Section 106

Certificates of Occupancy

Requirements

For any PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). with construction or rehabilitation work completed within the last 12 months, you must:

  • ensure that all units have a certificate of occupancy;
  • obtain copies of all certificates of occupancy from the BorrowerBorrowerPerson who is the obligor per the Note. ; and
  • retain them in your Servicing FileServicing FileYour file for each Mortgage Loan serviced. .

For all other PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , you must:

  • determine whether each unit had a certificate of occupancy at some point;
  • attempt to obtain copies of all certificates of occupancy; and
  • retain them in your Servicing FileServicing FileYour file for each Mortgage Loan serviced. .

Guidance

If you are unable to obtain copies of certificates of occupancy for a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). (for example, because of the age of 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). or the records of the jurisdiction where it is located), you should look for other evidence that certificates of occupancy had been issued.

If you cannot obtain a copy or other sufficient evidence of a certificate of occupancy, you should analyze the risk to 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). if one had never been issued, by considering whether:

  • your physical inspection reveals any life safety issues;
  • all units are accessible through normal access routes (and not, for example, through a former janitorial closet);
  • the insurance excludes coverage of a casualty originating from a unit without a certificate of occupancy; and
  • 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). is located in a market that exhibits low vacancies and barriers to entry.

You should exclude the income generated by any units without a certificate of occupancy but include all expenses (including replacement reserves) for the maintenance of such units.