Chapter 4
| Section 401 | |
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| 401.01 | |
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This Chapter covers asset management of performing 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. . This Chapter does not apply to Non-Performing Mortgage LoansNon-Performing Mortgage LoansMortgage Loan with an uncured default. , unless otherwise stated. For asset management of Non-Performing Mortgage LoansNon-Performing Mortgage LoansMortgage Loan with an uncured default. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with:
- Part VI, Chapter 1: Watchlist Management; and
- either:
- Part VI, Chapter 3: Non-Performing Primary Risk Mortgage Loans; or
- Part VI, Chapter 5: Non-Performing Secondary Risk Mortgage Loans.
This Chapter covers the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. :
- administration of Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- review of a delegated and non-delegated BorrowerBorrowerPerson who is the obligor per the Note. request;
- approval of a delegated BorrowerBorrowerPerson who is the obligor per the Note. request;
- management of insurance matters;
- review of Transfer/AssumptionTransfer/AssumptionTransaction changing the ownership of the Borrower or Property. requests; and
- administration of specialty product types.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit all BorrowerBorrowerPerson who is the obligor per the Note. requests, along with any additional information and required documents, through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . If submitting through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. is not feasible, overnight mail must be used and sent to:
Fannie Mae
Attention: (Drawer AM, Structured AM, Seniors AM,
or Assumption/Transfer)
Mailstop 8V-21
1100 15th Street, NW
Washington, DC 20005.
Fannie Mae email addresses and contact information for notices required in this Chapter are located in the Glossary.
For each 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and facilitate compliance or take appropriate actions to address any instance of noncompliance. All Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and all other documents required to be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be maintained in accordance with the Program Rules.
In the event of any conflict between or among the requirements of the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. , and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the governing priority shall be, in order:
- Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. ;
- Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ; and
- GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
Fannie Mae delegates significant decision-making authority and responsibility to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to the extent specified in the Multifamily Asset Management Delegated Transaction Forms (Form 4636 series) (each, the “Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. ”), covering the following matters:
- Transfers/Assumptions (Form 4636.TA);
- Commercial Leases (Form 4636.CL);
- Condemnations (Form 4636.C);
- CondominiumCondominiumStatutorily established Property ownership regime where Condominium Documents designate: individual units for separate ownership; and common areas for shared use and joint ownership by the unit owners. /Cooperative Property Conversions (Form 4636.CC);
- Easements (Form 4636.E);
- Oil, Gas, or Mineral Rights Leases (Form 4636.OGL);
- Partial Releases of Collateral (Form 4636.PR);
- Property Management Changes (Form 4636.PM); and
- Use Conversions (Form 4636.UC).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must follow the instructions in the Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. , which will specify which matters are delegated and which are non-delegated. All delegated and non-delegated requests must be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , with the Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. and the required supporting documents.
A transaction memo must be submitted for any unusual matters not covered in the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , or matters that could materially affect Fannie Mae’s security interests, investment interests, or the interests of InvestorsInvestorsMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. in Securitized Mortgage LoansSecuritized Mortgage LoansMortgage Loan backing an MBS, PFP MBS, or REMIC. . Decision-making authority is more limited for Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , Bulk DeliveriesBulk DeliveriesStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. , and certain Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. Loan matters. Neither the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. nor Fannie Mae has the authority to waive any local, state, or federal law or regulation.
Fannie Mae often retains outside legal counsel to review non-delegated matters or other matters that require Fannie Mae’s legal review. In such instance, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower’sBorrower’sPerson who is the obligor per the Note. written agreement to pay the reasonable legal fees and expenses of Fannie Mae’s counsel before any legal work may commence.
If Fannie Mae outside counsel review is required or requested, the BorrowerBorrowerPerson who is the obligor per the Note. must pay the applicable legal fee, which will either be a fixed fee or an estimated fee depending on the type of request. For an estimated fee request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify the BorrowerBorrowerPerson who is the obligor per the Note. that the actual legal fee may be higher or lower than the estimate, depending on the ultimate scope of the request, and the time needed to resolve the issue.
Fannie Mae will:
- apprise the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of any likely increases in the estimated review fee;
- provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. the amount of the fee for any fixed fee request; and
- provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a summary invoice directly from Fannie Mae’s outside counsel.
Upon receipt of the invoice, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must arrange for payment of Fannie Mae’s legal fees. The legal fee must be collected from the BorrowerBorrowerPerson who is the obligor per the Note. before engaging Fannie Mae outside counsel.
Fannie Mae may provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. conferring the right to execute certain documents as attorney-in-fact on behalf of Fannie Mae. If granted, the actions authorized in the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. will be specifically limited, and allow the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to execute only those documents listed in the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. . To exercise the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must execute documents as “[Name of Servicer], as Attorney-in-Fact for Fannie Mae”. The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. designation as attorney-in-fact will be subject to review and renewal, and the power granted under the Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. may be revoked by Fannie Mae at any time. Requests for new and replacement Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. should be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. or as required by Part V, Chapter 4: Asset Management: Loan Document Administration, Section 401.01: General. As each Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. expires on a specified date according to its terms, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the expiration date and request a new Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. at least 30 days prior to the expiration date.
| Section 404 | |
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All documents requiring execution by Fannie Mae (clearly identified by Fannie Mae Loan NumberLoan Number10-digit number assigned by Fannie Mae to each Mortgage Loan. ) must be sent to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. . Fannie Mae will execute the documents without prior review if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. provides the certifications described in this Section.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must include directions for returning the documents, including:
- contact name;
- overnight delivery mailing address;
- phone number; and
- email address.
For any document submitted to Fannie Mae for execution when the servicing decision has been delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide written certification to Fannie Mae that:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has reviewed the proposed transaction, and approval by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is in compliance with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , any Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , and the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. ;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has approved the proposed transaction;
- no approval or waiver is required from Fannie Mae;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel has reviewed and approved all relevant documents associated with the transaction, and determined that those documents are sufficient to fully effectuate the transaction; and
- any material changes to Fannie Mae form Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. have been approved by Fannie Mae.
For any document submitted to Fannie Mae for execution when the servicing decision has not been delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide written certification to Fannie Mae that:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has reviewed the proposed transaction, and approval by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated under the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. ;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommends approval by Fannie Mae of the proposed transaction;
- any required waivers have been submitted by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. legal counsel has reviewed and approved all relevant documents associated with the transaction, and determined that those documents are sufficient to fully effectuate the transaction; and
- any material changes to Fannie Mae form Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. have been approved by Fannie Mae.
| Section 405 | |
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Certain fees may be due to Fannie Mae in connection with a BorrowerBorrowerPerson who is the obligor per the Note. servicing request. The specified fees are for typical requests; however, higher fees may be required for complicated or non-standard requests, or for other matters not specified in this Chapter. No later than 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. following receipt of any fee by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit to Fannie Mae, by wire transfer of immediately available funds, Fannie Mae’s portion of the fee. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the wire transfer confirmation number, wire date, and wire amount through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. immediately following each funds transfer, as follows:
ABA Number: 021 039 500
Telegraphic Abbreviation: FNMA/NYC
Account Number: 169220242
Note: Type of fee (e.g., Assumption/Transfer),
Fannie Mae Loan Number and Property Name
Attention: Trans code 507 - GL 747669921.
| Section 406 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must take all applicable actions required to fully effectuate the transaction, including:
- amending the recorded Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. or filed Uniform Commercial Code (UCCUCCUniform Commercial Code ) financing statements;
- updating 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). survey;
- obtaining an endorsement to the mortgagee’s title insurance policy showing no impairment of Fannie Mae’s LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. position, and dating down title to reflect any recorded amendment to the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- recording all applicable documents, and sending the required documents through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ;
- sending an executed original copy of any new or amended Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ;
- following the requirements of Part V, Chapter 3: Custodial Accounts, Section 301: Generally if changes are required to any existing Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. , or if any new Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. must be established in connection with the transaction;
- retaining copies of all documents, correspondence, and any internal notes or analysis relating to the transaction in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
- taking any other actions the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or its legal counsel determines are necessary.
| Section 407 | |
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A Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is generally not permitted unless it complies with Fannie Mae’s requirements. Approval of any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and must be approved in advance by Fannie Mae. Additionally:
- with respect to any Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must abide by the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , and any Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. , provided that the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. will control in the case of any conflict;
- unless the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not permit the BorrowerBorrowerPerson who is the obligor per the Note. , without prior Fannie Mae approval, to incur the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. or allow a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. securing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. to be placed against 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 the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. without the approval of the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. , the consent of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae is not required; however, notice of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. and a copy of any documents must be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ;
- the BorrowerBorrowerPerson who is the obligor per the Note. and the subordinate lender must enter into and record the appropriate Subordination Agreement (Form 6414 or Form 6456 for the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; Form 4503 or Form 4507 for the 4000 Series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ); and
- the proceeds of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must benefit 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). (i.e., cash-out financing is not permitted).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. in writing upon learning of any unauthorized additional unsecured debt or indebtedness secured by a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. on 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 of any pledge of ownership interests that is not permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and send the BorrowerBorrowerPerson who is the obligor per the Note. a Reservation of Rights Letter (Form 4804) with a copy submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Fannie Mae will determine whether to approve the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , or exercise its remedies.
Part III, Chapter 14: Supplemental Mortgage Loans, contains the requirements for Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , and Part III, Chapter 7: Multifamily Affordable Housing Properties contains additional requirements for subordinate financing with respect to a Multifamily Affordable Housing PropertyMultifamily Affordable Housing PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure adherence to all applicable requirements.
The BorrowerBorrowerPerson who is the obligor per the Note. must pay the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. a $2,500 review fee. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may increase or decrease its fee at its discretion. No Fannie Mae review fees are due. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may also seek reimbursement from the BorrowerBorrowerPerson who is the obligor per the Note. for all reasonable out-of-pocket costs, including reasonable legal fees incurred by Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. counsel.
If Fannie Mae outside counsel is engaged, the BorrowerBorrowerPerson who is the obligor per the Note. must pay its fee, estimated at $2,500 for Subordinate Financing requests. The actual legal fee may be higher or lower, depending on the ultimate scope of the request and the time necessary to resolve. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will receive a summary invoice directly from Fannie Mae outside counsel and must arrange for payment. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be apprised of any likely increases in the estimated review fee. The estimated legal fee must be collected from the BorrowerBorrowerPerson who is the obligor per the Note. before engaging Fannie Mae outside counsel.
Any BorrowerBorrowerPerson who is the obligor per the Note. request for approval of a Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. must be reviewed by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . If acceptable, the request must be submitted for approval through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. in accordance with the following:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the request to Fannie Mae at least 30 days before the projected closing date of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ; and
- the submission must contain:
- an 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. (obtained at the Borrower’sBorrower’sPerson who is the obligor per the Note. cost), dated no earlier than 90 days prior to the date of the BorrowerBorrowerPerson who is the obligor per the Note. request for approval of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , that complies with Part II, Chapter 2: Valuation and Income, Section 202: Appraisal and Valuation;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting spreadsheet showing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ’s effect on 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). income, expenses, 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…, 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. , and 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. ;
- a copy of the final, unsigned loan documents evidencing the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. , with the loan amount, interest rate, payment schedules, and all other transaction related information completed;
- the MBAMBAMortgage Bankers Association
Standard Inspection Form documenting a physical inspection 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).
, performed at Borrower’sBorrower’sPerson who is the obligor per the Note.
expense, occurring no earlier than 90 days before the date of the BorrowerBorrowerPerson who is the obligor per the Note.
request for the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property.
; provided that, if the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
inspection 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).
reveals that 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 not being properly maintained, the BorrowerBorrowerPerson who is the obligor per the Note.
request will not be approved by Fannie Mae unless:
- a Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is sufficiently funded; and
- the BorrowerBorrowerPerson who is the obligor per the Note. makes any Immediate Repairs identified by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. prior to the closing date of the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. ; and
- a title policy endorsement for 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). showing no unauthorized LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. or encumbrances of any nature against 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). .
For a Cooperative PropertyCooperative PropertyMultifamily residential property owned by a Cooperative Organization. , the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. is unacceptable if the potential increase in the Cooperative Maintenance FeeCooperative Maintenance FeePeriodic fee assessed each shareholder or owner of a Cooperative Organization to fund costs and expenses associated with ongoing operations of the Cooperative Property. necessary to cover P&IP&IPrincipal and interest on the Subordinate LoanSubordinate LoanMultifamily residential real estate loan secured by a Lien against the Property having a lesser priority than the Lien securing another multifamily residential real estate loan on the same Property. exceeds 10% of the current Cooperative Maintenance FeeCooperative Maintenance FeePeriodic fee assessed each shareholder or owner of a Cooperative Organization to fund costs and expenses associated with ongoing operations of the Cooperative Property. .
