prepayment Premium
      • 213.03 Yield Maintenance Prepayment Premiums – Prepayment Occurs On or After the Yield Maintenance Period End Date
        • 213.03 A Prepayment On or After Yield Maintenance Period End Date
        • 213.03 B Prepayment During Open Period
      • 213.04 Fixed Rate Mortgage Loans with Graduated Prepayment Premiums
      • 213.05 Prepayment Premiums for ARM Loans and Structured ARM Loans
      • 213.06 Prepayment Premium Waivers; Servicer’s Share of Prepayment Premium
    • Section 214
      Maturing Mortgage Loans/Payoffs
      • 214.01 Balloon Mortgage Loans
      • 214.02 Servicer Notification of Payoff Amount to Borrower
      • 214.03 Calculating and Obtaining Confirmation of Payoff Amount
        • 214.03 A Calculating the Full Payoff Amount
        • 214.03 B Fannie Mae Will Not Confirm Nor Is Responsible for Amounts Owing to Servicer
        • 214.03 C Fannie Mae Confirmation of Full Payoff Amount
        • 214.03 D No Quote to Borrower Until Fannie Mae Confirmation
      • 214.04 Reporting the Payoff and Remitting the Payoff Funds
        • 214.04 A Reporting Full Payoff Amount Through the eServicing System Due By 2nd Business Day of Month
        • 214.04 B Remitting Full Payoff Amount
    • Section 215
      Post-Payoff Actions
      • 215.01 Servicer Required Actions
        • 215.01 A General
        • 215.01 B Individual Mortgage Loan Releases
      • 215.02 Post Payoff Document Retention Requirements
    • Section 216
      DUS Bond Credit Enhancement Transactions – Reporting and Remitting Requirements
      • 216.01 Monthly Bond Credit Enhancement Reporting
      • 216.02 Monthly Remittance Procedures
        • 216.02 A Monthly Remittances of Scheduled Payments to Bond Trustee
        • 216.02 B Replenishment of Withdrawals from the PRF
        • 216.02 C Collection and Remittance of Borrower Reimbursement Obligations for Fannie Mae Advances
        • 216.02 D Monthly Remittance of Fees to Fannie Mae
        • 216.02 E Notice and Collection of Other Fees and Expenses
      • 216.03 Prepayments – General Introduction
        • 216.03 A Bond Redemption Premiums Payable to Bondholders
        • 216.03 B Termination Fee or Prepayment Premium Payable to Fannie Mae
        • 216.03 C Termination When No Prepayment Occurs; Weekly Variable Rate Transactions
      • 216.04 Prepayments – Processing
        • 216.04 A General
        • 216.04 B Prompt Notice of Intended Prepayment
        • 216.04 C Critical Path Due Dates
        • 216.04 D Fannie Mae’s Confirmation Required
      • 216.05 Prepayments: Prepayment Reporting
      • 216.06 Prepayments: Remittances
      • 216.07 Reporting on Delinquency Status
    • Section 217
      Mezzanine Loan Reporting and Remitting
      • 217.01 Remitting DUS Plus Mezzanine Loans
      • 217.02 Payoffs
    • Section 218
      Defeasance
      • 218.01 Mortgage Loan Documents Must Permit Defeasance
      • 218.02 Borrower’s Election to Defease
      • 218.03 Defeasance Option Procedures
        • 218.03 A Defeasance Documents
        • 218.03 B Defeasance Notice
        • 218.03 C Defeasance Commitment Fee
        • 218.03 D Verification of the Defeasance Notice
        • 218.03 E Substitute Collateral
        • 218.03 F Assignment and Assumption
        • 218.03 G Closing Documents
        • 218.03 H Amounts Payable by Borrower
        • 218.03 I Defeasance Deposit
        • 218.03 J Release
        • 218.03 K Fannie Mae Security Liquidated Damages
        • 218.03 L Third-Party Costs
