Section 502
| 502.01 | |
|
|
|
The Mortgage Bankers Association (MBA) Standard Inspection Form must be used for all 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). inspections, unless a Catastrophic EventCatastrophic EventNatural or man-made hazard resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the natural environment such as earthquake, flood, terrorist attack and windstorm. has occurred, and the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must complete the Fannie Mae 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). inspection rating on the Fannie Mae Assessment Addendum (“Fannie Mae Assmt Addendum”) tab of the MBAMBAMortgage Bankers Association Standard Inspection Form. For any inspection after a Catastrophic EventCatastrophic EventNatural or man-made hazard resulting in an event of substantial extent causing significant physical damage or destruction, loss of life, or drastic change to the natural environment such as earthquake, flood, terrorist attack and windstorm. , the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must instead use the Multifamily Catastrophic Loss Inspection form (Form 4261).
The following tabs of the MBAMBAMortgage Bankers Association Standard Inspection Form must be completed for all 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). inspections:
- General Information Tab (“General Info”);
- Physical Condition & Deferred Maintenance Tab (“Physical Condition & DM”);
- Photos Tab (“Photos”);
- Rent Roll Tab (“Rent Roll”);
- Maps Tab (“Maps”);
- Management Interview Tab (“Mgmt Interview”);
- Multifamily Tab (“Multifamily”);
- Fannie Mae Assessment Addendum (“Fannie Mae Assmt Addendum”); and
- For Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. properties only: Seniors Supplement Tab (“Senior Supplement”).
Regardless of whether or not 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. is listed on either the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). WatchlistWatchlistMortgage Loan or Property exhibiting heightened credit risk as identified by the Lender or Fannie Mae. or the Fannie Mae WatchlistWatchlistMortgage Loan or Property exhibiting heightened credit risk as identified by the Lender or Fannie Mae. , the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must inform Multifamily InspectionsMultifamily InspectionsTeam that can be contacted at [email protected] and Multifamily WatchlistMultifamily WatchlistTeam that can be contacted at [email protected] within 10 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after becoming aware of any 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. with:
- a 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). inspection rating of 4 or 5 as shown on the Fannie Mae Assessment Addendum (“Fannie Mae Assmt Addendum”) tab of the MBAMBAMortgage Bankers Association Standard Inspection Form;
- 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). repairs required by the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. not completed timely;
- any significant deferred maintenance;
- any non-significant deferred maintenance that has not been corrected within 12 months after notifying the BorrowerBorrowerPerson who is the obligor per the Note. of such maintenance obligation; or
- life safety concerns.
In addition, if any of the above 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). condition concerns are present, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must:
- reinstate any suspended requirements for the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account established by the Lender and initially funded by an escrow deposit from the Borrower on the Mortgage Loan Origination Date to complete Completion/Repairs or other capital improvements at the Property. or the Replacement ReserveReplacement ReserveCustodial Account established by the Lender and funded by deposits from the Borrower over the term of the Mortgage Loan to fund the replacement of capital items at the Property. unless the rating of 4 or 5 results from a casualty loss (see Part V, Chapter 5: Surveillance, Section 502.06F: Analysis of Collateral);
- inspect 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). as frequently as necessary to ensure the BorrowerBorrowerPerson who is the obligor per the Note. is resolving outstanding deferred maintenance items; and
- prior to ordering a PCAPCAAssessment of the current physical condition and historical operation of the Property. (excluding regularly-scheduled PCAsPCAsAssessment of the current physical condition and historical operation of the Property. required by the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. ), submit a written request for approval to Multifamily WatchlistMultifamily WatchlistTeam that can be contacted at [email protected] .