Fannie Mae will provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a written decision regarding the BorrowerBorrowerPerson who is the obligor per the Note. request, after which the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify the BorrowerBorrowerPerson who is the obligor per the Note. in writing and retain the notice in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 407.06 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- not permit any changes to the form Subordination Agreement (Form 6414 orForm 6456 for the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; Form 4503 or Form 4507 for the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ) without the prior written consent of Fannie Mae;
- obtain a satisfactory title policy endorsement effective as of the date of recordation of the subordinate security instrument that:
- insures the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. as senior to the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the subordinate security instrument; and
- reflects the recordation of the Subordination Agreement;
- submit a copy of the recorded Subordination Agreement through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ; and
- send the original executed copy of the recorded Subordination Agreement and the title policy endorsement to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain copies of each in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| Section 408 | |
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| 408.01A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- administer and manage funds or collateral under all Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; and
- ensure that any disbursements of funds, or other collateral releases or reductions, are:
- approved only for valid reasons;
- appropriately documented; and
- consistent with the provisions of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. and this Section.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deposit funds held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets the requirements of Part V, Chapter 3: Custodial Accounts.
| 408.01C | |
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Funds must be used only for the purposes stated in the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and must not supplement a partial P&IP&IPrincipal and interest payment or cover any other BorrowerBorrowerPerson who is the obligor per the Note. obligation unrelated to the primary purposes of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
All funds or other collateral held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. constitute additional security for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations under the NoteNoteInstrument evidencing a Mortgage Loan obligation, including Form 6010 series, any other Fannie Mae-approved note, and all applicable addenda, schedules, and exhibits. and the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . In the event of a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Fannie Mae reserves the right to apply (or direct the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to apply) the funds or other collateral held under any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. in any manner allowed under the terms of such Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Following a default, unless instructed by Fannie Mae, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not:
- release any funds or other collateral held under a Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- apply any funds or collateral to the repayment of 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. ; or
- reimburse itself from such funds or collateral for any expenses or losses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
| 408.01E | |
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If the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. contemplates the payment of fees or costs by the BorrowerBorrowerPerson who is the obligor per the Note. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain such fees or costs for its own account, adhering to any specific billing provisions of the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Any fees or costs retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be reasonable in relation to the nature and scope of the services provided by or on behalf of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use any of the funds or other collateral held under the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. to cover such fees or costs. However, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may deduct such fees or costs from any disbursement of funds to the BorrowerBorrowerPerson who is the obligor per the Note. , provided such disbursements, fees, and costs are permitted under the Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , or if the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
Except as noted in this Chapter, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not waive or modify the terms of any Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
| 408.02A | |
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The provisions of this Section govern Achievement AgreementsAchievement AgreementsAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. and all Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , other than:
- Multifamily Loan AgreementsMultifamily Loan AgreementsAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. , including the Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…;
- Security InstrumentsSecurity InstrumentsInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- Replacement Reserve AgreementsReplacement Reserve AgreementsThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…; and
- Completion/Repair AgreementsCompletion/Repair AgreementsThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain an effective system for monitoring the expiration date of any Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , and ensure that all actions required to be taken pursuant to any such agreement have been timely performed and, if not timely performed, immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. .
Any request for a release or reduction of collateral must be processed in accordance with this Section, unless these instructions conflict with the terms and conditions of the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
1. General
If the BorrowerBorrowerPerson who is the obligor per the Note. has not satisfied the requirements for a release or reduction of collateral contained in the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not approve the BorrowerBorrowerPerson who is the obligor per the Note. request, and may decline the BorrowerBorrowerPerson who is the obligor per the Note. request without notice to Fannie Mae. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied the requirements of the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must recommend the release or reduction of collateral through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , accompanied by the supporting documentation listed below. Upon receipt and review of all pertinent information, Fannie Mae will approve or deny the request and notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its decision.
2. Supporting Documentation and Analysis
The following documentation must be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , and maintained in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , in connection with each request for a release or reduction of collateral
(a) Income and Expense Statements; Current Rent Roll
PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). income and expense statements and a current rent roll must be obtained from, and certified by, the BorrowerBorrowerPerson who is the obligor per the Note. . The statements must cover the applicable period required by the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. . Based on the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Parts I - III, the certified income and expense statements, and the current rent roll, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must develop a Net Cash FlowNet Cash FlowOn 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… estimate to determine whether the release or reduction provisions of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied. The income, vacancy, collection loss, and concession information should support the Effective Gross IncomeEffective Gross IncomeOn an annual basis or any specified period, the total of Net Rental Income plus other income per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is relying on in assessing whether a release or reduction is warranted.
In deriving its estimate of Effective Gross IncomeEffective Gross IncomeOn an annual basis or any specified period, the total of Net Rental Income plus other income per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and features in Part III. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust for:
- income that was not allowed or recognized in the original underwriting;
- the effect of a partial year’s performance when the shorter period reflects the short-term, positive impact from seasonal variations that do not reflect 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). year-round performance; and
- non-monetary concessions, requiring the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to deduct the pro-rata value of the concession from the monthly rent for the applicable unit.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all appropriate types of expenses, including underwritten Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, are included, and that any inappropriate expenses (e.g., capital improvement costs, repair costs covered by funds set aside for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , partnership costs, etc.) are excluded. To avoid unwarranted releases or reductions of collateral, the expense figures must reflect stabilized operating conditions, and must not be understated due to efficiencies or savings that could not be replicated by a different owner or manager, or that would not be recognized for underwriting purposes.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a line-by-line expense analysis, including a comparison of the original underwriting estimates with the actual expenses shown on the Borrower’sBorrower’sPerson who is the obligor per the Note. income and expense statements. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must use the greater of the underwritten or the actual expense figure shown for each item on the Borrower’sBorrower’sPerson who is the obligor per the Note. statement.
(b) Servicer’s Analysis
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide an analysis and recommendation regarding the release or reduction of collateral, including any calculations required under the terms of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
(c) Correspondence
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide any correspondence with the BorrowerBorrowerPerson who is the obligor per the Note. that pertains to the release or reduction request.
3. Property Inspection
Before approving any request for a release or reduction of collateral, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must perform a physical inspection 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). to verify that:
- no deferred maintenance exists;
- necessary capital improvements have been made; and
- the general management and operations are acceptable and characteristic of a stabilized project.
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection must occur no more than 90 days prior to the date of the submission to Fannie Mae of the release or reduction request. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the results of its inspection by completing the MBAMBAMortgage Bankers Association Standard Inspection Form.
1. Draws Triggered by Adverse Events
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. when any of the following events occur, which could result in a draw on a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. issued for an Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. :
- a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ;
- the failure to renew or replace an expiring Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. at least 30 days prior to its expiration date, or other deadline specified in the Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. ; or
- the failure to replace a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. by the replacement deadline when the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. is no longer acceptably rated.
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. notice to Fannie Mae must include a recommended course of action, and be accompanied by a copy of the executed Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
2. Draw Resulting from Noncompliance with Issuer Rating Requirements or Expiration of Letter of Credit
If a draw on the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. occurs due to noncompliance with the rating requirements for the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. or because of an imminent expiration of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. , Fannie Mae will hold the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds in its designated account until the earliest of the following:
- the BorrowerBorrowerPerson who is the obligor per the Note.
presents a replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
and Fannie Mae agrees, in its sole discretion, to accept the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit.
;
(NOTE: Any agreement by Fannie Mae to accept a replacement Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. will be conditioned upon the Borrower’sBorrower’sPerson who is the obligor per the Note. payment of all administrative and legal costs incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae in connection with the replacement of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .) - the release or reduction provisions of the applicable Achievement AgreementAchievement AgreementAgreement requiring the Borrower to provide a letter of credit, cash, or guaranty as additional collateral to support the Mortgage Loan amount and specifying the terms for releasing the collateral. or other Collateral AgreementCollateral AgreementAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. are satisfied; or
- the BorrowerBorrowerPerson who is the obligor per the Note. pays all amounts due and payable under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any required Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , and Fannie Mae releases the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. .
3. Draws Occasioned by Borrower Request
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. receives a request from the BorrowerBorrowerPerson who is the obligor per the Note. to draw on the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. and have the proceeds applied as a partial prepayment against the UPBUPBUnpaid Principal Balance , and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. allow partial prepayments, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately forward the request, along with an analysis and recommendation, including an estimate of the applicable Prepayment PremiumPrepayment PremiumFor a Mortgage Loan prepayment, amount the Borrower must pay in addition to the prepaid principal and accrued interest per the Loan Documents. , to Fannie Mae. If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. do not allow partial prepayments, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deny the BorrowerBorrowerPerson who is the obligor per the Note. request.
Fannie Mae will assess the BorrowerBorrowerPerson who is the obligor per the Note. request and determine if the proposed use of the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or other collateral would be in the best interest of Fannie Mae and/or the InvestorInvestorMBS Investor for an MBS Mortgage Loan, or Fannie Mae for a Cash Mortgage Loan. in any Securitized Mortgage LoanSecuritized Mortgage LoanMortgage Loan backing an MBS, PFP MBS, or REMIC. . Any decision to apply Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. proceeds or apply other collateral to a partial prepayment will be made by Fannie Mae in its sole discretion. Fannie Mae will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. of its determination and will provide appropriate follow-up instructions.
4. No Interest on Proceeds Held by Fannie Mae
Fannie Mae will not pay interest on the cash proceeds it holds resulting from a draw on a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. .
Notwithstanding anything contained in this Chapter, if no Event of Default has occurred and is continuing under any of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (including Forbearance), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirement prohibiting the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. from immediately approving a partial or final disbursement request of Additional Escrows for P&IP&IPrincipal and interest , T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , and Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. required by:
- Form 6268 – Modifications to Multifamily Loan and Security Agreement (Additional Reserve Escrows);
- Form 6640 – Amendment to Multifamily Loan and Security Agreement (Additional P&I Escrow Agreement); or
- Form 6641 – Additional P&I Escrow Agreement (4000 series Loan Documents).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- determine whether the waiver requires a Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment; and
- document any amendment in any form the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable.
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document all disbursement requests, including any supporting documentation and analysis, in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.03 | |
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| 408.03A | |
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are:
- for 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.
documented with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using
Form 6001 series Loan Documents, or
another Fannie Mae-approved form.
, plus the:
- Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion…;
- Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Modifications to Multifamily Loan and Security Agreement (Rehabilitation Reserve - Moderate Rehabilitation/Substantial Rehabilitation); or
- another approved Modifications to Multifamily Loan and Security Agreement; and
- For 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. documented with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must administer the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to ensure the timely implementation of all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. . Once the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are completed and comply with the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enter the final completion dates and close out the work items for 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. in the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. module in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Additional information may be required for 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. assigned to Loss Mitigation. If 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. does not have work items in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , no further action in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. is required.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to extend the time limits for making Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. if:
- the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. subject to the extension request do not involve life safety issues; and
- 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. does not have a Fannie Mae risk rating of Substandard or Doubtful.
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of 30 days for a life safety issue if the BorrowerBorrowerPerson who is the obligor per the Note. is diligently pursuing completion of the related Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
The duration of any permitted non-life safety extension may not exceed:
- 1 year past the original completion date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , for 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. without loss sharing; and
- 2 years past the original completion date specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , for 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 loss sharing.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. if the required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. are not completed with this timeframe.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to grant a one-time extension of up to 90 days past the original completion date for any Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. which the BorrowerBorrowerPerson who is the obligor per the Note. agreed to implement to qualify as a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to extend the time limit beyond 90 days.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- determine whether the extension requires an amendment to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- document a required amendment in any form the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines to be legally enforceable.
ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are delegated the authority to move required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. from the Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… to the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, or from the Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. to the Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…, and the associated deposit from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. into the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , provided:
- the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. does not involve life safety issues;
- delaying the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. will not materially negatively impact 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). ; and
- the total amount of Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. being transferred does not exceed the lesser of (i) 25% of the original Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , or (ii) $75,000.
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not delegated the authority to move required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. to the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… for any Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that the BorrowerBorrowerPerson who is the obligor per the Note. agreed to implement in order to qualify as a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- send the executed Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. ;
- submit a copy of the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for 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 Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. work item in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ; and
- retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain a copy of the executed Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… or Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion/Repairs; and Completion/Repair Escrow disbursement terms. in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- hold all Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds in an account that meets the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. requirements of Part V, Chapter 3: Custodial Accounts;
- ensure that all necessary permits are obtained, and that all required work is satisfactorily completed in a good and workmanlike manner by the completion dates stipulated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- for a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans.
, ensure all Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
are completed in a timely manner and no later than:
- 12 months after the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- any shorter time period per Part II, Chapter 4: Inspections and Reserves, Section 403: Property Condition Assessment (PCA) for capital improvements identified as Immediate Repairs by the PCAPCAAssessment of the Property's physical condition and historical operation. ;
- process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- perform required inspections of completed work and, if appropriate, work in progress and, if necessary, arrange inspections by qualified professionals;
- ensure that the Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. work does not result in any mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
- promptly submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
- take appropriate steps to remedy or address any default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
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1. General
Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are available to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for costs incurred for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may authorize the release of funds to cover the costs of other reasonable and necessary repairs, replacements, or improvements that are not specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. only if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit the disbursements, and all conditions are fully satisfied.
2. Required Documentation for Disbursement
To obtain reimbursement, the BorrowerBorrowerPerson who is the obligor per the Note. must submit a written requisition specifying the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought, including:
- the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. completed;
- the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased in connection with the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- the cost of all contracted labor or other services involved in completing the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
The BorrowerBorrowerPerson who is the obligor per the Note. requisition for the specified Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note.
certification that the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance:
identified per the Property Condition Assessment; and
required per the
Completion/Repair Schedule, or
Completion/Repair Agreement.
have been completed:
- in a good and workmanlike manner;
- in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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). ; and
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence; and
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman.