        • 218.03 M Post Defeasance Closing Date
    • Section 219
      Delinquency Reporting and Certification
    • Section 220
      Reporting Collateral Balances in Custodial Accounts
      • 220.01 P&I Custodial Accounts
      • 220.02 Letters of Credit as Collateral
      • 220.03 Report on Fair Value Basis
      • 220.04 What to Report
      • 220.05 When to Report
    • Section 221
      Internal Revenue Service Reporting Requirements
      • 221.01 What to Report
      • 221.02 Filing IRS Form 1099 MISC
      • 221.03 Notifying the Internal Revenue Service about Abandonments or Acquisitions (IRS Form 1099-A)
        • 221.03 A When Required
        • 221.03 B Preparing IRS Form 1099-A
      • 221.04 Notifying the Internal Revenue Service about Cancellations of Indebtedness (IRS Form 1099-C)
        • 221.04 A When Required
        • 221.04 B Determining When a Debt Is Cancelled
        • 221.04 C Preparing IRS Form 1099-C
        • 221.04 D Exceptions to IRS Form 1099-C Reporting
        • 221.04 E Coordination with Reporting Abandonments or Acquisitions
      • 221.05 Reporting via Magnetic Media
  • Chapter 3
    Custodial Accounts
    • Section 301
      Generally
      • 301.01 Maintenance
      • 301.02 Fannie Mae's Rights
      • 301.03 Eligible Depositories and Ratings
        • 301.03 A Eligible Depository
        • 301.03 B Verifying Depository Ratings
      • 301.04 Investments and Interest
      • 301.05 Clearing Accounts
      • 301.06 Liability
        • 301.06 A Losses
        • 301.06 B Overdrafts
    • Section 302
      Administration
      • 302.01 Notifications
      • 302.02 Titling
      • 302.03 Deposits
    • Section 303
      P&I Custodial Accounts
      • 303.01 Accounts and Deposits
      • 303.02 Withdrawals
    • Section 304
      T&I Custodial Accounts
      • 304.01 Deposits
      • 304.02 T&I Impositions
      • 304.03 Shortfalls
      • 304.04 Prohibited Uses
      • 304.05 No Financing for T&I Impositions
    • Section 305
      Collateral Agreement Custodial Accounts
      • 305.01 Deposits
      • 305.02 Full Disbursement
    • Section 306
      Clearing Accounts
    • Section 307
      Drafting Accounts
      • 307.01 Establishing Drafting Accounts
      • 307.02 Consolidated Custodial Accounts
    • Section 308
      Recordkeeping and Reconciliations
      • 308.01 Account Analysis and Reconciliation
      • 308.02 Records
      • 308.03 For T&I Custodial Accounts
      • 308.04 Borrower's T&I Impositions and Custodial Accounts
        • 308.04 A Analysis Timing
        • 308.04 B Insufficient Funds
        • 308.04 C Surplus
      • 308.05 Annual Statements
  • Chapter 4
    Asset Management: Loan Document Administration
    • Section 401
      Servicing Requirements
      • 401.01 General
      • 401.02 Monitoring Compliance with Loan Documents
    • Section 402
      Delegation of Decision-Making Authority; Retention of Outside Legal Counsel
      • 402.01 Delegation of Decision-Making Authority
      • 402.02 Retention of Outside Legal Counsel
    • Section 403
      Execution of Documents by Servicer – Limited Power of Attorney
    • Section 404
      Execution of Documents by Fannie Mae
      • 404.01 Submission of Documents to Fannie Mae
      • 404.02 Servicer Certification When Fannie Mae Approval Is Not Required
      • 404.03 Servicer Certification When Fannie Mae Approval Is Required
    • Section 405
      Fees Due to Fannie Mae
    • Section 406
      Follow-Up Actions by the Servicer
