Section 408

Administration of Collateral Agreements

408.01	General Administrative Requirements

408.01A	Administration of Funds

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. ; 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. and this Section.

408.01B	Funds to be Held in a Custodial Account

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must deposit funds held under a Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. 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	Use of Funds

Funds must be used only for the purposes stated in the Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. .

408.01D	Funds as Additional Security for Mortgage Loan

All funds or other collateral held under a Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. constitute additional security for the BorrowerBorrowerPerson who is the obligor per the Note. ’s 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. . In the event of a default under the Loan DocumentsLoan DocumentsAll executed 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. in any manner allowed under the terms of such Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. . 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. ;
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	Servicer’s Fees and Costs

If the Collateral AgreementCollateral AgreementAgreement under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. . 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , or if the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.

408.01F	Waiver or Modification of Terms of Collateral Agreement

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. .

408.02	Achievement Agreement or Other Agreement for Additional Collateral

408.02A	General

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , 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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital… 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 obligations under the Loan Documents. ;
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 other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to perform Completion/Repairs and other identified capital improvements; terms for funding the repairs, maintenance, or capital items; and ….

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , 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] .

408.02B	Releases or Reductions in Collateral

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. .

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. , 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. . Based on the Loan DocumentsLoan DocumentsAll executed 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 202: 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. 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 202: 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 202: 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 PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ’s 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. deposits, are included, and that any inappropriate expenses (e.g., capital improvement costs, repair costs covered by funds set aside under a Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to perform Completion/Repairs and other identified capital improvements; terms for funding the repairs, maintenance, or capital items; and …, 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 BorrowerBorrowerPerson who is the obligor per the Note. ’s 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 BorrowerBorrowerPerson who is the obligor per the Note. ’s 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. .

(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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s 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.

408.02C	Draws on Letters of Credit or Application of Other Collateral

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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. :

a default under the Loan DocumentsLoan DocumentsAll executed 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. ;
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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. ; 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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. .

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 BorrowerBorrowerPerson who is the obligor per the Note. ’s 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 under which collateral (other than the Property) may be pledged, transferred, or otherwise provided to secure the Borrower’s obligations under a Mortgage Loan. are satisfied; or
the BorrowerBorrowerPerson who is the obligor per the Note. pays all amounts due and payable under the Loan DocumentsLoan DocumentsAll executed 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 obligations under the Loan Documents. .

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 executed 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 executed 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. .

408.02D	Releasing Additional Escrows for Principal and Interest, Taxes and Insurance, and Replacement Reserves

Notwithstanding anything contained in this Chapter, if no Event of Default has occurred and is continuing under any of the Loan DocumentsLoan DocumentsAll executed 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 executed 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 executed 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	Completion/Repairs

408.03A	General

The Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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 executed 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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital…;
- 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 executed 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 other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to perform Completion/Repairs and other identified capital improvements; terms for funding the repairs, maintenance, or capital items; and ….

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must administer the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to ensure the timely implementation of all Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). . Once the Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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.

408.03B	Extensions for Completion/Repairs

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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). if:

the Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). .

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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). , 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for that Completion/RepairCompletion/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). , 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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 executed 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.

408.03C	Completion/Repair Loan Document Amendments

ServicersServicersPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. are delegated the authority to move required Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital… 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 other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to perform Completion/Repairs and other identified capital improvements; terms for funding the repairs, maintenance, or capital items; and … 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. , provided:

the Completion/RepairCompletion/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). does not involve life safety issues;
delaying the Completion/RepairCompletion/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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 executed 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 executed 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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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. .

408.03D	Servicer’s Administrative Requirements

For all Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). , 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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital… or Completion/Repair AgreementCompletion/Repair AgreementThe 4000 series Completion/Repair Security Agreement (Form 4505), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to perform Completion/Repairs and other identified capital improvements; terms for funding the repairs, maintenance, or capital items; and … 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 executed 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 402: Property Condition Assessment (PCA) for capital improvements identified as Immediate Repairs by the PCAPCAAssessment of the current physical condition and historical operation of the Property. ;
process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll executed 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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). Loan DocumentLoan DocumentAll executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). ; and
perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). .

408.03E	Processing Borrower Requisitions

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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). that are specifically identified in the Loan DocumentsLoan DocumentsAll executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. only if the Loan DocumentsLoan DocumentsAll executed 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). for which reimbursement is being sought, including:

the specific Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). ; and
the cost of all contracted labor or other services involved in completing the Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). .