3. Disbursement of Funds (Excluding Final Disbursement)
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may disburse funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if it has received all required documentation and determined that all applicable conditions for disbursement have been met, including (but not limited to) the following:
- all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been completed in a good and workmanlike manner, as evidenced by the Borrower’sBorrower’sPerson who is the obligor per the Note. submission and, if appropriate, an inspection of the completed work (see guidance on inspections below);
- all related invoices for items and services covered by the requisition have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for issuance of a joint check(s), made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds under such invoices;
- no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist, unless acceptably bonded over;
- no default exists under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- for each Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans.
Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
disbursement, the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption.
was reported as:
- compliant on the Green Rewards Verification Inspection Form (Form 4221) per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification; or
- noncompliant, and Fannie Mae has approved and closed the remediation in DUS Property Monitor; and
- for a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. with a Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… as an Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are only released after confirming commercial operation of the Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored….
The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. for any requisition, other than the final requisition, may not exceed the actual cost of the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and may be less than the actual cost if, after disbursement, the amount of funds remaining in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. would be less than the anticipated cost of completing all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. plus any holdback specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Notwithstanding the above, once 75% of the total dollar amount of Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. is disbursed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , provided:
- funds are only released for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that have been fully completed;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has complied with all other disbursement requirements;
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. completes an analysis showing that the remaining amount in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. is sufficient to complete all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
- the BorrowerBorrowerPerson who is the obligor per the Note. affirms in writing its obligation to complete the remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. by the required completion dates; and
- the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. is not for a Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that must be released per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification.
For Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. included in a Moderate RehabilitationModerate RehabilitationProperty that will undergo at least $8,000 per unit of Rehabilitation Work. 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. , funds may be periodically disbursed from the applicable Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. or Rehabilitation Reserve Escrow as with a non-Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , rather than only after a compliant verification inspection of Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .
4. Final Disbursement of Funds
Before making the final disbursement of funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm and document the absence of any mechanics’ and materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. by requiring the BorrowerBorrowerPerson who is the obligor per the Note. to obtain an updated title report or a title policy endorsement showing that no such LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the updated title report or endorsement when the total scope of work is less than $75,000. If the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide the required title documentation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a title report or title policy endorsement, and may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may make a final disbursement of all remaining funds upon satisfactory completion of all required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and satisfaction of all other applicable release conditions contained in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .
5. Maintenance of Servicing File
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.03F | |
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1. Use of Third Party
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may inspect 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 have a qualified independent third party inspect 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). , to confirm that the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for monitoring the third-party’s performance.
2. When Periodic Inspections Are Required
Periodic inspections must be performed as the work progresses if the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. :
- exceed in the aggregate the lesser of:
- $500,000, or 20% of the UPBUPBUnpaid Principal Balance for 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 loss sharing; or
- $250,000, or 10% of the UPBUPBUnpaid Principal Balance for 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. without loss sharing; and
- are likely to require more than 6 months to complete.
Inspections must occur at least every 6 months, or more frequently at the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. discretion.
3. When a Final Inspection Is Required
An inspection must be performed to ensure that all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. have been satisfactorily completed before approving and disbursing the final requisition when the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. exceed the lesser of:
- $500,000, or 20% of the UPBUPBUnpaid Principal Balance for 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 loss sharing; or
- $250,000, or 10% of the UPBUPBUnpaid Principal Balance for 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. without loss sharing.
4. Confirming Completion/Repairs if Inspection Is Not Required
Even if an inspection is not required by this Section, the BorrowerBorrowerPerson who is the obligor per the Note. must provide evidence to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. that all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been satisfactorily completed. If not inspected sooner, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm the satisfactory completion of the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. during the next regularly scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
5. Documenting the Servicing File
In all instances, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. whether all work was satisfactorily completed.
| 408.03G | |
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Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds may not be used to cover any administrative or inspection fees due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless expressly permitted Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the BorrowerBorrowerPerson who is the obligor per the Note. agrees in writing. If permitted, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. and deduct the following from any disbursement of funds:
- reasonable fees to cover the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. costs of administering the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
- additional fees to cover any reasonable inspection costs that are not adequately covered by general administrative fees collected from the BorrowerBorrowerPerson who is the obligor per the Note. .
| 408.03H | |
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1. Notification of Default to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.
2. No Release of Funds to Borrower
No funds may be released to the BorrowerBorrowerPerson who is the obligor per the Note. while the BorrowerBorrowerPerson who is the obligor per the Note. is in default under any of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
For all Green Rewards Mortgage LoansGreen Rewards Mortgage LoansMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure a Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection is performed for all Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. to confirm correct installation, and identify any errors that may hinder 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). achieving the expected savings and benefits.
1. Green Rewards Verification Inspection
For a Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection, the inspector must use the Green Rewards Verification Inspection Form (Form 4221) that is pre-populated with PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). information and the Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. identified as Green Rewards Repairs in the Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion…. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit Form 4221 within 60 days after the Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection date, and timely resolve any issues identified by Fannie Mae.
2. Minimum Inspector Qualifications
Third-party or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff must attend Fannie Mae's Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspection training on the requirements, processes, and documentation before conducting Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. inspections.
The minimum inspector qualifications correspond to the applicable Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. type, and may be held by the inspection project team, rather than by an individual inspector.
| Efficiency Measures | Description | Minimum Inspector Qualification |
| Basic |
Simple upgrades such as:
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ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure the inspector is either a qualified third-party or ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. staff per Part V, Chapter 5: Surveillance, Section 502.03: Property Inspection Protocol and Part V, Chapter 5: Surveillance, Section 502.05A: Qualifications. |
| Complex |
Upgrades and changes to building systems, such as:
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3. Unit Inspection
The inspector must inspect a minimum number of occupied and vacant units as follows:
| Total number of units | Minimum number of units to be inspected |
| Less than 20 | 3 units |
| 20 - 55 | 5 units |
| 56 - 99 | 10% of total units |
| 100 - 200 | 10 units |
| 201 - 600 | 5% of total units |
| More than 600 | 30 units |
Form 4221 calculates the required number of units and tracks the number of completed units based on the user's inputs. When unit inspections are required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- Determine the appropriate combination of vacant and occupied units for inspection.
- Determine which vacant and occupied units to inspect.
- Submit at least:
- 1 representative photograph of each Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. listed on Form 4221; and
- 1 photograph of each non-compliant Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .
For Partial Efficiency MeasuresPartial Efficiency MeasuresEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request a rent roll or other documentation identifying the units that received Partial Efficiency MeasurePartial Efficiency MeasureEfficiency Measures installed in a subset of units (e.g., if new ENERGY STAR® refrigerators are only required in 40 of the Property's 100 units). installations, and conduct the Green Rewards VerificationGreen Rewards VerificationGreen Rewards Mortgage Loan Property inspection ensuring all Efficiency Measures were correctly installed. of those units.
4. Determining Compliance
An Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is compliant when the inspector:
- inspects each Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. ;
- verifies its proper installation within specifications using product information and field observation;
- confirms the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation meets the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… requirements; and
- documents it on Form 4221.
5. Remediating Noncompliance
When an Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. is noncompliant:
- The ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must:
- provide a notice of the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies to the BorrowerBorrowerPerson who is the obligor per the Note. and determine a course of action;
- submit a remediation action plan through the DUS Property Monitor system that:
- addresses 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). Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. deficiencies; and
- provides a target date for remediation completion that is no more than 60 days after the BorrowerBorrowerPerson who is the obligor per the Note. receives the notice of deficiencies.
- The BorrowerBorrowerPerson who is the obligor per the Note. must correct or complete the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. installation during the remediation period.
- Fannie Mae may require the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to inspect the remediated Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. based on the severity of noncompliance.
6. Verification Inspection Form Review
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must internally review all Green Rewards Verification Inspection Forms (Form 4221), whether prepared by a third party or by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. before submission.
| 408.04 | |
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| 408.04A | |
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. are:
- Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, for 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. documented with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…, for 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. documented with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must be held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , and are intended to pay for necessary replacements of capital items or major maintenance work 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). over the term of 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. .
If the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. delegates the authority to amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to revise the terms governing the Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , only the changes expressly permitted by this Section can be made, and the delegation does not expand the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ability to change or modify any other term of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan Document Amendment to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For all Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain a copy of the executed Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- unless the BorrowerBorrowerPerson who is the obligor per the Note. has requested in writing a non-interest bearing account, hold all funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets the requirements of Part V, Chapter 3: Custodial Accounts and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- ensure that all required deposits are made to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- perform required inspections of completed work and, if appropriate, work in progress, and arrange, if necessary, for inspections by qualified professionals;
- ensure that work funded from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. does not result in any mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
- promptly submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
- take appropriate steps to remedy or address any default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for ReplacementsReplacementsCapital item replacements and major maintenance needs identified by the Property Condition Assessment or otherwise required. , Repairs, or Restoration; and
- reassess the adequacy of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or the schedule of required deposits; and
- perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
Based on the results of 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). inspection or a new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. as required below, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may determine that the current level of Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding and scheduled deposits will be insufficient to meet all projected capital item or major maintenance needs. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then:
- adjust the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the:
Borrower’s agreement to replace identified capital items and perform required… or the Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the:
Borrower’s agreement to replace identified capital items and perform required maintenance;
terms for funding the identified capital item replacement and… and the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements.
funding to a sufficient level, if warranted, in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
and Part III, by requiring the BorrowerBorrowerPerson who is the obligor per the Note.
to:
- deposit a lump sum into the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and/or
- increase the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposit; and
- give the BorrowerBorrowerPerson who is the obligor per the Note. at least 30 days advance written notice prior to implementing any of the foregoing changes.
Based on the results of the new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. obtained during the underwriting and delivery of a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may:
- adjust the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding, scheduled deposits, and Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… of all Pre-Existing Mortgage LoansPre-Existing Mortgage LoansMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. to match the Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. underwriting; and
- amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. accordingly.
1. Timing and Waivers
A new full PCAPCAAssessment of the Property's physical condition and historical operation. per Form 4099 is required for:
- all MAHMAHProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). every 5 years; or
- for any other 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 term greater than 10 years, during 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. , and every 10 years thereafter, while 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. remains outstanding, or per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive the new PCAPCAAssessment of the Property's physical condition and historical operation. for non-MAHMAHProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as follows:
| Remaining Loan Term | Servicer Delegation |
| Less than 1 Year |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 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. with a:
|
| 1 Year to 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 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. with a:
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| More than 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 5 years for 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. with a:
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After 5 years, a new PCAPCAAssessment of the Property's physical condition and historical operation. is required unless 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. continues to qualify for ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. waiver delegation. 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). may only receive a PCAPCAAssessment of the Property's physical condition and historical operation. waiver twice (i.e., 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. with a 30-year term may obtain a PCAPCAAssessment of the Property's physical condition and historical operation. waiver after the 10th loan year and the 15th loan year, but a new PCAPCAAssessment of the Property's physical condition and historical operation. is required after the 20th loan year).
All PCAPCAAssessment of the Property's physical condition and historical operation. waivers must be documented in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , and any PCAPCAAssessment of the Property's physical condition and historical operation. waiver may be rescinded by Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at any time 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). condition warrants a new PCAPCAAssessment of the Property's physical condition and historical operation. .
2. Delivery and Payment of Property Condition Assessment
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any new PCAPCAAssessment of the Property's physical condition and historical operation. to Fannie Mae through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. . Subject to the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the cost of the PCAPCAAssessment of the Property's physical condition and historical operation. may be paid from funds in the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding was partially or fully waived at the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the condition 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). to ensure the BorrowerBorrowerPerson who is the obligor per the Note. preserves and maintains 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). as required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae determines that the BorrowerBorrowerPerson who is the obligor per the Note. is not properly preserving and maintaining 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to begin making monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with either the funding schedule set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or an alternative funding schedule determined by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. holds the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , none of the interest earned on the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds may be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Unless 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 in default, all interest must be:
- added to the balance of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; or
- paid to the BorrowerBorrowerPerson who is the obligor per the Note. if applicable law requires or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. agrees.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are available to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for costs incurred to replace capital items or maintain major items specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds also may be used for discretionary replacements of capital items or major maintenance items that are not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , but which the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines are intended to be covered by a Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, such as those that would:
- correct or forestall a problem that may adversely affect the physical condition, livability, marketability, or value 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). ;
- directly contribute to the maintenance or enhancement of 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). physical condition, livability, marketability, or value; or
- likely be noted in an updated Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are used for purposes not originally contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor and adjust the monthly reserve deposits to ensure sufficient funds are available to make timely replacements of capital items or major maintenance items in the manner contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and/or the PCAPCAAssessment of the Property's physical condition and historical operation. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for any item specifically identified for reimbursement as a Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , or for any routine maintenance item, routine repair, or cosmetic repair that would normally be characterized as an operating expense. Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must never be used for P&IP&IPrincipal and interest , T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , or any other purpose not specifically permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
| 408.04J | |
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1. General
The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specify the frequency, timing, and size of disbursements from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
2. Required Documentation
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition must be in writing and specify, at a minimum:
- the specific capital item replaced or major maintenance items for which reimbursement is being sought, and if any item is not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , an explanation of why the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds should be released for the item;
- the quantity and price of each type of capital item replaced (e.g., refrigerators);
- the quantity and price of all materials or parts (grouped by type or category) purchased; and
- the cost of all contracted labor or other services.