The frequency of required 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). inspections depends on the following:
- 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. ’s Fannie Mae risk rating;
- 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. amount at the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; and
- other criteria outlined in the table below.
|
PROPERTY INSPECTION PROTOCOL |
||||||
|---|---|---|---|---|---|---|
|
Protocol if Original Mortgage Loan Amount is Greater than $30,000,000 |
||||||
|
Mortgage Loan Type |
Fannie Mae Mortgage Loan Rating |
Inspection Frequency |
Min % of Total Units to be Inspected1 |
Min/Max Number of Units to be Inspected2 |
Min Required Photos |
Third-Party or In-House Inspector |
|
All Mortgage Loans, other than Seniors Housing Mortgage Loans and DUS Plus™ |
Pass or Special Mention |
Annual Full Inspection |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Substandard or Doubtful |
Annual Full Inspection |
10% |
10/20 | 15 | In-House Only |
|
Seniors Housing Mortgage Loans |
Pass or Special Mention |
Annual Full Inspection |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Substandard or Doubtful |
Annual Full Inspection |
10% |
10/20 |
15 |
In-House Only |
|
DUS Plus |
All Ratings |
Annual Full Inspection |
10% (max of 20 units) |
10/20 |
15 |
In-House Only |
| Protocol if Original Mortgage Loan Amount is Greater than $6,000,000 and up to $30,000,000 | ||||||
|
(NOTE: When the inspection protocol below is based, in part, on the DSCR, the DSCR must be based on the most recent annual financial statement submitted to Fannie Mae. A Property with a most recent inspection rating of 4 or 5 must have an Annual Full Inspection, regardless of the DSCR test outlined below.)
|
||||||
|
Mortgage Loan Type |
Fannie Mae Mortgage Loan Rating |
Inspection Frequency |
Min % of Total Units to be Inspected1 |
Min/ Max Number of Units to be Inspected2 |
Min Required Photos |
Third-Party or In-House Inspector |
|
All Mortgage Loans other than Seniors Housing Mortgage Loans and DUS Plus |
Pass or Special Mention; 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. > 1.35 or CoopCoopMultifamily residential property owned by a Cooperative Organization. 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. > 1.00 |
Full Inspection every 2 years; Annual Full Inspection if current year 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. not available |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Pass or Special Mention; 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. < 1.35 or CoopCoopMultifamily residential property owned by a Cooperative Organization. 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. < 1.00 |
Annual Full Inspection |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Substandard or Doubtful |
Annual Full Inspection |
10% |
10/20 |
15 |
In-House Only |
|
Seniors Housing Mortgage Loans |
Pass or Special Mention |
Annual Full Inspection |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Substandard or Doubtful |
Annual Full Inspection |
10% |
10/20 |
15 |
In-House Only |
|
DUS Plus |
All Ratings |
Annual Full Inspection |
10% |
10/20 |
15 |
In-House Only |
|
All Maturing Mortgage Loans |
All Ratings |
Full Inspection due within the 12 months prior to Maturity DateMaturity DateDate all amounts due and owing under the Mortgage Loan become fully due and payable per the Loan Documents. 1,2 |
Follow requirements for applicable 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. type. |
|||
|
Protocol if Original Mortgage Loan Amount is $6,000,000 or Less |
||||||
|
Mortgage Loan Type |
Fannie Mae Mortgage Loan Rating |
Inspection Frequency |
Min % of Total Units to be Inspected1 |
Min/Max Number of Units to be Inspected2 |
Min Required Photos |
Third-Party or In-House Inspector |
|
All Mortgage Loans other than Seniors Housing Mortgage Loans |
Pass or Special Mention, and original 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. amount < $750,000 |
Walk Around every 5 years |
N/A |
N/A |
10 |
Third-Party or In-House |
|
|
Pass or Special Mention, and original 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. amount $750,000 to $3,000,000 |
Full Inspection every 2 years |
5% |
2/5 |
10 |
Third-Party or In-House |
|
|
Pass or Special Mention, and original 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. amount <$3,000,001 and <$5,000,000 in Eligible MSAs |
Full Inspection every 2 years |
5% |
2/5 |
10 |
Third-Party or In-House |
|
|
Substandard or Doubtful, and original 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. amount < $3,000,001 ($5,000,000 in Eligible MSAs) |
Annual Full Inspection |
10% |
2/5 |
10 |
In-House Only |
|
Seniors Housing Mortgage Loans |
Pass or Special Mention |
Annual Full Inspection |
5% |
5/15 |
15 |
Third-Party or In-House |
|
|
Substandard or Doubtful |
Annual Full Inspection |
10% |
10/20 |
15 |
In-House Only |
|
All Maturing Mortgage Loans |
All Ratings |
Full Inspection due within 12 months prior to Maturity DateMaturity DateDate all amounts due and owing under the Mortgage Loan become fully due and payable per the Loan Documents. 3 |
Follow requirements for applicable 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. type. |
|||
|
1 The number of units to be inspected based on the Minimum Percentage Requirement should not exceed the Maximum Number of Units.