The BorrowerBorrowerPerson who is the obligor per the Note. requisition for the specified Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). covered by the requisition have been completed in a good and workmanlike manner, as evidenced by the BorrowerBorrowerPerson who is the obligor per the Note. ’s 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 executed 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 executed 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). , 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). plus any holdback specified in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

Notwithstanding the above, once 75% of the total dollar amount of Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). ;
the BorrowerBorrowerPerson who is the obligor per the Note. affirms in writing its obligation to complete the remaining Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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 for Secondary Risk Mortgage LoansSecondary Risk Mortgage LoansMortgage Loan where the Lender bears all losses until the Lender’s recourse obligations are exhausted. 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). , and satisfaction of all other applicable release conditions contained in the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). .

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	Inspections

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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). :

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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s discretion.

3. When a Final Inspection Is Required

An inspection must be performed to ensure that all Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). have been satisfactorily completed before approving and disbursing the final requisition when the Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). 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	Fees

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 executed 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 ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s costs of administering the Completion/RepairsCompletion/RepairsImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). ; 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	Completion/Repair Defaults

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/RepairImmediate Repairs identified by the Property Condition Assessment and required by the Lender to be included in the Completion/Repair Schedule or Completion/Repair Agreement (or a Certificate of Borrower, if applicable). Loan DocumentLoan DocumentAll executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

408.03I	Green Rewards Efficiency Measure Verification

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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital…. 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:

low-flow water fixtures; or
lighting improvements.

must ensure the inspector is either a qualified third-party or 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:

heat recovery ventilation systems; or
boiler controls.

For 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… 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a
- Solar Technical Consultant per Part III, Chapter 4: Green Mortgage Loans, Section 401.03: Technical Solar Report, or
- qualified PCA High Performance Building Consultant per the Instructions for Performing a Multifamily Property Condition Assessment (Form 4099).
For other 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. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must retain a qualified PCA High Performance Building Consultant per Form 4099.

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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital… 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	Replacement Reserve

408.04A	General

The Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Replacement ReservesReplacement ReservesCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

The Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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. .

408.04B	Replacement Reserve Loan Document Amendments

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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to revise the terms governing the Replacement ReservesReplacement ReservesCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. , only the changes expressly permitted by this Section can be made, and the delegation does not expand the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ’s ability to change or modify any other term of the Loan DocumentsLoan DocumentsAll executed 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. .

408.04C	Servicer’s Administrative Requirements

For all Replacement ReservesReplacement ReservesCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. , 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
ensure that all required deposits are made to the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. in accordance with the Loan DocumentsLoan DocumentsAll executed 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 executed 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. Loan DocumentLoan DocumentAll executed 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Replacements, Repairs, or Restoration; and
reassess the adequacy of the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. or the schedule of required deposits; and
perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. .

408.04D	Modifications to Replacement Reserve Deposits

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 current physical condition and historical operation of the Property. 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. funding to a sufficient level, if warranted, in accordance with the Loan DocumentsLoan DocumentsAll executed 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. ; and/or
- increase the monthly Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 current physical condition and historical operation of the Property. 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 funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. 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 agreement approved by Fannie Mae) that evidence the: Borrower’s agreement to perform Completion/Repairs and other identified capital… 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. accordingly.

408.04E	New Property Condition Assessments

1. Timing and Waivers

A new PCAPCAAssessment of the current physical condition and historical operation of the Property. 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 executed 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 current physical condition and historical operation of the Property. 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 current physical condition and historical operation of the Property. 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: Pass rating; 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 less than 1 year old; 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). condition rating of 1, 2, or 3.
1 Year to 5 Years	The new PCAPCAAssessment of the current physical condition and historical operation of the Property. 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: Pass rating; 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 report less than 1 year old; 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). condition rating of 1 or 2.
More than 5 Years	The new PCAPCAAssessment of the current physical condition and historical operation of the Property. 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: Pass rating; 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 report less than 1 year old; 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). condition rating of 1 or 2.

After 5 years, a new PCAPCAAssessment of the current physical condition and historical operation of the Property. 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 current physical condition and historical operation of the Property. 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 current physical condition and historical operation of the Property. waiver after the 10th loan year and the 15th loan year, but a new PCAPCAAssessment of the current physical condition and historical operation of the Property. is required after the 20th loan year).

All PCAPCAAssessment of the current physical condition and historical operation of the Property. waivers must be documented in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , and any PCAPCAAssessment of the current physical condition and historical operation of the Property. 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 current physical condition and historical operation of the Property. .

2. Streamlined PCA Permitted

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use Streamlined PCA Guidance (Form 4099.A) if the most recent PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). site inspection:

was performed according to Part II, Chapter 4: Inspections and Reserves, Section 401: Site Inspection and Lease Audit;
indicated an overall rating of 1 or 2; and
did not reveal any adverse change 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). condition (except normal wear and tear) or life safety issues.

3. 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 current physical condition and historical operation of the Property. 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 executed Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the cost of the PCAPCAAssessment of the current physical condition and historical operation of the Property. may be paid from funds in the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. .