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition submitted to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the capital item replacements or major maintenance items covered by the requisition have been completed in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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). ; and
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence;
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
3. Disbursement of Funds
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if all required documentation is received, and all applicable release conditions have been met, including, but not limited to:
- all capital item replacements or major maintenance items covered by the requisition have been completed in a good and workmanlike manner;
- all related invoices for capital items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for issuance of a joint check, made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds;
- no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. must not exceed the actual cost of the capital item replacements or major maintenance items covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. requisition.
4. Maintenance of Servicing File
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.04K | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use its discretion in deciding whether to conduct an on-site inspection before approving any specific requisition for Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to perform an on-site inspection when a requisition is submitted, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect all capital item replacements or maintenance items covered by the requisition during its next scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection and confirm the satisfactory completion.
| 408.04L | |
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If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain:
- a reasonable fee to cover the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. routine costs of administering the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and
- additional fees to cover:
- reasonable inspection costs, including the fees of any qualified professional used by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- any other reasonable costs incurred in connection with collecting, holding, investing, or disbursing Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds but which are not adequately covered by the general administrative fees collected from the BorrowerBorrowerPerson who is the obligor per the Note. .
Subject to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. a reasonable fee for any special inspection services provided in connection with a Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. requisition; however, no fee may be charged if such inspection is made as part of a regularly scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds, including any interest, may not be used to cover fees due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless:
- the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specifically permits the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to pay ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection fees; or
- the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
| 408.04M | |
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1. Notification of Default to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.
2. No Release of Funds to Borrower
No funds may be released to the BorrowerBorrowerPerson who is the obligor per the Note. while 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 in default.
No later than 30 days after 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 paid in full, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refund to the BorrowerBorrowerPerson who is the obligor per the Note. all remaining Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may amend existing the Schedule 5 to Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. - Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… on Fannie Mae’s behalf to match the alternative Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding available for newly originated 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. if the BorrowerBorrowerPerson who is the obligor per the Note. has a history of adequate property maintenance, and no other concerns are present (e.g., declining PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). condition, declining rents, declining Net Cash FlowNet Cash FlowOn 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…). The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment revising the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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). is properly maintained on an ongoing basis. 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 not being properly maintained, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reinstate monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. and the reimbursement requisition process.
| Section 409 | |
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| 409.01 | |
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An acceptable Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be in place and maintained at all times for:
- variable rate Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. ;
- Structured ARM Loans; and
- 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. where (i) the BorrowerBorrowerPerson who is the obligor per the Note. executed the Fannie Mae Interest Rate Cap Reserve and Security Agreement (Form 6442 series), or a similar agreement, allowing for a “springing” Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. under certain circumstances, and (ii) the requirement of the BorrowerBorrowerPerson who is the obligor per the Note. to acquire and pledge to the LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has been triggered under the agreement.
The Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. may be either an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. or Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , although the prior approval of Fannie Mae is required before the BorrowerBorrowerPerson who is the obligor per the Note. may enter into an Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. and its collateral assignment must meet the requirements of Part III, Chapter 12: Structured Adjustable Rate Mortgage (SARM) Loans.
Fannie Mae outside counsel must be engaged, at Borrower’sBorrower’sPerson who is the obligor per the Note. cost, to review the hedge bid package and documents, and prepare the amended Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for each hedge renewal. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a completed Counsel Designation Request for Interest Rate Hedge Transactions (Form 4625.A).
| 409.02 | |
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For BondBondTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. , the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must:
- be in place whenever the variable rate mode is in effect; and
- comply with the requirements of the Reimbursement Agreement and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
must not adjust the reserve.
| 409.02B | |
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When required for a Structured Transaction, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. conforms to the applicable Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and/or the other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. requirements.
Per the Interest Rate Cap Reserve and Security Agreement (Form 6442 series), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. reserve and determine if the cost of a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. has increased or decreased based on market conditions.
- If the estimated cost of a replacement cap has increased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must increase the monthly reserve payment to ensure that sufficient funds will be available to purchase the replacement cap by the end of the reserve period.
- If the estimated cost of a replacement cap has decreased, the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
may:
- opt to not adjust the reserve; or
- calculate and adjust the monthly escrow payments needed to purchase a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
based on 115% of the cost of an Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with the term required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
, provided:
- it is a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. DeliveredDeliveredSubmission 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. before January 1, 2023;
- the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow payments are recalculated at least every 6 months;
- it is not part of a Variable Rate Bond Credit Enhancement Transaction;
- it does not have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. or a BorrowerBorrowerPerson who is the obligor per the Note. , Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , or PrincipalPrincipalPerson 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. on ACheckACheckLender due diligence performed for the Borrower, Key Principal, and Principal using the ACheck application. ; and
- no other Portfolio Mortgage LoansPortfolio Mortgage LoansMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. in your Fannie Mae portfolio with that SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). have an existing Payment DefaultPayment DefaultBorrower's failure to fully pay any required Mortgage Loan payment when due, including, principal, interest, late charges, default interest, fees, pricing incentive recapture, prepayment premium, escrows, or other collateral accounts for taxes, insurance, … or Performance DefaultPerformance DefaultBorrower's failure to perform any promise or covenant within any applicable grace periods per the Mortgage Loan, other than a Payment Default. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may refund to the BorrowerBorrowerPerson who is the obligor per the Note. any amount left in the reserve account after purchasing the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
Every 6 months the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must adjust the required Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow amount based on 110% of the current cost of the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- monitor the term of each Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. ;
- hold all escrowed funds for an Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in an account meeting the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. requirements of Part V, Chapter 3: Custodial Accounts;
- engage the BorrowerBorrowerPerson who is the obligor per the Note. prior to expiration of each Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that an acceptable replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is in place prior to its expiration; and
- perform any required functions with respect to the Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. .
| 409.04 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must maintain all UCCUCCUniform Commercial Code filings, and ensure that Fannie Mae’s LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. in the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is maintained. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not direct the investment, application, or release of the collateral under any Interest Rate Hedge AgreementInterest Rate Hedge AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , without express written authorization from Fannie Mae.
| 409.05 | |
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| 409.05A | |
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Any payments by the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider must be made to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and not to the BorrowerBorrowerPerson who is the obligor per the Note. . The disposition of funds depends on whether the BorrowerBorrowerPerson who is the obligor per the Note. is current on 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. and Reimbursement Agreement payment obligations (principal or PRFPRFAccount you hold accumulating principal amortization payments for variable rate Bond credit enhancements. deposit, as applicable, interest, any Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. escrow, and all other amounts then due) or any default exists under the Reimbursement Agreement or any other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If no default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must remit the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment to the BorrowerBorrowerPerson who is the obligor per the Note. . If a default exists, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider’s payment as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations, to be held in accordance with the applicable agreements, and notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. of the receipt of the payment.
If the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. or another third party is to receive any payments from the Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, and the BorrowerBorrowerPerson who is the obligor per the Note. is not current on its payments or a default exists, then the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- notify the payee of the facts; and
- instruct the third party to withhold the payment to the BorrowerBorrowerPerson who is the obligor per the Note. , and make payment to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to be held as additional collateral for the Borrower’sBorrower’sPerson who is the obligor per the Note. obligations.
| 409.05B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. to ensure that all payments are made on a timely basis. All payments under an Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must be made directly to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , which will:
- remit the amount received from the BorrowerBorrowerPerson who is the obligor per the Note. to the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider; or
- remit the amount received from the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider to the BorrowerBorrowerPerson who is the obligor per the Note. , but only after the BorrowerBorrowerPerson who is the obligor per the Note. has made the required monthly P&IP&IPrincipal and interest payment on 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. .
Payments due on the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. must match the payment dates on 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. or the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , as applicable. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must advance Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. payments and Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. credit enhancement fees that are not made by the BorrowerBorrowerPerson who is the obligor per the Note. or the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider, as applicable, on a timely basis. These payments and their duration will be treated as Delinquency AdvancesDelinquency AdvancesYour required advances for scheduled monthly Mortgage Loan principal and/or interest per your Lender Contract, or the Guide. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is not required to advance any termination payment due on the Interest Rate SwapInterest Rate SwapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. .
| 409.06 | |
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Fannie Mae lists the credit agency rating requirements and the acceptable Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers on Cap/Swap Counterparties for Multifamily Transactions. If the rating of a provider declines to a level where termination and replacement of the outstanding Interest Rate HedgesInterest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. with that provider is required, Fannie Mae will notify the affected servicers and direct them to contact their BorrowersBorrowersPerson who is the obligor per the Note. and work with them to effect the termination and replacement. Failure to replace any Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. provider whose rating no longer meets the rating requirements is a default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the current Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires before 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , at least 90 days before the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. terminates, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the Borrower'sBorrower'sPerson who is the obligor per the Note. written intention to:
- purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. ; or
- convert the interest rate on a variable rate;
- Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. to a Bond Reset Interest Rate; or
- SARM Loan to a fixed rate.
If the BorrowerBorrowerPerson who is the obligor per the Note. elects to purchase a replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm that the possible Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. providers are all on the current list of approved Cap/Swap Counterparties for Multifamily Transactions;
- review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. timing requirements; and
- for a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
, ensure the:
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
- remaining 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; or
- term specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- replacement Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
notional amount:
- equals the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. UPBUPBUnpaid Principal Balance when the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective; and
- remains at that amount throughout the replacement Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. term; and
- Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. of the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. is equal to or less than the Cap Strike RateCap Strike RateIndex interest rate specified in the Interest Rate Cap Agreement at or above which a payment obligation will be triggered by the Interest Rate Cap provider. required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
- BorrowerBorrowerPerson who is the obligor per the Note.
purchases a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments.
with a term equal to the lessor of the:
The BorrowerBorrowerPerson who is the obligor per the Note. may purchase a replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in advance if the replacement Interest Rate CapInterest Rate CapInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. becomes effective on the initial Interest Rate Cap’sInterest Rate Cap’sInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
If the Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. expires and the BorrowerBorrowerPerson who is the obligor per the Note. failed to provide evidence of securing the replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. immediately. Fannie Mae will instruct the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. action regarding the Borrower’sBorrower’sPerson who is the obligor per the Note. default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original replacement Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. documents, including the Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. , the Assignment of Hedge Interest or Supplemental Hedge Security Agreement, and UCCUCCUniform Commercial Code Financing Statements, and retain copies in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a copy of the new Interest Rate Cap AgreementInterest Rate Cap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. or Interest Rate Swap AgreementInterest Rate Swap AgreementContract setting forth the terms and conditions of an Interest Rate Cap, Hedge, or Swap. through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , and provide the new Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. information as follows:
- for Credit Enhancement Mortgage LoansCredit Enhancement Mortgage LoansMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. – upload Hedge Delivery Information (Form 4643) into CESIRCESIRCredit Enhancement Servicing and Investor Reporting System ;
- for all Interest Rate HedgesInterest Rate HedgesInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions – update hedge data in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. ; or
- for Structured ARM Loans (except in Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transactions) – submit Form 4643 through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
| Section 410 | |
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If the BorrowerBorrowerPerson who is the obligor per the Note. owns a LeaseholdLeaseholdProperty held under a long-term lease or Ground Lease. interest in 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- ensure that the BorrowerBorrowerPerson who is the obligor per the Note. complies with all provisions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. that relate to the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. ;
- if the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. payments are escrowed, collect monthly payments from the BorrowerBorrowerPerson who is the obligor per the Note. to ensure sufficient funds will be available to pay the ground rents and any special payments required by the Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. ; and
- hold any escrowed ground rent payments with the Borrower’sBorrower’sPerson who is the obligor per the Note. other T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow funds in a T&I Custodial AccountT&I Custodial AccountCustodial Account for the deposit of T&I and other impound escrow funds. or a separate Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets all requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for any losses incurred by Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. fails to make timely ground rent payments. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for protecting the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. priority of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. , and must:
- take all reasonable actions to prevent the filing of any LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that would prime the LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. of the Security InstrumentSecurity InstrumentInstrument creating a lien or encumbrance on 1 or more Properties and securing the Loan Document obligations. ;
- immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , in writing, upon learning of any such LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. filing, including a recommendation for resolving the situation; and
- submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit
Property inspections,
operating statements,
requested modifications,
asset management reports, and
data corrections for loan or property attributes.
, if:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is aware of any material violation by the BorrowerBorrowerPerson who is the obligor per the Note. or PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). management agent of any applicable law, ordinance, regulation, or other legal requirement; or
- 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 not in compliance with any applicable law, ordinance, regulation, or other legal requirement, including, without limitation, any relating to:
- Fair Housing Act;
- Americans with Disabilities Act;
- non-discrimination;
- environmental hazards;
- occupancy;
- zoning and land use;
- health, fire, and building codes relating to immediately hazardous conditions; and
- illegal use 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). .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also provide to Fannie Mae all information concerning any lawsuit, cause of action, or claim by any third party resulting from or relating to the violation.
| Section 412 | |
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Various federal and state statutes provide for the civil or criminal forfeiture of certain types of property, including real estate that is used, or intended to be used, to commit or facilitate the commission of certain violations of law.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not provide any information about the BorrowerBorrowerPerson who is the obligor per the Note. , 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. , 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). , any Key PrincipalKey PrincipalPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , or any PrincipalPrincipalPerson 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. directly to any federal or state agency unless Fannie Mae specifically authorizes the release of the information. Following any contact from a federal or state official, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately contact Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. and Multifamily Special Asset ManagementMultifamily Special Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should describe in its communication the nature of the contact, the information requested, and any document or papers received by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in connection with the contact. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must continue to service 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. .
| Section 413 | |
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| 413.01A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. 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). is continuously covered by property and liability insurance per Part II, Chapter 5: Property and Liability Insurance;
- all renewal premiums are fully paid on time in:
- an annual lump sum; or
- installments; and
- any BorrowerBorrowerPerson who is the obligor per the Note.
