You must ensure that the PropertyPropertyMultifamily residential property securing the Mortgage Loan and including the land (or Leasehold interest in land), Improvements, and personal property (as defined in the Uniform Commercial Code). meets the following minimum occupancy levels:
- 85% physical occupancy; and
- 70% economic occupancy.
These minimum levels apply at the time of the CommitmentCommitmentContractual agreement between you and Fannie Mae where Fannie Mae agrees to buy a Mortgage Loan at a future date in exchange for an MBS, or at a specific price for a Cash Mortgage Loan, and you agree to Deliver that Mortgage Loan. and for the preceding 3-month period.
When calculating physical occupancy, you must only include tenants who
- physically occupy the unit, and
- have commenced paying rent.
You may include any tenant who:
- was under a standard lease for at least 6 months, then converted to a month-to-month lease when the lease expired; or
- is under a lease with a term of less than 6 months, if shorter-term leases
- are commonly accepted in the market area, and
- do not reflect weakness in the market.
You may include non-revenue producing units such as
- management units,
- employee occupied units,
- maintenance units, and
- model units.
Such units should not exceed what is usual and customary for stabilized properties in the market.