Section 104

Ground Leased Properties

104.01

Generally

Requirements

If the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). has a Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. , 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. collateral must include a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the LeaseholdLeaseholdProperty held under a long-term lease or Ground Lease. estate.

You must ensure that the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis.  complies with the Ground Lease Review Checklist (Form 6479), unless

  • the ground lessor joins with the BorrowerBorrowerPerson who is the obligor per the Note. in executing the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. and grants a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on the ground lessor's fee estate, or
  • the absence of the LeaseholdLeaseholdProperty held under a long-term lease or Ground Lease. estate would not have a material adverse effect on the Property'sProperty'sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). operation or value.
104.02

Ground Lease Rents

Requirements

You must:

  • establish an escrow for ground rents;
  • ensure the BorrowerBorrowerPerson who is the obligor per the Note. deposits sufficient funds; and
  • make all payments due per the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. .
104.03

Ground Lease Estoppel Certificate

Requirements

You must obtain an executed Ground Lessor Estoppel Certificate (Form 6495). 

104.04

Ground Lease Review

Requirements

You must:

  • review and analyze the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. to ensure compliance with the requirements of this Section; and
  • retain the completed Form 6479 in your Servicing FileServicing FileYour file for each Mortgage Loan serviced. .