-financing of premiums complies with Part II, Chapter 5: Property and Liability Insurance, Section 501.01F: Payment of Premium, and either:
- the Modifications to Multifamily Loan and Security Agreement (Financing of Insurance Premiums) (Form 6272) was executed on the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. ; or
- prior to the BorrowerBorrowerPerson who is the obligor per the Note. entering into a premium financing agreement, execute and submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. an Amendment to the Multifamily Loan and Security Agreement, substantially in the form of the Modifications to Multifamily Loan Agreement (Financing of Insurance Premiums) (Form 6272).
If no insurance escrows are collected, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- obtain annual evidence that all policies were fully paid; and
- for BorrowerBorrowerPerson who is the obligor per the Note.
-financed premiums, retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
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- receipts confirming timely payments; and
- a copy of the financing agreement.
| 413.01B | |
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For each policy renewal, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must comply with the following timeline.
| Timeline | The Servicer must... |
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| No later than 60 days before the policy expiration date | Contact the BorrowerBorrowerPerson who is the obligor per the Note. to request an original or duplicate original of each renewal policy within 90 days after the policy’s expiration date. |
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No later than 15 days after the earlier of:
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| No later than 60 days after notifying the Borrower of any noncompliant renewal policy | Resolve all non-compliant items with the BorrowerBorrowerPerson who is the obligor per the Note. and/or insurance agent (e.g., obtain a compliant renewal policy or endorsement, request a waiver, obtain force place coverage, etc.). |
| If, after 60 days, neither a compliant renewal policy nor an insurance waiver is obtained |
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| 413.01C | |
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With each renewal, but at least annually, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- complete an insurance compliance checklist to review the adequacy of the Borrower’sBorrower’sPerson who is the obligor per the Note.
insurance coverage and ensure compliance with:
- Part II, Chapter 5: Property and Liability Insurance;
- all Fannie Mae-approved modifications; and
- the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- confirm the insurance carrier’s rating per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
the:
- checklist;
- evidence of the insurance carrier’s rating; and
- if terrorism insurance is required, the analysis when annually confirming insurance compliance.
For an unrated Risk Retention GroupRisk Retention GroupState-chartered insurance company created by the 1986 federal Liability Risk Retention Act, insuring commercial businesses and government entities against liability risks. or Captive InsurerCaptive InsurerInsurance company wholly owned and controlled by its insureds, whose primary purpose is to insure the risks of its owners, and its insureds benefit from the captive insurer's underwriting profits. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also comply with Part II, Chapter 5: Property and Liability Insurance, Section 501.01C: Risk Retention Groups and Captive Insurance.
| 413.01D | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any insurance exception, including a delegated one, through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , with:
- a Multifamily Exception Request (Form 4638) for each exception signed by the authorizing person;
- a recommendation explaining why any non-delegated waiver request should be approved;
- all supporting documentation; and
- any previous exception not approved for the life of 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 an annual basis.
| 413.01E | |
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All property and liability insurance carriers for renewal policies must comply with the following.
| If rated by... | Insurance carrier must have a... |
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| A.M. Best Company |
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| Demotech, Inc. | Financial Stability Rating of A or better. |
This rating requirement does not apply to:
- state pools or funds; or
- NFIPNFIPProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. policies.
Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to immediately obtain replacement coverage with a compliant carrier if the carrier is downgraded below:
- B++, if rated by A.M. Best Company; or
- A, if rated by Demotech, Inc.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor all flood map and community status changes, and take appropriate action when changes affecting 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. it services occur. When 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). is remapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to obtain flood insurance, regardless of whether the community is “participating” in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. . The flood insurance must:
- be in place within 45 days after the date the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was notified of the remapping; and
- have coverage meeting the mandatory purchase requirements identified in:
- the Federal flood insurance statutes; and
- any applicable Federal agency rulemaking and publication.
If the BorrowerBorrowerPerson who is the obligor per the Note. refuses to obtain the required coverage or pay a disputed premium, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain the required coverage. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily InsuranceMultifamily InsuranceTeam that can be contacted at [email protected]. if:
- 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). is mapped into a Special Flood Hazard AreaSpecial Flood Hazard AreaSpecial Flood Hazard Area designated by FEMA. ;
- the community in which 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 does not participate in the National Flood Insurance ProgramNational Flood Insurance ProgramProgram of flood insurance coverage and floodplain management administered under the National Flood Insurance Act. ; and
- the BorrowerBorrowerPerson who is the obligor per the Note. cannot obtain the required flood insurance.
To remove 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). /building from an SFHASFHASpecial Flood Hazard Area designated by FEMA. , only an updated FEMAFEMAFederal Emergency Management Agency Standard Flood Hazard Determination Form (SFHDF) based on the following is acceptable:
- Letter of Map Amendment (LoMA);
- Letter of Map Revision (LoMR); or
- Letter of Determination Review (LoDR).
| 413.04 | |
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| 413.04A | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately:
- obtain the required property and liability insurance, at the Borrower’sBorrower’sPerson who is the obligor per the Note.
expense, if:
- the BorrowerBorrowerPerson who is the obligor per the Note. fails to obtain acceptable insurance coverage; or
- per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , even if the policy has not yet expired, the carrier is downgraded below the required ratings per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 413.01E: Ratings; and
- notify Fannie Mae if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. obtains the required property and liability insurance.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is permitted to collect from the BorrowerBorrowerPerson who is the obligor per the Note. any reasonable out-of-pocket costs and expenses incurred by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to obtain insurance coverage for 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). .
| Section 414 | |
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| 414.01 | |
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In the event of a casualty loss of $75,000 or more, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. a:
- Report of Multifamily Hazard Insurance Loss (Form 178):
- within 30 days if no serious injury or death occurred; or
- within 10 days if serious injury or death occurred; and
- final Form 178 indicating that 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 fully restored, and document its Servicing FileServicing FileYour file for each Mortgage Loan serviced. when 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 fully restored.
A revised Form 178 must be submitted if any of the information on the form changes for any casualty loss greater than the lesser of (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance .
| 414.02 | |
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For any casualty loss covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. insurance policy, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the BorrowerBorrowerPerson who is the obligor per the Note. timely files a proof of loss with the insurance carrier, and effects a prompt and reasonable adjustment of the loss. If the BorrowerBorrowerPerson who is the obligor per the Note. fails to timely file a proof of loss with the insurance carrier, or take requisite actions to effect a prompt adjustment of the loss claim, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must independently contact the insurance carrier to adjust the loss claim.
| 414.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must assess the extent and impact of any damage caused by a casualty, and ensure that the BorrowerBorrowerPerson who is the obligor per the Note. appropriately addresses the damage.
Within 45 days after learning of a casualty loss, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document its Servicing FileServicing FileYour file for each Mortgage Loan serviced. with the results of its casualty loss assessment. At a minimum, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must include:
- when the casualty loss occurred and when the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. was first informed of the casualty loss;
- the scope of the damage and its effect on 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). (e.g., impact on the habitability of the buildings, safety of the residents, serious injury or loss of life, project occupancy, and project income and expenses);
- the Borrower’sBorrower’sPerson who is the obligor per the Note. plan of action for securing and restoring the damaged portion 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). , and the status of the Borrower’sBorrower’sPerson who is the obligor per the Note. efforts to implement the plan, including the specific steps to be taken (e.g., temporarily relocating tenants, preparing plans and specifications, awarding contracts, and commencing repair work);
- whether any environmental problems are associated with the damage, and if so, how they will be addressed;
- the projected cost to repair and restore the damaged ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). , including any available information on contractors’ bids or awards;
- whether the casualty loss is covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. insurance policy, the status of any insurance claim, and an estimate of the amount and timing of the funds to be received from the insurance carrier;
- the estimated amount of additional funds that the BorrowerBorrowerPerson who is the obligor per the Note. will have to provide from its own resources to complete all necessary repair and restoration work, and the current availability of such funds; and
- any other relevant information pertaining to the loss event that is known to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and could have a material bearing on Fannie Mae’s interests.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect 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). , take photographs of the damage, and complete a Multifamily Catastrophic Loss Inspection (Form 4261) if:
- the casualty loss is expected to exceed the lesser of (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance of 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. as of the date of the casualty; or
- any of the following conditions exists:
- a default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the combination of insurance proceeds and BorrowerBorrowerPerson who is the obligor per the Note. funds is insufficient to complete the necessary PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). repairs for restoration to a condition fit for human habitation and meeting all applicable permitting requirements;
- prior to the commencement of any restoration work, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that, upon completion of the repair and restoration work, 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 not be capable of generating sufficient income to cover all operating expenses, required Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, P&IP&IPrincipal and interest on 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. , and required payments on any subordinate debt secured by 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 will not otherwise meet a 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. or other test required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; or
- the repair and restoration work will not be completed by the earlier of (i) the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , or (ii) within 1 year from the date of the casualty.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of the inspection unless expressly prohibited by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
An inspection by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is optional if the casualty loss is expected to be less than (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance , and none of the above conditions exist. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to inspect 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm during the next PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection, and document in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. , that the repair and restoration work was satisfactorily completed. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the repair or restoration work was not satisfactorily completed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily InspectionsMultifamily InspectionsTeam that can be contacted at [email protected]. and Multifamily Loss MitigationMultifamily Loss MitigationTeam that can be contacted at [email protected]. ) in writing, as required by Part V, Chapter 5: Surveillance.
After inspecting 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). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. a copy of the completed Catastrophic Loss Inspection (Form 4261), and photographs of the damaged portions 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). ; and
- submit a copy of the Catastrophic Loss Inspection (Form 4261) and the photographs through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. within 7 days after completing the Catastrophic Loss Inspection (Form 4261).
Any insurance loss draft or check issued by the insurance carrier must be made payable to Fannie Mae in care of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or as otherwise required by the mortgagee clause. Provided the Lender ContractLender ContractProgram Documents per the Multifamily Selling and Servicing Agreement. contains nothing to the contrary, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to endorse any insurance loss draft or check on Fannie Mae’s behalf, as follows:
Fannie Mae
By: [Name of Servicer]
By: [Name of Servicer’s Authorized Signer]
[Title of Servicer’s Authorized Signer].
If any insurance loss draft or check made payable to Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is cashed by the BorrowerBorrowerPerson who is the obligor per the Note. without proper endorsement by Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must instruct the BorrowerBorrowerPerson who is the obligor per the Note. to send the funds to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. within 5 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. . If the BorrowerBorrowerPerson who is the obligor per the Note. does not send the funds, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. immediately.
If the insurance loss draft or check is payable to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is authorized to endorse the draft or check and apply the proceeds in accordance with this Section. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also send the Insurer an Insurance Loss Payee Notice Letter (Form 4803) so that all future insurance loss drafts and checks will be issued to Fannie Mae in care of the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a copy of the Insurance Loss Payee Notice Letter (Form 4803) in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
If the insurance loss draft or check is not made payable to either Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must return it to the insurance carrier and request the loss draft or check be reissued in the name of Fannie Mae and sent to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . If the check has already been cashed by the BorrowerBorrowerPerson who is the obligor per the Note. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must demand those funds be either paid by the BorrowerBorrowerPerson who is the obligor per the Note. to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and/or deposited in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. meeting the requirements of Part V, Chapter 3: Custodial Accounts.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to confirm no contrary requirements exist regarding the application of insurance loss proceeds (e.g., where the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the noteholder to “reasonably” approve the application of insurance proceeds, where the noteholder is to apply commercially reasonable standards, or where the noteholder has the power to approve in its sole discretion).
If any of the following conditions exist, Fannie Mae will determine, in its sole discretion, whether to require the insurance loss proceeds to be (i) applied to the UPBUPBUnpaid Principal Balance , or (ii) used to repair and restore 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). :
- a default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- the combination of insurance proceeds and BorrowerBorrowerPerson who is the obligor per the Note. funds is insufficient to complete the necessary PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). repairs for restoration to a condition fit for human habitation and meeting all applicable permitting requirements;
- prior to the commencement of any restoration work, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that, upon completion of the repair and restoration work, 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 not be capable of generating sufficient income to cover all operating expenses, required Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, P&IP&IPrincipal and interest on 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. , and required payments on any subordinate debt secured by 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 will otherwise meet a 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. or other test required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; or
- the repair and restoration work will not be completed by the earlier of (i) the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , or (ii) within 1 year from the date of the casualty loss.