    • Section 407
      Subordinate Financing
      • 407.01 Non-Fannie Mae Subordinate Financing
      • 407.02 Prerequisite for Subordinate Financing
      • 407.03 Fees for Subordinate Financing
      • 407.04 Submitting the Request for Subordinate Financing
      • 407.05 Fannie Mae Approval and Execution
      • 407.06 Subsequent Servicer Actions
    • Section 408
      Administration of Collateral Agreements
      • 408.01 General Administrative Requirements
        • 408.01 A Administration of Funds
        • 408.01 B Funds to be Held in a Custodial Account
        • 408.01 C Use of Funds
        • 408.01 D Funds as Additional Security for Mortgage Loan
        • 408.01 E Servicer’s Fees and Costs
        • 408.01 F Waiver or Modification of Terms of Collateral Agreement
      • 408.02 Achievement Agreement or Other Agreement for Additional Collateral
        • 408.02 A General
        • 408.02 B Releases or Reductions in Collateral
        • 408.02 C Draws on Letters of Credit or Application of Other Collateral
        • 408.02 D Releasing Additional Escrows for Principal and Interest, Taxes and Insurance, and Replacement Reserves
      • 408.03 Completion/Repairs
        • 408.03 A General
        • 408.03 B Extensions for Completion/Repairs
        • 408.03 C Completion/Repair Loan Document Amendments
        • 408.03 D Servicer’s Administrative Requirements
        • 408.03 E Processing Borrower Requisitions
        • 408.03 F Inspections
        • 408.03 G Fees
        • 408.03 H Completion/Repair Defaults
        • 408.03 I Green Rewards Efficiency Measure Verification
      • 408.04 Replacement Reserve
        • 408.04 A General
        • 408.04 B Replacement Reserve Loan Document Amendments
        • 408.04 C Servicer’s Administrative Requirements
        • 408.04 D Modifications to Replacement Reserve Deposits
        • 408.04 E New Property Condition Assessments
        • 408.04 F When Replacement Reserve Funding Was Partially or Fully Waived
        • 408.04 G Interest on Replacement Reserve Funds
        • 408.04 H Items Eligible for Funding from the Replacement Reserve
        • 408.04 I Items Not Eligible for Funding from the Replacement Reserve
        • 408.04 J Processing Borrower Requisitions
        • 408.04 K Inspections
        • 408.04 L Fees
        • 408.04 M Replacement Reserve Defaults
        • 408.04 N Return of Replacement Reserve Funds to Borrower
        • 408.04 O Alternative Funding of Replacement Reserves for Portfolio Mortgage Loans
    • Section 409
      Interest Rate Hedge Requirements
      • 409.01 General
      • 409.02 Interest Rate Hedge Coverage
        • 409.02 A Bond Credit Enhancement Transactions
        • 409.02 B Structured Transactions
        • 409.02 C All Hedges
      • 409.03 Interest Rate Hedge Term
      • 409.04 Lien Filings and Collateral
      • 409.05 Borrower Payments
        • 409.05 A Interest Rate Caps
        • 409.05 B Interest Rate Swaps
      • 409.06 Provider Ratings
      • 409.07 Replacement Interest Rate Hedge and Notification
      • 409.08 Replacement Interest Rate Hedge Documents and Follow Up
    • Section 410
      Ground Leases
    • Section 411
      Notice of Lien or Noncompliance with Applicable Laws, Ordinances and Regulations
    • Section 412
      Property Forfeitures and Seizures
    • Section 413
      Property and Liability Insurance
      • 413.01 Property and Liability Insurance
      • 413.02 No Financing for Property and Liability Insurance Premiums
