Section 107

Phased Properties

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). is a Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. , you must evaluate

  • how 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). will be affected by other phases, and
  • 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). can succeed independently from other phases.

Guidance

In determining if a Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. is viable as a separate PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , you should consider if:

  • its ownership and operation are separate from all other phases of the complex;
  • the BorrowerBorrowerPerson who is the obligor per the Note. is able to provide a separate leasing office;
  • your underwriting has discounted any benefits derived from staff or facilities shared with other phases;
  • the records and accounts used to underwrite 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). are separate from those of other phases;
  • any cross-easements for the complex will survive an adverse action against another phase;
  • any development of a future phase could materially interfere with or disturb 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).
    • occupancy,
    • marketability,
    • or living environment; 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:
    • marketable to tenants or a new owner, separately from other phases;
    • visible to the public without passing through another phase of the complex; and
    • accessible from a public roadway.

In assessing the impact of future phases on 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). , you should consider:

  • the short-term impact of construction activity; and
  • long-term implications for the continued economic viability 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). , taking into account the allocation of costs for shared facilities (such as roadways).

Requirements

You may only DeliverDeliverSubmission 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. 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. on a Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. if Fannie Mae holds 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. secured by other phases of the complex.

When the Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. is owned or ControlledControlledPossessing, directly or indirectly, the power to direct or cause the management and operations of an entity (e.g., through the ownership of voting securities or other ownership interests, or by contract). by the same BorrowerBorrowerPerson who is the obligor per the Note. or PrincipalsPrincipalsPerson who owns or controls specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals, and Guarantors. as the other phases in the complex:

  • all Fannie Mae 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. on each phase must be cross-defaulted and cross-collateralized;
  • when any new Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. 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 underwritten, the actual amortizing DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. (per Form 4254.DEF) and current LTVLTVRatio of the actual aggregate UPB of the Mortgage Loan, plus any Pre-Existing Mortgage Loans, plus any Hard Preferred Equity, plus any Mezzanine Financing, to the value of the Property, expressed as a percentage.  for all existing 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. on each phase must comply with Form 4660 for the same loan term, product, and Pricing and Underwriting TierPricing and Underwriting TierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). , where each property value is determined by
    • dividing the current NCFNCFOn an annual basis or any specified period, the total Net Operating Income, minus the full amount underwritten for Replacement Reserve expense, regardless of whether deposits will be made (per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and… by the capitalization rate (i.e., a Direct Cap with Sales Comparables analysis),
    • broker's opinion of value, or
    • most recent AppraisalAppraisalWritten statement independently and impartially prepared by a qualified Appraiser stating an opinion of the Property's market value as of a specific date, and supported by the presentation and analysis of relevant market information. ; and
  • the new Phased PropertyPhased PropertyProperty that is one section of an existing or future complex and the Property is intended to be operated together with another property in the complex, and/or with shared access and amenities. 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. must have a Prepayment Premium Period End DatePrepayment Premium Period End DateLast date when a Borrower owes a Prepayment Premium for a voluntary Mortgage Loan prepayment. on or before the Prepayment Premium Period End DatePrepayment Premium Period End DateLast date when a Borrower owes a Prepayment Premium for a voluntary Mortgage Loan prepayment. 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. on the other phases.

Guidance

If a future phase is expected, consider issuing the first phase MBSMBSMortgage-Backed Security with a potential future cross.