Based upon the Borrower’sBorrower’sPerson who is the obligor per the Note. plan of action and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. overall assessment, and provided none of the conditions listed in Part V, Chapter 4: Asset Management: Loan Document Administration, Section 414.04: Required Casualty Loss Property Inspection exist, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has the authority to:
- hold the proceeds to incrementally reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of repairing the damage and restoring 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). to habitable condition; or
- recommend to Fannie Mae that the proceeds be applied to the UPBUPBUnpaid Principal Balance of 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. by submitting a request through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
All insurance loss proceeds will be held to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. in increments for the cost of repairing the damage and restoring 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 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 restored to habitable condition, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- deposit all insurance loss proceeds in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. meeting the requirements of Part V, Chapter 3: Custodial Accounts, to incrementally reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of repairing the damage;
- require the BorrowerBorrowerPerson who is the obligor per the Note. to deposit, in the same Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , funds equal to the difference between (a) the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. estimate of the total cost to repair and restore 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). to its pre-casualty condition, and (b) the amount of the insurance proceeds;
- for losses greater than $75,000, prepare and have the BorrowerBorrowerPerson who is the obligor per the Note. execute the applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) for use with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. if documented before the June 2019 Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. publication, or Insurance Loss Proceeds Collateral Agreement (Form 6639) for use with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , specifying the terms and conditions under which the funds held in the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. will be released to the BorrowerBorrowerPerson who is the obligor per the Note. (Form 6615) is not required for 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. with Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. documented after the June 2019 Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. publication); and
- submit a copy of any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639) through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the above requirement that the BorrowerBorrowerPerson who is the obligor per the Note. deposit additional funds into the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. if (i) the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. deposits all insurance loss proceeds into the Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , and (ii) determines that the BorrowerBorrowerPerson who is the obligor per the Note. , Key PrincipalsKey PrincipalsPerson who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and/or may be required to provide a Guaranty. , and 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. have sufficient funds to repair and restore 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). when the insurance loss proceeds alone are insufficient.
Within 7 days of execution, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. copies of:
- any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639);
- any Report of Multifamily Hazard Insurance Loss (Form 178); and
- if required and completed, a copy of the Multifamily Catastrophic Loss Inspection (Form 4261).
The Multifamily Catastrophic Loss Inspection (Form 4261) must be submitted through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. within 7 days after the later of:
- the execution of any Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639); or
- the completion of the Multifamily Catastrophic Loss Inspection (Form 4261).
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. the original executed copy of any Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639), and retain in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. the original:
Before the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. disburses any funds to the BorrowerBorrowerPerson who is the obligor per the Note. for repair or restoration work the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- have any applicable executed Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639);
- have on deposit in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. all insurance loss proceeds and, unless waived as provided above, sufficient BorrowerBorrowerPerson who is the obligor per the Note. funds to cover the estimated cost to complete the repair and restoration work;
- except in the case of minor casualties, have copies of all applicable building permits and other permits/authorizations required to carry out the repair and restoration work;
- except in the case of minor casualties, review (or have a qualified professional review) and approve any plans and specifications relating to the repair and restoration work;
- obtain from the BorrowerBorrowerPerson who is the obligor per the Note. the identities of each principal contractor, architect, and engineer who will be involved in the repair and restoration work, and be satisfied with their qualifications (including assurance each is appropriately licensed and bonded); and
- obtain evidence of builder’s risk insurance, if required, in accordance with Part II, Chapter 5: Property and Liability Insurance, Section 501.02F: Builder’s Risk Insurance.
Any emergency work required to protect 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 correct a condition threatening the health or safety of the tenants must be undertaken immediately by the BorrowerBorrowerPerson who is the obligor per the Note. , even if the forgoing requirements have not been complied with.
| 414.12 | |
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Before disbursing funds, including the final disbursement, to the BorrowerBorrowerPerson who is the obligor per the Note. for each disbursement request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be satisfied that:
- all repair and restoration work has been completed in a good and workmanlike manner and in accordance with any applicable plans and specifications, as evidenced by submissions from the BorrowerBorrowerPerson who is the obligor per the Note. and, if applicable, by the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or a qualified professional’s inspection of the completed work;
- all related invoices for items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable pre-conditions of the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639) for issuance of a joint check made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds;
- the necessary release of LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. or LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. waivers have been submitted by all contractors, and no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must approve and disburse funds related to each BorrowerBorrowerPerson who is the obligor per the Note. request in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639). Funds must be disbursed no more frequently than once a month, unless:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that more frequent disbursements of funds are appropriate and can be managed effectively; or
- the disbursement is equal to or greater than $10,000, or is the final disbursement of proceeds.
| 414.12C | |
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Each of the Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be in writing and must specify, at a minimum:
- the specific repair and restoration work for which reimbursement is being sought;
- the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased; and
- the cost of all contracted labor or other services.
The Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the repair and restoration work was completed in a good and workmanlike manner, in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over 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 the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence; and
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12D | |
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The amount of each disbursement (other than the final disbursement) may not exceed the lesser of:
(i) an amount equal to:
- the actual cost of the repair and restoration work covered by the disbursement request, or, if the work was done under a contract or subcontract pursuant to which other work remains to be done, an amount equal to 90% of the actual cost of the repair and restoration work covered by the disbursement request (i.e., a 10% holdback is required if the work under the applicable contract or subcontract has not been completed in full); plus
- 100% of the cost of any materials used, or to be used, in connection with the repair and restoration work, if at the time of the disbursement request, title to the materials has passed to the BorrowerBorrowerPerson who is the obligor per the Note. and the materials have been installed, or are being properly stored, on 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
(ii) an amount equal to the difference between:
- the balance of the Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. at the time of the disbursement request; and
- the estimated cost of all remaining repair and restoration work at that time of the disbursement request.
Upon satisfactory completion of all required repair and restoration work, and satisfaction of all other applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- disburse all remaining funds to the BorrowerBorrowerPerson who is the obligor per the Note. ; and
- submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. a final Report of Multifamily Hazard Insurance Loss (Form 178) to indicate that all work was satisfactorily completed.
| 414.12F | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all actions taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. disbursement request are appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. immediately if the BorrowerBorrowerPerson who is the obligor per the Note. fails to:
- proceed diligently with any necessary repair and restoration work;
- perform the work satisfactorily; or
- perform in accordance with the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
The Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. notice to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. must include a description of any steps that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is taking to resolve the situation.
If the insurance loss proceeds include funds specifically designated to defray administrative costs incurred by the mortgagee in connection with the casualty loss, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may reimburse itself from this designated amount for its actual, reasonable administrative costs. If no such provision is made by the insurer, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may not seek reimbursement for its administrative costs from the proceeds, nor may the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. seek reimbursement separately from the BorrowerBorrowerPerson who is the obligor per the Note. .
| Section 415 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Special Asset ManagementMultifamily Special Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. before performing a casualty loss assessment 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). securing a Non-Performing Mortgage LoanNon-Performing Mortgage LoanMortgage Loan with an uncured default. . Fannie Mae will determine whether the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. should proceed with the assessment, and direct the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. accordingly. Any activity or action plans to repair or restore 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). must be approved by Fannie Mae. All insurance loss drafts and checks must be forwarded to Fannie Mae for endorsement and disposition.
| Section 416 | |
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| 416.01 | |
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Each Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. transaction is different, therefore the requirements in this Section may not apply to every transaction. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the applicable Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for specific requirements.
| 416.02 | |
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Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. requests are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as described below.
Decisions and actions are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. when a request involves:
- amendments or changes to the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, or equivalent agreement, except for the Fannie Mae standard form (i) Amendment for Completion/Repair extensions, and (ii) changes to the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits;
- Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. or borrow-ups (future advances);
- additions, releases, or substitutions of collateral;
- revaluation and determination of the Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. ;
- Transfers/AssumptionsTransfers/AssumptionsTransaction changing the ownership of the Borrower or Property. ;
- the interest rate conversion from variable to fixed on a SARM Loan;
- Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. renewals or modifications;
- refinances;
- defeasance;
- payoffs/terminations;
- Ground LeaseGround LeaseContract for the rental of land, usually on a long term basis. or operating lease modifications; or
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). management or operator changes.
Decisions and actions covered by the Delegated Transaction FormsDelegated Transaction FormsMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. (Form 4636 series) are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as set forth in the applicable Form 4636 series. For these requests, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the completed Delegated Transaction FormDelegated Transaction FormMultifamily Asset Management Delegated Transaction Form (Form 4636 series) used to determine whether certain asset management requests from a Borrower are delegated to the Servicer. (Form 4636 series) through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
| 416.02C | |
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Decisions and actions involving the following are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to the extent delegated in this Chapter:
- Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. replacements and draws;
- Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreements (Form 6639);
- endorsing insurance checks;
- extensions to complete Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
- changes to the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits;
- administering escrow accounts; and
- administering Collateral AgreementsCollateral AgreementsAgreement granting a security interest in Mortgage Loan collateral not covered by the Security Instrument. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has any questions regarding the need for Fannie Mae approval, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. prior to proceeding.
| 416.03 | |
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If Fannie Mae approval is required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a request through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Any approval request must include the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation, any supporting documentation (including references to the relevant sections of the governing documents), and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis supporting its recommendation.
To the extent permitted by the provisions of the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , BorrowersBorrowersPerson who is the obligor per the Note. may have the ability to release or substitute collateral. These requests must follow the provisions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and are not delegated under this Section.
The BorrowerBorrowerPerson who is the obligor per the Note. must initiate the release/substitution process by submitting a written request to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Upon receipt, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a release/substitution request package through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. that includes:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. summary of the Borrower'sBorrower'sPerson who is the obligor per the Note. release/substitution request, and its recommendation regarding approval of the requested release/substitution;
- any waiver requests and the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation for approval of each waiver;
- when the BorrowerBorrowerPerson who is the obligor per the Note. expects the release/substitution to close;
- whether 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 all conditions to release/substitute and compliance tests (e.g., 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. , 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. , geographic/asset concentration) stipulated in the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- for a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , the release price and calculations (calculated according to the terms of the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. );
- for a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , the remaining Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. balance of the facility and each property after the release;
- the amount of the release/substitution fees associated with the transaction;
- whether a prepayment or advance of funds is expected to occur in connection with the transaction;
- the Structured Facilities Monitoring Spreadsheet (Form 4802) showing 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. level and collateral level data for the Structured Transaction both before and after the release/substitution occurs;
- third-party reports; and
- any other items required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If a Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. or cash collateral is required as part of the request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must enter the Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. or cash collateral information in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. . Any Letter of CreditLetter of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must meet the requirements of Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. Original Letters of CreditLetters of CreditLetter of Credit approved by Fannie Mae per Part I, Chapter 2: Mortgage Loan, Section 204: Letters of Credit. must be sent to Multifamily Structured AcquisitionsMultifamily Structured AcquisitionsTeam that can be contacted at [email protected]. .
If the request is approved, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- submit its payoff calculations to Multifamily Structured AcquisitionsMultifamily Structured AcquisitionsTeam that can be contacted at [email protected]. ;
- release the collateral from the MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. system; and
- if necessary, release, update, and verify any interest rate hedges associated with the transaction in MSFMSMSFMSMultifamily Structured Facilities Management System performing collateral delivery and securitization functions for Structured Transactions. .
To the extent permitted by the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and the other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the BorrowerBorrowerPerson who is the obligor per the Note. may have the ability to obtain a Future Advance. These requests must follow the requirements of the applicable Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , and approval is not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
The BorrowerBorrowerPerson who is the obligor per the Note. must initiate the Borrow-Up process by submitting a written request to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Upon receipt, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Borrow-Up request package through DUS GatewayDUS GatewayMultifamily pre-acquisition system, or any successor systems, recording deal registration, Pre-Review and/or waiver tracking, Mortgage Loan Commitments, and decision records. that includes:
- the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. summary of the Borrower’sBorrower’sPerson who is the obligor per the Note. Borrow-Up request and its recommendation for approval;
- any waiver requests and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation for approval of each waiver;
- the amount of the Borrow-Up and the supporting underwriting spreadsheets and calculations (calculated per the terms of the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. );
- when the BorrowerBorrowerPerson who is the obligor per the Note. expects the Borrow-Up to close;
- whether 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 all conditions and compliance tests (e.g., 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. , 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. , geographic/asset concentration) for a Borrow-Up per the applicable Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- a quote sheet;
- a Sources and Uses statement;
- any Interest Rate HedgeInterest Rate HedgeInterest rate agreement between the Borrower and a provider for which the Borrower receives payments at the end of each period when the interest rate exceeds the Cap Strike Rate. The Interest Rate Cap provides a ceiling (or cap) on the Borrower's Mortgage Loan interest payments. requirements;
- for a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. , the remaining Allocable Facility AmountAllocable Facility AmountFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. balance of the Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and each PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). after the Borrow-Up;
- itemized Borrow-Up fees associated with the transaction;
- the Structured Facilities Monitoring Spreadsheet (Form 4802) showing 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. level and collateral level data for the Structured Transaction both before and after the release/substitution occurs; and
- any other items required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| 416.06 | |
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Revaluations of Credit FacilitiesCredit FacilitiesStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. and Bulk DeliveriesBulk DeliveriesStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. occur as required by the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. and Bulk Delivery Agreement. ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send recommended property cap rates and values along with supporting market information through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Upon completion of Fannie Mae’s review, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. will be notified of the final cap rate determination and valuation. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify the BorrowerBorrowerPerson who is the obligor per the Note. of the revised cap rates, PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). values, Allocable Facility AmountsAllocable Facility AmountsFor a Credit Facility, the amount of debt allocated to a given Property, used in calculating tests for collateral activity such as releases, substitutions, and additions. , 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. , and the failure to meet any compliance tests (if applicable). The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must attach a copy of this BorrowerBorrowerPerson who is the obligor per the Note. correspondence to the request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
Supplemental Mortgage LoansSupplemental Mortgage LoansMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. on PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). that are part of a Credit FacilityCredit FacilityStructured Transaction governed by a Master Credit Facility Agreement requiring Mortgage Loans and Properties to be cross-defaulted, and cross-collateralized. or a Bulk DeliveryBulk DeliveryStructured Transaction governed by a Bulk Delivery Agreement that allows future: Mortgage Loan additions; and/or Property substitutions. are not permitted unless expressly authorized under the Master Credit Facility AgreementMaster Credit Facility AgreementAgreement evidencing the terms and conditions of a Credit Facility. , Bulk Delivery Agreement, and other Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. before underwriting a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. .
| 416.08 | |
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For any issue not covered in this Section, or if the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. requires a more detailed explanation, contact Multifamily Structured Asset ManagementMultifamily Structured Asset ManagementTeam that can be contacted at [email protected]. .
| Section 417 | |
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| 417.01 | |
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The requirements in this Section may not apply to every Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. 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. . The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for specific requirements.