2 For a Property with 10 units or less, the minimum number of units to be inspected is 2 units. This minimum unit count is for occupied and vacant units. If the Property contains any “down” units, then all “down” units must be inspected in addition to the occupied and vacant units.
3 If the next scheduled inspection due date for a Property is less than six months prior to the Maturity Date, then the next scheduled inspection due date shall be that date which is six months prior to the Maturity Date.
|
||||||
|
NOTE: If a Property consists of Non-Contiguous Parcels or scattered sites:
|
||||||
| 502.04A | |
|
|
|
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). inspections must be performed at the frequency per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocols, and must be completed in sufficient time for 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). inspection form to be submitted by the “Submission Due Date”.
To facilitate more efficient scheduling of the physical inspections for PropertiesPropertiesMultifamily 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). , the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). may request an extension of up to 60 days from the “Submission Due Date”. The extension request will be automatically approved so long as:
- it is submitted prior to the original “Submission Due Date” by using the “Modification Request” tab within the particular work item in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, and requested modifications; asset management reports; and data corrections related to loan or property level attributes. ;
- an extension was not already granted for the same 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). inspection requirement;
- 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.
is not rated Substandard or Doubtful, nor has a 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).
condition rating of:
- 4 or 5 on the most recent inspection; or
- 3 on an inspection more than one year old; and
- the extended “Submission Due Date” is not within the 6 months prior to the Maturity DateMaturity DateDate all amounts due and owing under the Mortgage Loan become fully due and payable per the Loan Documents. .
All 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). inspection forms must be submitted to Fannie Mae through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, and requested modifications; asset management reports; and data corrections related to loan or property level attributes. . Origination inspections must be submitted within 45 days after the date 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. was purchased by Fannie Mae. Thereafter, each required 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). inspection form must be submitted within 60 days after the date of the actual 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). inspection, and no later than the “Submission Due Date” shown in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, and requested modifications; asset management reports; and data corrections related to loan or property level attributes. , unless an extension was granted by Fannie Mae. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must resolve any issues identified by Fannie Mae during its review of 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). inspection reports in a timely manner.
