You must ensure 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). meets these minimum occupancy levels:
- 85% physical occupancy; and
- 70% economic occupancy.
These minimum levels apply on the Commitment DateCommitment DateDate a Commitment is confirmed by Fannie Mae per Part IV, Chapter 2: Rate Lock and Committing, Section 204: Commitments. 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.