      • 413.03 Flood Map Changes; Obtaining Flood Insurance
      • 413.04 Lender Placed Insurance
        • 413.04 A Property and Liability Insurance
        • 413.04 B Flood Insurance
        • 413.04 C Servicer’s Administrative Costs and Expenses
    • Section 414
      Casualty Losses – Performing Mortgage Loans
      • 414.01 Notice
      • 414.02 Filing Proof of Loss
      • 414.03 Casualty Loss Assessment
      • 414.04 Required Casualty Loss Property Inspection
      • 414.05 Documentation for Required Casualty Loss Property Inspections
      • 414.06 Endorsement of Insurance Loss Draft or Check When Payable to Fannie Mae
      • 414.07 Endorsement of Insurance Loss Draft or Check When Not Payable to Fannie Mae
      • 414.08 Insurance Loss Draft or Check Not Payable to Either Fannie Mae or Servicer
      • 414.09 Application of Insurance Loss Proceeds
        • 414.09 A Fannie Mae Determination Required
        • 414.09 B Disposition of Insurance Loss Proceeds
      • 414.10 Property Restoration Requirements
      • 414.11 Commencement of Repair/Restoration Work
      • 414.12 Disbursements
        • 414.12 A Prerequisites for Disbursement of Funds
        • 414.12 B Disbursing Funds
        • 414.12 C Content of Disbursement Request
        • 414.12 D Disbursement Amount
        • 414.12 E Final Disbursement; Notice to Fannie Mae
        • 414.12 F Documentation in Servicing File
      • 414.13 Borrower’s Failure to Diligently Pursue Repair
      • 414.14 Reimbursement of Administrative Costs
    • Section 415
      Casualty Losses – Non-Performing Mortgage Loans
    • Section 416
      Credit Facilities and Bulk Deliveries
      • 416.01 General
      • 416.02 Delegation of Decisions
        • 416.02 A Decisions and Actions Not Delegated
        • 416.02 B Decisions Delegated by the Delegated Transaction Form 4636 series
        • 416.02 C Other Delegated Decisions
      • 416.03 Approval Requests
      • 416.04 Release and Substitution Requests
      • 416.05 Borrow-Up (Future Advance) Requests
      • 416.06 Facility Revaluations
      • 416.07 Supplemental Mortgage Loans Not Permitted
      • 416.08 Additional Information
    • Section 417
      Seniors Housing Properties
      • 417.01 General
      • 417.02 Decisions and Actions Delegated and Not Delegated
      • 417.03 Approval Requests
      • 417.04 Seniors Housing Expansion/Conversion Requests
        • 417.04 A Permitted Purpose
        • 417.04 B Submission Requirements
        • 417.04 C Requirements and Monitoring
        • 417.04 D Construction Completion Requirements
        • 417.04 E Request Changes in Unit Count/Mix in the MAMP
    • Section 418
      Credit Enhancement Mortgage Loans and Multifamily Affordable Housing Properties
      • 418.01 Bond Transactions and Credit Enhancement Mortgage Loans
      • 418.02 Compliance Issues Relative to Bond Credit Enhancement Transactions
      • 418.03 Monitoring Compliance; Notification of Noncompliance
        • 418.03 A Affordable Regulatory Agreement
        • 418.03 B Default Notice for Failure to Comply with the Bond Documents
      • 418.04 Multifamily Affordable Housing (MAH) Properties
      • 418.05 Low-Income Housing Tax Credits
      • 418.06 Enhanced Resident Services
      • 418.07 Expanded Housing Choice
      • 418.08 HAP Contract Approval and Releasing Restabilization Reserve
    • Section 419
      MH Communities with Tenant Site Lease Protections
    • Section 420
      Single Asset Entity Conversion