| 502.05A | |
|
|
|
Inspections must be performed by either a qualified third party or ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). staff as specified in 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). Inspection Protocol table in Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocols. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). is responsible for ensuring that the inspector has at least the minimum level of experience required to conduct a Fannie Mae inspection. At a minimum, the inspector must have completed an acceptable “Property Inspection Risk Management” course or other acceptable training course, including the courses provided by the MBAMBAMortgage Bankers Association , and must have previous inspection experience as follows:
| Mortgage Loan Rating | Minimum Previous Inspection Experience |
| Pass and Special Mention Mortgage Loans (except Seniors Housing Mortgage Loans) | 10 multifamily property inspections |
| Substandard and Doubtful Mortgage Loans (except Seniors Housing Mortgage Loans) | 25 multifamily property inspections |
| Seniors Housing Mortgage Loans | 10 Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. property inspections |
If 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). Inspection Protocol table in Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocols permits a third-party inspector, the third-party inspector cannot reassign responsibilities to another person or entity without the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). ’s approval. Any third-party inspector must:
- have no financial interest in 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). to be inspected;
- demonstrate experience in multifamily real estate property inspections;
- be experienced in the market in which 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). is located; and
- either:
- possess a professional certification from any one of the following:
- Real Estate Assessment Center for HUDHUDU.S. Department of Housing and Urban Development as a Certified Home Inspector;
- American Society of Home Inspectors ("ASHI");
- International Association of Certified Home Inspectors ("InterNACHI"); or
- State certified home inspector;
- be a registered architect;
- be a civil engineer; or
- have successfully completed an acceptable in-person training course in lieu of the above. (Note: On-line attendance at such course is not acceptable.) Acceptable training courses include the Fannie Mae approved inspection course provided by the MBAMBAMortgage Bankers Association .
- possess a professional certification from any one of the following:
Fannie Mae reserves the right, in its sole discretion, to notify the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). that a third-party inspection firm is no longer acceptable to Fannie Mae.
The requirements specified in 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). Inspection Protocol table in Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocols are minimum numbers of occupied and vacant units that must be inspected. In addition to occupied and vacant units, all “down” units (i.e., units that are not rentable at the current time, or that cannot be rented in the normal course of business) must be inspected as part of 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). inspection. If 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). inspector notes substantial physical concerns that warrant further investigation, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must determine whether it is prudent to inspect additional units over and above the number of units required to be inspected.
The MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, and requested modifications; asset management reports; and data corrections related to loan or property level attributes. will indicate, for each 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). , the number of units required to be inspected. When units are required to be inspected, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must determine the appropriate combination of vacant and occupied units for inspection. The units selected for inspection must meet the following requirements:
- a minimum of 50% of all units inspected must be vacant units (if available);
- at least 2 occupied units must be inspected; and
- if selected, the interior of each unit must be inspected.
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). inspector, not 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). manager, must select which vacant and occupied units will be inspected.
| 502.06C | |
|
|
|
The Property Inspection Protocol table in Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocols indicates, for each Asset ClassAsset ClassType of Multifamily Property securing a Mortgage Loan (e.g., conventional, Seniors Housing, Manufactured Housing Community, Cooperative, etc.). , the minimum number of photographs required to be submitted with 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). inspection form. Such photographs must include views and identifying captions of:
- signage;
- typical building front;
- site office and clubhouse (if applicable);
- 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). frontage;
- apartment interior;
- amenities;
- major building systems;
- deferred maintenance and life safety items;
- extraordinary repair items or items requiring capital expenditure; and
- all critical or substantial issues noted in the inspection report.
For 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). inspections other than walk-around inspections, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must interview 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). manager and other on-site staff to obtain information regarding the Property'sProperty'sMultifamily 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). condition and performance, and to confirm that any life/safety repair and deferred maintenance items noted on the most recent 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). inspection have been corrected.
| 502.06E | |
|
|
|
The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must evaluate the neighborhood, submarket, and market in which 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). is located to determine material shifts in demographics and real estate conditions. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must also evaluate competitive properties to determine any changes in the competitive position of 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). since the initial underwriting or the most recent 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). inspection.
| 502.06F | |
|
|
|
If the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). determines that repair or maintenance is required, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must notify the BorrowerBorrowerPerson who is the obligor per the Note. according to the notice provisions of the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. . The notice must:
- be sent within 45 days from the date of the actual inspection;
- identify the repair or maintenance issues;
- include any accompanying photos; and
- direct the BorrowerBorrowerPerson who is the obligor per the Note. to undertake timely corrective actions to remedy the issues.
The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must follow-up until the work has been successfully completed. If the BorrowerBorrowerPerson who is the obligor per the Note. fails to perform all repairs or maintenance required by the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). within a specified period of time, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must notify Multifamily InspectionsMultifamily InspectionsTeam that can be contacted at [email protected] in writing with a recommendation for resolution.