Decisions and actions covered by the Delegated Transaction Form (Form 4636 series) are delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. as set forth in the applicable Form 4636 series or the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. . For these requests, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit the completed applicable Form 4636 series through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Decisions and actions for Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. 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. regarding the following are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. :
- Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. expansions/conversions, including constructing additional units, substantial alterations, Seniors Housing Major RenovationsSeniors Housing Major RenovationsPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. , and Seniors Housing Minor RenovationsSeniors Housing Minor RenovationsPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…;
- changes in the Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. operator;
- changes in PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). management or management agreements;
- changes in licensing (Note: All licensing changes require an Opinion of Borrower’s Counsel on Origination of Mortgage Loan (Seniors Housing Licensing) (Form 6450.SRS) confirming that all licensing requirements have been met);
- Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. operator LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. ; and
- master leases.
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has any questions regarding the need for Fannie Mae approval, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must contact Multifamily Seniors Housing Property Asset ManagementMultifamily Seniors Housing Property Asset ManagementTeam that can be contacted at [email protected]. before proceeding.
| 417.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refer to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and this Section to determine whether Fannie Mae approval is required for a particular request. If Fannie Mae approval is required, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a request through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Any approval request must include the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. recommendation, any supporting documentation (including references to the relevant sections of the governing documents), and the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. analysis supporting its recommendation.
Unless expressly permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , requests by the BorrowerBorrowerPerson who is the obligor per the Note. for the construction of additional units, renovation, or expansion of a Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. , or a change in the overall percentage of one Seniors HousingSeniors HousingMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. type of unit (e.g., Independent LivingIndependent LivingSeniors Housing providing limited programs of assistance for domestic activities (e.g. meals, housekeeping, activities, transportation, etc.), and typically resembles market rate units. , Assisted LivingAssisted LivingSeniors Housing Property offering services limited to non-medical personal care, including ADL assistance, which are typically licensed and regulated by a state or local governmental authority. , or Alzheimer’s/Dementia CareAlzheimer’s/Dementia CareSeniors Housing Property with units and beds for residents with significant cognitive impairment resulting from Alzheimer’s disease or other dementia, which are typically licensed and regulated by a state or local government authority. ) into another are not delegated to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . The BorrowerBorrowerPerson who is the obligor per the Note. must request approval from the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. and Fannie Mae before proceeding, and Fannie Mae will consider these requests under the following parameters, conditions, and requirements:
| 417.04A | |
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To allow for the construction of additional units on existing land, or the renovation and/or repositioning of existing units:
- a “Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. ” is any physical improvement costing in excess of (i) $20,000/unit, or (ii) $3 million in total project costs; and
- a “Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…” is any physical improvement that is not a Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. , but which increases the number of units, or converts one type of unit into another, unless expressly permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
| 417.04B | |
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Upon receipt of a Borrower Seniors Housing Expansion/Conversion Request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a written request through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , and include the following:
- SponsorSponsorPrincipal equity owner and/or primary decision maker of the Borrower (often the Key Principal or the Person Controlling the Key Principal). name and experience in operating seniors housing properties;
- 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. performance;
- financial performance (including 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… and UPBUPBUnpaid Principal Balance history, and 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. and 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. trends);
- pro forma financial statements;
- sources/uses of funds statement;
- project budget, scope, and plans;
- market study;
- construction contract and timeline;
- Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. monitoring plan;
- licensure issues;
- insurance; and
- general contractor and major subcontractors.
Fannie Mae will review the completed request, and approve or decline the request in its sole discretion.
| 417.04C | |
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For a Seniors Housing Expansion/Conversion Request approved by Fannie Mae, the following requirements will apply:
- Escrow:
- the BorrowerBorrowerPerson who is the obligor per the Note. must escrow 25% of the estimated construction costs with the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , who will administer the funds through a standard construction draw process; and
- the BorrowerBorrowerPerson who is the obligor per the Note. must demonstrate to the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. satisfaction that it has sufficient liquid assets to complete the construction;
- Minimum 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. during the expansion/conversion period cannot fall below 1.15x;
- Completion of construction must occur no later than 18 months from the date of commencement;
- Construction monitoring requirements will be set forth in the approval letter;
- Fannie Mae will charge a construction monitoring fee which does not cover the expenses associated with third-party inspections;
- Completion Guaranty (Form 6018, Form 6632, or Form 6633) and, if determined applicable by Fannie Mae, an Agreement and Assignment Regarding General Contractor’s Contract (Form 6473), and an Omnibus Assignment of Contracts, Plans, Permits, and Approvals (Form 6473), will be required;
- Fannie Mae will charge a change in use fee, and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge additional fees at its discretion, subject to approval by Fannie Mae;
- The BorrowerBorrowerPerson who is the obligor per the Note. must reimburse all legal costs incurred by Fannie Mae; and
- A fixed-price general construction contract provided by a general contractor, together with a payment and performance bond issued by an acceptable surety, will be required.
Within 60 days of completing any Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. or Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…, the BorrowerBorrowerPerson who is the obligor per the Note. must deliver to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must provide to Fannie Mae, the following:
- title endorsement to the existing mortgagee title policy, confirming that no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist that have not been acceptably bonded over;
- final lien waivers from all contractors, architects, subcontractors, and material suppliers;
- copies of updated or newly issued certificates of occupancy;
- renewed licenses;
- confirmation in the form of an Opinion of Borrower’s Counsel on Origination of Mortgage Loan (Seniors Housing Licensing) (Form 6450.SRS) that all licensing requirements have been met;
- certificate from the BorrowerBorrowerPerson who is the obligor per the Note.
, architect, and contractor certifying to the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
, for the benefit of Fannie Mae, that the improvements:
- are completed in accordance with the plans and specifications approved by Fannie Mae; and
- meet the local zoning and planning restrictions, and all other governmental requirements;
- final inspection of completed ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). ;
- updated certified operating statement and rent roll for the Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. ; and
- a survey showing any new ImprovementsImprovementsBuildings, structures, improvements, and alterations, including the multifamily housing dwellings, now or hereafter constructed or placed on the Property, including all fixtures (as defined in the UCC). on the Seniors Housing PropertySeniors Housing PropertyMultifamily residential rental property with any combination of Independent Living, Assisted Living, Alzheimer’s/Dementia Care, or Skilled Nursing units. .
Within 60 days of completion of any Seniors Housing Major RenovationSeniors Housing Major RenovationPhysical improvement at a Seniors Housing Property costing more than $20,000/unit, or $3 million in total project costs. or Seniors Housing Minor RenovationSeniors Housing Minor RenovationPhysical improvement at a Seniors Housing Property that is not a Seniors Housing Major Renovation, but which increases the number of units, or converts one type of unit (e.g., Independent Living, Assisted Living, or Alzheimer’s/Dementia Care) into another, unless expressly permitted by the Loan…, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must request any applicable change in unit count and/or unit mix (ILILSeniors Housing providing limited programs of assistance for domestic activities (e.g. meals, housekeeping, activities, transportation, etc.), and typically resembles market rate units. , ALALSeniors Housing Property offering services limited to non-medical personal care, including ADL assistance, which are typically licensed and regulated by a state or local governmental authority. , ALZALZSeniors Housing Property with units and beds for residents with significant cognitive impairment resulting from Alzheimer’s disease or other dementia, which are typically licensed and regulated by a state or local government authority. ) in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. resulting from the renovation.
For any Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. where Fannie Mae is providing credit enhancement for tax-exempt multifamily housing BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. , the BorrowerBorrowerPerson who is the obligor per the Note. must provide the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. with a copy of the compliance monitoring statement required under the Bond Documents. If the Borrower’sBorrower’sPerson who is the obligor per the Note. statement reflects noncompliance with the low- and moderate-income tenant occupancy requirements set forth in the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower…, or if the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide the statement to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , and retain the compliance monitoring statement in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the Interest Reserve Requirement, if any, under the Bond Trust Indenture with respect to each Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the rating of the institution in which the accounts under any Cash Management, Security, Pledge, and Assignment Agreement are held, and must require the BorrowerBorrowerPerson who is the obligor per the Note. to move the accounts if the rating no longer meets Fannie Mae’s requirements as provided in Part V, Chapter 3: Custodial Accounts.
| 418.03A | |
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At least once in each calendar year (and more often if directed by Fannie Mae), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a BorrowerBorrowerPerson who is the obligor per the Note. certification that 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 in full compliance with:
- the rules qualifying the interest on the BondsBondsTax-exempt or taxable multifamily revenue bonds, or other tax-exempt or taxable bonds, issued to finance 1 or more Credit Enhancement Mortgage Loan Properties. for exclusion from gross income for federal income tax purposes pursuant to the Internal Revenue Code; and
- the requirements of the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must review the BorrowerBorrowerPerson who is the obligor per the Note. certificate, 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). does not comply with all applicable regulatory requirements, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. . Neither Fannie Mae nor the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for determining or ensuring the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance under the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. , the BorrowerBorrowerPerson who is the obligor per the Note. , the Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , and the IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. in writing of any default by a BorrowerBorrowerPerson who is the obligor per the Note. with any provision of any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Reimbursement Agreement, Security Agreement, the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower…, or other Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , Credit Enhancement Document, or Bond Document.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly forward to Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. copies of any notices received from a BorrowerBorrowerPerson who is the obligor per the Note. , Bond TrusteeBond TrusteeTrustee for a Credit Enhancement Instrument. , IssuerIssuerEntity that: issues Bonds for a Credit Enhancement Mortgage Loan; packages mortgages for sale as a Security for an MBS; or issues a Letter of Credit. , or any other party regarding any default by a BorrowerBorrowerPerson who is the obligor per the Note. , and shall maintain ongoing contact with Fannie Mae regarding the status of the Credit Enhancement Mortgage LoanCredit Enhancement Mortgage LoanMortgage Loan financed by a Bond issuance where Fannie Mae provides credit enhancement by a Credit Enhancement Instrument, or an MBS for Bonds. by submitting a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must collect annual compliance documentation in the form of:
- for an MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. with Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. , certifications from the BorrowerBorrowerPerson who is the obligor per the Note. and Administering AgentAdministering AgentThird-party compliance monitoring company. of compliance with the Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. Agreement; or
- for any other MAH PropertyMAH PropertyProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. , the annual recertification of 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). compliance with the Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower… from the agency or entity that imposed any applicable rent or occupancy restrictions or, if not available, an explanation of why it is not available.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. to notify Multifamily Asset ManagementMultifamily Asset ManagementTeam that can be contacted at [email protected]. if this documentation reveals any event of default or noncompliance with the applicable:
- Sponsor-Initiated AffordabilitySponsor-Initiated AffordabilityVoluntary rent and income restrictions recorded against the Property by the Borrower to preserve or create multifamily affordable housing. Agreement; or
- Affordable Regulatory AgreementAffordable Regulatory AgreementRegulatory, land use, extended use, or similar agreement or recorded restriction limiting rents, imposing maximum income restrictions on tenants, or placing other affordability restrictions on the use or occupancy of the Property (whether imposed by a government entity or self-imposed by a Borrower….
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain the annual compliance documentation in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
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 subject to a Low-Income Housing Tax CreditLow-Income Housing Tax CreditFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. allocation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain, at least once in each calendar year (and more often if directed by Fannie Mae):
- copies of the tax and other compliance forms specified in Part III, Chapter 7: Multifamily Affordable Housing Properties; and
- BorrowerBorrowerPerson who is the obligor per the Note. certifications of 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). compliance with the requirements of the Internal Revenue Code regarding Low-Income Housing Tax CreditsLow-Income Housing Tax CreditsFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. ; and
- if the Low-Income Housing Tax CreditsLow-Income Housing Tax CreditsFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. have not yet been syndicated, monthly reports from the BorrowerBorrowerPerson who is the obligor per the Note. detailing the Borrower’sBorrower’sPerson who is the obligor per the Note. progress in syndicating the tax credit allocation until the syndication is completed.