    • Section 421
      Loan Document Amendments
    • Section 422
      Maturing Mortgage Loans
      • 422.01 Written Policy
      • 422.02 Refinance Eligibility
      • 422.03 Borrower Communications
      • 422.04 Fannie Mae Communications
  • Chapter 5
    Surveillance
    • Section 501
      Generally
    • Section 502
      Property Inspections
      • 502.01 Forms
      • 502.02 Property Condition Concerns
      • 502.03 Property Inspection Protocol
      • 502.04 Scheduling and Submissions
        • 502.04 A Scheduling
        • 502.04 B Submissions
      • 502.05 Property Inspectors
        • 502.05 A Qualifications
        • 502.05 B Third Parties
      • 502.06 Content
        • 502.06 A Unit Selection
        • 502.06 B Photos
        • 502.06 C Interviews
        • 502.06 D Market Analysis
        • 502.06 E Collateral Analysis
        • 502.06 F Life Safety Issues
      • 502.07 Quality Control
        • 502.07 A Program
        • 502.07 B Inspection Form Retention
        • 502.07 C Additional Inspections and Fees
    • Section 503
      Financial Analysis of Operations
      • 503.01 Reporting
      • 503.02 Quarterly Financial Analysis of Operations
      • 503.03 Annual Financial Analysis of Operations
        • 503.03 A Reporting Period
        • 503.03 B Submission
        • 503.03 C Annual Review
      • 503.04 Waiver Request
    • Section 504
      Loan Agreement Compliance
      • 504.01 Generally
      • 504.02 Financial Reports and Information
        • 504.02 A Borrower and Guarantor Notices
        • 504.02 B Borrower Fails to Provide Guarantor Financial Reports
        • 504.02 C Review Financial Reporting
        • 504.02 D Records
    • Section 505
      OFAC Compliance
  • Chapter 6
    Watchlist Management
    • Section 601
      Servicer Watchlist
      • 601.01 Submission
      • 601.02 Actions
    • Section 602
      Fannie Mae's Watchlist
    • Section 603
      Action Plans
      • 603.01 Primary Risk Mortgage Loans
      • 603.02 Secondary Risk Mortgage Loans
      • 603.03 Defaulted Mortgage Loans
    • Section 604
      Servicer Fees
    • Section 605
      Fannie Mae Contractors
  • Chapter 7
    Non-Performing Mortgage Loans
    • Section 701
      Generally
    • Section 702
      Secondary Risk Mortgage Loans and Primary Risk Mortgage Loans
      • 702.01 Generally
      • 702.02 Secondary Risk Mortgage Loans
        • 702.02 A Definition
        • 702.02 B Lender is Special Servicer
        • 702.02 C Deemed Exhaustion of Recourse Obligation
      • 702.03 Primary Risk Mortgage Loans Defined
        • 702.03 A Definition
        • 702.03 B Fannie Mae is Special Servicer
    • Section 703
      Mortgage Loan Defaults
      • 703.01 Anticipatory Defaults
      • 703.02 Performance Defaults
        • 703.02 A Failure of Borrower to Perform
        • 703.02 B Service of Process
        • 703.02 C Lender Tenders for Minor or Immaterial Defaults
      • 703.03 Monetary or Payment Defaults
      • 703.04 Date of Default
        • 703.04 A Definition of Date of Default
        • 703.04 B Definition of Non-Performing Mortgage Loan
        • 703.04 C Partial Payments by Borrower Do Not Change Date of Default
      • 703.05 Late Charges and Default Interest
        • 703.05 A Timing for Imposition of Late Charges and Default Interest
        • 703.05 B Late Charges and Default Interest
        • 703.05 C No Deduction for Late Charges or Default Interest
        • 703.05 D Enforceability of Late Charges and Default Interest