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). inspection overall rating must be set to 4 (or 5 depending on severity or other existing issues), if:
- a casualty loss causes damage in an amount equal to the lesser of (i) 25% of the current UPBUPBUnpaid Principal Balance , or (ii) $1,000,000; or
- 10% or more of the units are down due to any reason.
Setting the rating to 4 (or 5, as applicable) will not automatically put 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. on Fannie Mae’s WatchlistWatchlistMortgage Loan or Property exhibiting heightened credit risk as identified by the Lender or Fannie Mae. , nor will it trigger the requirement (i) for an Action PlanAction PlanServicer’s report to Fannie Mae including detailed analysis of Mortgage Loan and Property issues, Servicer's strategy for resolving issues, and related actions and outcomes. ; or (ii) to reinstate the Replacement ReserveReplacement ReserveCustodial Account established by the Lender and funded by deposits from the Borrower over the term of the Mortgage Loan to fund the replacement of capital items at the Property. , as long as:
- no other performance related issues otherwise increase the credit risk; and
- the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). expects sufficient insurance proceeds will be available to restore 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). to its original condition.
If Fannie Mae determines that a 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). inspection is inadequate, Fannie Mae reserves the right to require a new 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). inspection be performed by either the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). or a third party designated by Fannie Mae at the expense of the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). .
| 502.06G | |
|
|
|
If the inspection is conducted by a third-party inspector and reveals any 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). life safety issues, the inspection firm must notify the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). of such issues within 3 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, a day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. after completion of the inspection.
| 502.07A | |
|
|
|
All 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). inspection forms, whether prepared by third parties or by the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). , must be reviewed internally by the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). prior to submission to Fannie Mae.
| 502.07B | |
|
|
|
ServicersServicersPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). are required to have a quality control program in place to annually review the quality of 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). inspections performed by third-party inspectors. The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). must be prepared to show the evidence and results of such quality control program to Fannie Mae upon request.
All 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). inspection forms must be maintained in the Servicing FileServicing FileFile for each Mortgage Loan serviced by the Lender. for at least 2 inspection cycles and made available for verification by Fannie Mae upon request.
In addition to performing 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). inspections required in this Section, Fannie Mae, in its sole discretion, may require that the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). perform additional 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). inspections whenever circumstances warrant. In addition, the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). is expected to perform 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). inspections as part of its regular asset management responsibilities whenever the ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). determines it prudent to do so.
The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). may charge the BorrowerBorrowerPerson who is the obligor per the Note. a reasonable fee for performing 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). inspections provided that charging a fee:
- is permitted under the Loan DocumentsLoan DocumentsAll documents evidencing, securing, or guaranteeing the debt obligation executed for a Mortgage Loan and approved by Fannie Mae. or another written agreement with the BorrowerBorrowerPerson who is the obligor per the Note. ; and
- is not specifically precluded by Fannie Mae.
| 502.10 | |
|
|
|
A new PCAPCAAssessment of the current physical condition and historical operation of the Property. is required during 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. term in the following circumstances:
|
If the Property... |
A new PCA must be performed... |
|
Secures a Mortgage Loan with a term of more than 10 years |
every 10 years, beginning in the 10th Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. . |
|
Is a Multifamily Affordable Housing property |
every 5 years, beginning in the 5th Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. . |
The ServicerServicerPrimary Person responsible for servicing the Mortgage Loan (e.g., the originator, the selling Lender, or a third-party servicer). may use Streamlined PCA Guidance (Form 4099.A) if the most recent 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). site inspection:
- was performed according to Part II, Chapter 4: Inspections and Reserves, Section 401: Site Inspection;
- indicated an overall rating of 1 or 2; and
- did not reveal any adverse change in 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). condition (except normal wear and tear) or life safety issues.