If the BorrowerBorrowerPerson who is the obligor per the Note. indicated that 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). does not comply with all applicable regulatory requirements, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default BorrowerBorrowerPerson who is the obligor per the Note. Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. . Neither Fannie Mae nor the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is responsible for determining or ensuring the Borrower’sBorrower’sPerson who is the obligor per the Note. compliance with Low-Income Housing Tax CreditLow-Income Housing Tax CreditFederal program offering tax credits to owners of eligible properties that contain low-income occupants and rent restrictions. requirements. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. also must comply with the information requirements of Part III, Chapter 7: Multifamily Affordable Housing Properties.
| 418.06 | |
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The BorrowerBorrowerPerson who is the obligor per the Note. must annually recertify 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). and submit each recertification to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. within 75 days following the end of each 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 servicing the Mortgage Loan, including the originator, seller, or a third party. must collect the initial certification and each recertification in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. . For any recertification failure, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly notify Fannie Mae through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. , or such other method indicated by Fannie Mae. Additionally, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must promptly submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. 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). later achieves recertification. After recertification, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then resume annual compliance monitoring at the end of each subsequent 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. .
| 418.07 | |
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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. with an Expanded Housing Choice pricing incentive requires additional monitoring.
Fannie Mae:
- may conduct fair housing testing for 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. delivered with an Expanded Housing Choice pricing incentive; and
- will notify the ServicerServicerPrimary Person servicing the Mortgage Loan, including
the originator,
seller, or
a third party.
if the fair housing testing or any other information reveals the BorrowerBorrowerPerson who is the obligor per the Note.
is not complying with Part III, Chapter 23: Expanded Housing Choice; and may, for any noncompliance:
- require the Borrower'sBorrower'sPerson who is the obligor per the Note. employees to complete fair housing training;
- require Supplemental Annual Loan Agreement Certification (Expanded Housing Choice) (Form 6620.Supplemental.Expanded Housing Choice); and/or
- notify the BorrowerBorrowerPerson who is the obligor per the Note. it is in default.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- if not already received by April 15, notify the BorrowerBorrowerPerson who is the obligor per the Note. a rent roll or rent schedule dated as of December 31st of the previous year is due 120 days after the end of the prior calendar year;
- within 120 days after each December 31:
- comply with the following table for any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. defaults; and
- retain in its Servicing FileServicing FileYour file for each Mortgage Loan serviced.
, copies of:
- Form 4241;
- any required Form 6620.Supplemental.Expanded Housing Choice; and
- any BorrowerBorrowerPerson who is the obligor per the Note.
notices, including Reservation of Rights Letters (Form 4804), required for:
- fair housing training; or
- Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. defaults.
| If the Borrower... | The Servicer must... |
|---|---|
| Fails to submit the December 31 rent roll or rent schedule for the prior year within 120 days after the end of the calendar year |
|
| Fails to submit the December 31 rent roll or rent schedule for the prior calendar year within the 30-day period after receipt of the Reservation of Rights Letter |
collect from the BorrowerBorrowerPerson who is the obligor per the Note. and remit to Fannie Mae the Expanded Housing Choice Monetary Penalty per Form 6273. |
| Fails to submit any required Expanded Housing Choice Monetary Penalty per Form 6273 | |
| Fails a first round of fair housing testing |
ensure the BorrowerBorrowerPerson who is the obligor per the Note. conducts fair housing training for its employees per Fannie Mae’s requirements. |
| Fails a second round of fair housing testing |
|
| Fails to complete any required fair housing training within the required time frame | |
| Fails to provide any required Supplemental Annual Loan Agreement Certification (Expanded Housing Choice) (Form 6620.Supplemental.Expanded Housing Choice) | |
| Fails a third round of fair housing testing | |
| Is otherwise determined not to be complying with Part III, Chapter 23: Expanded Housing Choice |
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- approve renewal of the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. 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; and
- waive any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. provision requiring the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. to be fully funded by HUDHUDU.S. Department of Housing and Urban Development through 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. a copy of the renewed HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. ContractContractProgram Documents per the Multifamily Selling and Servicing Agreement. , and retain a copy in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , together with any BorrowerBorrowerPerson who is the obligor per the Note. request for release of the Restabilitzation Reserve.
Most disbursements from a Restabilization Reserve require Fannie Mae’s approval. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to approve, without Fannie Mae’s consent, a BorrowerBorrowerPerson who is the obligor per the Note. request for a final disbursement, provided:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has received written evidence that the HAPHAPHUD project-based Section 8 rental subsidy in the form of a Housing Assistance Payment contract. contract has been extended by HUDHUDU.S. Department of Housing and Urban Development through the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. with no material changes to its terms;
- no default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. explicitly allow a final disbursement under these conditions.
| Section 419 | |
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Per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , to monitor an SDW Housing Property, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- annually review the rent roll and sufficient lease files to determine BorrowerBorrowerPerson who is the obligor per the Note. compliance with the required rent restrictions;
- receive an annual Supplemental Annual Loan Agreement Certification (Sponsor-Dedicated Workforce Housing) (Form 6620.Supplemental.SDW) from the BorrowerBorrowerPerson who is the obligor per the Note.
, and:
- attest to the Form 6620.Supplemental.SDW that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has audited the rent roll for BorrowerBorrowerPerson who is the obligor per the Note. compliance with the required rent restrictions; or
- for any noncompliance:
- notify the BorrowerBorrowerPerson who is the obligor per the Note. of the default; and
- submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. ;
- retain in the Servicing FileServicing FileYour file for each Mortgage Loan serviced.
, copies of:
- Modifications to Multifamily Loan and Security Agreement (Sponsor-Dedicated Workforce Housing) (Form 6271.SDW);
- Modifications to Security Instrument (Sponsor-Dedicated Workforce Housing) (Form 6325);
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). rent restrictions;
- annual rent roll and compliance results; and
- any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default BorrowerBorrowerPerson who is the obligor per the Note. notices; and
- per the Sponsor-Dedicated Workforce (SDW) Housing Job Aid, annually submit copies of the:
- Form 6620.Supplemental.SDW and ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. attestation; and
- PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). rent roll.
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. secured by an MH CommunityMH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. with Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… requires additional monitoring. The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the BorrowerBorrowerPerson who is the obligor per the Note. to annually provide:
- a certified copy of the current residential MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. form;
- a certified copy of the notice sent to all MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. tenants if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… were implemented by the Rules and Regulations;
- copies of any actual MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. requested by LenderLenderPerson Fannie Mae approved to sell or service Mortgage Loans. ; and
- a certification of the actual percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. that include all required Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…, and that no material changes have been made to the MH Community’sMH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. rules and regulations or to the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. form.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- confirm the Borrower'sBorrower'sPerson who is the obligor per the Note. ongoing compliance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with:
a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists;
a minimum 30-day written notice of rent increases;
5-day minimum grace period for non-payment of rent,… were implemented within the MH Community’sMH Community’sResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure.
rules and regulations, confirm:
- the rules and regulations contain all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… and are publicly posted in the MH CommunityMH CommunityResidential real estate development with lots on which manufactured homes are located, together with amenities, utility services, landscaping, roads, and other infrastructure. ; and
- each MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. tenant received written notice of all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… added to the rules and regulations;
- if the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with:
a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists;
a minimum 30-day written notice of rent increases;
5-day minimum grace period for non-payment of rent,… were implemented within the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
:
- confirm the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
form includes:
- all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…; and
- the required percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. (i.e., 25%, 50%, or 100%) are covered by the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,…; and
- annually audit at least 25% of the minimum percentage of MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeasesLeasesWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. required per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. (i.e., 25%, 50%, or 100%) to ensure all Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… are included;
- confirm the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located.
LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent.
form includes:
- determine whether the BorrowerBorrowerPerson who is the obligor per the Note. complied with all terms of the Tenant Site Lease ProtectionsTenant Site Lease ProtectionsMH Site Lease with the Homeowner or tenant of a Manufactured Home with: a 1-year renewable (at the MH Site Lease tenant’s election) lease term, unless good cause for nonrenewal exists; a minimum 30-day written notice of rent increases; 5-day minimum grace period for non-payment of rent,… (e.g., the BorrowerBorrowerPerson who is the obligor per the Note. only raised MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. rents after required notice);
- retain the review of the Borrower'sBorrower'sPerson who is the obligor per the Note. certification and audit results in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. ; and
- notify Multifamily Loss MitigationMultifamily Loss MitigationTeam that can be contacted at [email protected]. if the BorrowerBorrowerPerson who is the obligor per the Note. fails to certify compliance, or the MH SiteMH SiteDeveloped lot within an MH Community on which a Manufactured Home can be located. LeaseLeaseWritten agreement between an owner and the tenant of a Property stipulating the conditions for possession and use of real estate for a specified period of time and rent. audit discloses potential noncompliance.
| Section 421 | |
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If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. require the BorrowerBorrowerPerson who is the obligor per the Note. to convert into a single asset entity that complies with Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 302.01: Single-Asset Entity by a certain date, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to:
- grant a one-time extension of the date by up to 90 days;
- determine whether the extension requires an amendment to the Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. ; and
- document it in any form that the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. deems legally enforceable.
| Section 422 | |
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Provided the change does not violate the Disclosure DocumentsDisclosure DocumentsDocuments for an Investor for a particular Securitized Mortgage Loan, which may include the MBS Trust Agreement, Prospectus, and any related documents. or the Fannie Mae Master Trust Agreement, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to modify the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for a Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. to:
- align with the approved terms for a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. ; or
- cross-default and/or cross-collateralize the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. with a subsequent 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. .
This delegated authority includes executing all Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendments related to:
- a subordinate lien, including 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. modification for a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. with a confirmed 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. ;
- cross-collateralizing and/or cross-defaulting a Pre-Existing Mortgage LoanPre-Existing Mortgage LoanMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. with a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. with a confirmed 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
- cross-collateralizing and/or cross-defaulting a first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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 another first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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. (e.g., for a phased property), provided that cross-collateralization and cross-default were contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. and there is a confirmed 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. for the second first LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. 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. .
| Section 423 | |
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| 423.01 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must establish a written policy for maturing 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. , including:
- overall monitoring responsibilities;
- criteria for handoffs between functional groups (e.g., Special Asset ManagementSpecial Asset ManagementTeam performing Fannie Mae’s Special Servicing that can be contacted at [email protected]. , Special Credits, etc.);
- Fannie Mae reporting;
- sending BorrowerBorrowerPerson who is the obligor per the Note. maturity notification letters; and
- determining the Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. refinance eligibility.
| 423.02 | |
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On a monthly basis, beginning at least 24 months before each Mortgage Loan’sMortgage Loan’sMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must evaluate 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). operating performance to determine the likelihood that 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. UPBUPBUnpaid Principal Balance can be refinanced based on the current cap rate, and the 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. and 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… from 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). most recent annual financial statement.
Participants from the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. underwriting, asset management, portfolio management, and finance teams must coordinate to categorize each 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. as either:
- “Meets Criteria” = 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. qualifies for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party; or
- “Does Not Meet Criteria” = 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. does not qualify for refinancing based on the currently published underwriting criteria of Fannie Mae or a third party.
For each 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. categorized as “Does Not Meet Criteria”, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- review 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). quarterly operating statements and analyze the operating expenses (especially repairs & maintenance and capital expenses) to assess whether the BorrowerBorrowerPerson who is the obligor per the Note. is prudently managing 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). ; and
- work with the BorrowerBorrowerPerson who is the obligor per the Note. and Fannie Mae to ensure the BorrowerBorrowerPerson who is the obligor per the Note. has a reasonable payoff plan.
| 423.03 | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the following maturity notification letters to the BorrowerBorrowerPerson who is the obligor per the Note. :
- 18 months before 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. Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , send the first maturity notification letter notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. (18 Month Notice to Borrower – Choice Refinance Loans (Form 4217)).
- 12 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the applicable second maturity notification letter (12 Month Notice to Borrower Marketing Oriented – Choice Refinance Loans (Form 4218) or 12 Month Notice to Borrower – In Place Loans (Form 4219)):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- providing ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. contact information; and
- requesting a detailed payoff plan.
- 6 months before 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.
Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents.
, send the 6 Month Notice to Borrower – In Place Loans (Form 4220):
- notifying the BorrowerBorrowerPerson who is the obligor per the Note. of the upcoming Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. ;
- requesting proof of a payoff plan (e.g., a commitment letter from another lender or sale contract); and
- advising the BorrowerBorrowerPerson who is the obligor per the Note. that 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. will be in default if not paid off or refinanced.
Within 6 months of the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must aggressively pursue a maturity solution for 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. that “Does Not Meet Criteria” until the BorrowerBorrowerPerson who is the obligor per the Note. provides written proof of a payoff plan, which may include a certified escrow letter, contact information for the new lender with appropriate follow-up by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , or other reasonable evidence.
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On the first Business DayBusiness DayAny 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, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. of each month, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit a Maturing Loan Report using the mandated template to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. with information on each 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. maturing within the next 24 months (or advising that no 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. are maturing within the next 24 months), and categorizing each as “Meets Criteria” or “Does Not Meet Criteria” in the Performance Rating column. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must also update the Maturing Loan Report as new information becomes available with each monthly submission.
The comments section of the Maturing Loan Report must include, at a minimum:
- a report of discussions with the BorrowerBorrowerPerson who is the obligor per the Note. (e.g., potential new lender, term of new loan, proof of payoff plan received);
- the anticipated payoff date; and
- whether 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 likely or not to refinance, and the rationale.
All other Fannie Mae notices related to maturing 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. , including default notices, must be sent to Multifamily Maturity ManagementMultifamily Maturity ManagementTeam that can be contacted at [email protected]. .