    • Section 704
      Notice of Default; Reservation of Rights
      • 704.01 Notice of Default
        • 704.01 A Notice to Fannie Mae of Payment Default
        • 704.01 B Notice to Fannie Mae of Performance Default
        • 704.01 C Types of Performance Defaults
        • 704.01 D Contact with Borrower
        • 704.01 E Pre-Negotiation Letter
      • 704.02 Partial Payments; Late Payments
        • 704.02 A Partial Payments
        • 704.02 B Late Partial Payment
        • 704.02 C Full Payment After Expiration of Period Before Assessing Late Charges
        • 704.02 D Application of Partial Payments
        • 704.02 E Failure to Make Any Payment
        • 704.02 F Copies of Letters Sent to Borrower; Correspondence with Borrower
    • Section 705
      Capital Repairs and Protection of Property and Property Income
      • 705.01 Funding Capital Repairs During Default Resolution
        • 705.01 A Generally
        • 705.01 B Health and Safety Repairs
      • 705.02 Protection of Property Income
      • 705.03 Property Management Changes
        • 705.03 A Primary Risk Mortgage Loans
        • 705.03 B Secondary Risk Mortgage Loans
        • 705.03 C Approval Decision Criteria and Timing
        • 705.03 D Documenting the Property Management Change
    • Section 706
      Reinstatement; Calculation of Payoff Amount
      • 706.01 Reinstatement
        • 706.01 A Primary Risk Mortgage Loans
        • 706.01 B Secondary Risk Mortgage Loans
      • 706.02 Calculation of Payoff Amount
    • Section 707
      Non-Performing Primary Risk Mortgage Loans – Transfers to Fannie Mae Special Asset Management
      • 707.01 Transfer to Special Servicing
      • 707.02 Asset Review
    • Section 708
      Non-Performing Secondary Risk Mortgage Loans – Special Servicing
      • 708.01 Servicer Performs Loss Mitigation Actions
      • 708.02 Servicer Workout Action Template (“SWAT”)
        • 708.02 A Delivery of SWAT
        • 708.02 B Purpose of SWAT
        • 708.02 C Contents of SWAT
        • 708.02 D Fannie Mae Approves SWAT
        • 708.02 E Fannie Mae does not Approve SWAT
        • 708.02 F Updating SWAT
        • 708.02 G Failure to Timely Deliver SWAT
        • 708.02 H No Credit Against Recourse
    • Section 709
      Special Servicing of Primary Risk Mortgage Loans
      • 709.01 Fannie Mae Performs Loss Mitigation Actions
      • 709.02 Servicing Transfer Memo
    • Section 710
      Engagement of Legal Counsel
      • 710.01 Fannie Mae Retains Legal Counsel
      • 710.02 Primary Risk Mortgage Loans
      • 710.03 Secondary Risk Mortgage Loans
      • 710.04 Payment of Legal Counsel Fees
        • 710.04 A Primary Risk Mortgage Loans
        • 710.04 B Secondary Risk Mortgage Loans
    • Section 711
      Courses of Action
      • 711.01 Election and Implementation of a Course of Action
      • 711.02 Course of Action – Lender Purchase of Mortgage Loan
        • 711.02 A Primary Risk Mortgage Loans
        • 711.02 B Secondary Risk Mortgage Loans
        • 711.02 C Purchase Price for Mortgage Loans
        • 711.02 D No Fannie Mae Approval Required
        • 711.02 E Implementation of Course of Action
      • 711.03 Course of Action – Lender Workout Election
        • 711.03 A Lender Workout Defined
        • 711.03 B Documentation and Terms of Lender Workout
        • 711.03 C Lender Workout Has No Impact on Loss Sharing or Recourse Obligation
        • 711.03 D No Fannie Mae Approval Required
        • 711.03 E Servicer Makes Delinquency Advances But Fails to Report Mortgage Loan Delinquent
        • 711.03 F Foreclosure Process Continues Unless Otherwise Agreed to by Fannie Mae
      • 711.04 Course of Action – A Joint Workout
        • 711.04 A Joint Workout Defined
        • 711.04 B Delinquency Advances Must Be Made During Negotiation of Joint Workout
        • 711.04 C Joint Workout Process
        • 711.04 D Modification, Extension, and Forbearance Fees
        • 711.04 E Triggering Modification Fees; Other Fees
        • 711.04 F Foreclosure Process Continues Unless Otherwise Agreed to by Fannie Mae
      • 711.05 Course of Action - Foreclosure
        • 711.05 A Primary Risk Mortgage Loans
        • 711.05 B Secondary Risk Mortgage Loans
        • 711.05 C Deed-in-Lieu of Foreclosure
        • 711.05 D Management of Property Post Title Vesting in Fannie Mae
        • 711.05 E Deficiency Suits
      • 711.06 Course of Action – Note Sale Election or Discounted Loan Payoff
        • 711.06 A Note Sale and Discounted Loan Payoff Defined
        • 711.06 B Lender Ability to Bid
        • 711.06 C Any Note Sale or Discounted Payoff Gives Rise to Loss Sharing Event
        • 711.06 D Note Sale – Secondary Risk Mortgage Loans
        • 711.06 E Discounted Loan Payoff - Secondary Risk Mortgage Loans
    • Section 712
      Dual Track Approach
      • 712.01 Dual Track Approach Generally
      • 712.02 Waiver of Dual Track Approach
      • 712.03 Track One: Dialogue with the Borrower
        • 712.03 A Purpose of Track One
        • 712.03 B First 30 Calendar Days after a Default
        • 712.03 C Calendar Days 31 through 60 after a Payment Default or Performance Default
        • 712.03 D Cessation of Dialogue with the Borrower
      • 712.04 Track Two: Foreclosure Process
        • 712.04 A The Foreclosure Process
        • 712.04 B REO Management
      • 712.05 Description of Contractual Relationships
        • 712.05 A Two Contractual Relationships
        • 712.05 B No Disclosure of Lender’s Contract Terms to Borrower; Borrower Not a Third-Party Beneficiary of Lender Contract
        • 712.05 C Primary Risk Mortgage Loans
        • 712.05 D Secondary Risk Mortgage Loans
      • 712.06 Asset Audits for Secondary Risk Mortgage Loans
        • 712.06 A Purpose of Asset Audits
        • 712.06 B Personnel Performing Asset Audits
        • 712.06 C Timing of Asset Audits
        • 712.06 D Content of Asset Audits
        • 712.06 E Pre-Negotiation Letter
        • 712.06 F Special Requirements for the Environmental Assessment
      • 712.07 Dual Track Timeline
    • Section 713
      Loss Sharing and the Appraisal Process in connection with a Foreclosure Event
      • 713.01 General
        • 713.01 A Appraisal Required; Defined Terms
        • 713.01 B Compliance with Loss Sharing Addendum
        • 713.01 C Approved Appraisers
        • 713.01 D Appraisal Requirements
        • 713.01 E Appraisal Notice and Election of Appraisal Methodology
      • 713.02 Single Appraisal Approach
        • 713.02 A Single Appraisal Approach Timeline
        • 713.02 B Draft Appraisal Review
        • 713.02 C Acceptable Draft Appraisal
        • 713.02 D Non-Acceptable Draft Approach
      • 713.03 Dual Appraisal Approach
        • 713.03 A Dual Appraisal Approach Timeline
        • 713.03 B Average of Appraised Values
        • 713.03 C Third Appraisal
  • Chapter 8
    In Place Loans
    • Section 801
      Eligibility
    • Section 802
      Representations
Appendix
Glossary
Chapter 2

Reporting and Remitting

Section 201

Generally

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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s 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. .

Section 202

Collection, Tracking and Reporting of Monthly P&I Payments and T&I Amounts

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

Reporting Loan Activity and Security Balance

203.01

Use of Fannie Mae eServicing System

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.

203.02

Reporting Specific Transactions

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

Monthly Activity Reporting

203.03A

When to Begin Reporting

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. ).
203.03B

Cutoff Dates for Loan Activity Reporting

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. :

Monthly Activity Cutoff Date

Monthly Activity Report Due Date

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.

203.04

Monthly Securitized Mortgage Loan Security Balance Reporting

203.04A

Reporting Security Balances

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 each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. report that references:

  • the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. ; and
  • the Security Pool number.
203.04B

Same Month Pooling – Security Balance for First Reporting Cycle

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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less 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.

203.04C

Security Balances Due by Second Business Day

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must have transmitted all of its Security BalancesSecurity BalancesFor each MBS Pool, the Issue Date Principal Balance less 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.). .

203.04D

Failure to Meet Reporting Deadline

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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s Security BalancesSecurity BalancesFor each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. , and the beginning Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. used for the next month’s Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less any MBS principal distribution amounts included in previous MBS monthly remittances. within 10 days after publication by Fannie Mae.

203.05

Due Dates for Reports

The exact due date of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s submission of its reports depends on the type of transaction being reported.

203.05A

Removal Transactions

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

All Other Transactions

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.

203.06

Mortgage Loan Activity Record

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

Payment Collection

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 each MBS Pool, the Issue Date Principal Balance less 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

Fee Collection

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

Mortgage Loan Status

Mortgage LoanMortgage LoanMortgage 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.

203.07

Fannie Mae-Generated Monthly Reports

203.07A

MBS Mortgage Loan P&I Draft Report

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. .

203.07B

Cash Mortgage Loan P&I Draft Reports

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

Month-End Report

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.

203.08

Monthly MBS Mortgage Loan Reconciliations - Pool-to-Security Balance Reconciliations (Not Applicable to PFP MBS)

203.08A

Reconciliation Required

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 each MBS Pool, the Issue Date Principal Balance less 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)

PLUS

Prepaid Principal (as of current month)

MINUS

Delinquent Principal (as of current month)

MINUS

Scheduled Principal (as of current month)

PLUS

Principal Portion of Last Installment for Liquidated Mortgage Loan (as of current month)

 

Adjusted Principal Balance for Security Pool

MINUS

Ending Security Balance for Reporting Period

EQUALS

Difference

203.08B

Rounding Adjustment

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 each MBS Pool, the Issue Date Principal Balance less 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.

203.08C

Required Annual Adjustment to Correct Principal Balance vs. Security Balance Difference

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 each MBS Pool, the Issue Date Principal Balance less 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 each MBS Pool, the Issue Date Principal Balance less 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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s next monthly remittance.

2.  If Security Balance is Lower than UPB

If the Security BalanceSecurity BalanceFor each MBS Pool, the Issue Date Principal Balance less 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.

203.08D

Pool-to-Security Reconciliation Certification

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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s certification includes the identification and selection of a deficiency reason, and a statement of how it should be resolved.

Section 204

Calculation of Interest Due

204.01

Generally

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

Calculating Interest Due

The interest calculation method is generally specified in the Loan DocumentsLoan DocumentsAll executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  If the Loan DocumentsLoan DocumentsAll executed 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.

204.02A

Actual/360 Interest Calculation Method

Interest will accrue based upon the actual number of days in a calendar month and a 360-day year.

204.02B

30/360 Interest Calculation Method

Interest will accrue based upon a 30-day month and a 360-day year.

Section 205

ARM Loan Interest Rate and Monthly Payment Changes

205.01

Adjustable Rate Mortgage Loan Interest Rate Changes and Required Monthly Payments

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 executed 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 executed 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.

205.01A

The Adjustable Rate Mortgage Loan Index

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 executed 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.

205.01B

Determining the New Monthly Payment

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.

205.02

Monthly Reporting for ARM Loan Payment/Rate Changes

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

Structured ARM Loans

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 executed 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 executed 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 executed 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 executed 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 executed 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 executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Section 206

Application of Monthly Payments

206.01

Fannie Mae Form Loan Documents

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 market value of the Property as of a specific date, supported by the presentation and analysis of relevant market information. fees, environmental assessment costs, or PCAPCAAssessment of the current physical condition and historical operation of the Property. 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.
206.02

Non-Fannie Mae Form Loan Documents

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 executed 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

Payment Shortages

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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. or other monies due as required in the Loan DocumentsLoan DocumentsAll executed 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 V, Chapter 7: Non-Performing 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

Delinquency and Servicing Advances

208.01

Generally

208.01A

Applicability