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/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that are specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .  The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may authorize the release of funds to cover the costs of other reasonable and necessary repairs, replacements, or improvements that are not specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  only if the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit the disbursements, and all conditions are fully satisfied. 

2.  Required Documentation for Disbursement

To obtain reimbursement, the BorrowerBorrowerPerson who is the obligor per the Note. must submit a written requisition specifying the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought, including:

  • the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. completed;
  • the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased in connection with the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ; and
  • the cost of all contracted labor or other services involved in completing the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .

The BorrowerBorrowerPerson who is the obligor per the Note. requisition for the specified Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. for which reimbursement is being sought must be accompanied by:

  • a BorrowerBorrowerPerson who is the obligor per the Note. certification that the specific Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. have been completed:
    • in a good and workmanlike manner;
    • in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
    • in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; and
  • if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance : 
    • a copy of the invoice detailing the covered materials, labor, or services;
    • payment evidence; and
    • a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman. 

3.  Disbursement of Funds (Excluding Final Disbursement)

 The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may disburse funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if it has received all required documentation and determined that all applicable conditions for disbursement have been met, including (but not limited to) the following:

  • all Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. covered by the requisition have been completed in a good and workmanlike manner, as evidenced by the Borrower’sBorrower’sPerson who is the obligor per the Note. submission and, if appropriate, an inspection of the completed work (see guidance on inspections below);
  • all related invoices for items and services covered by the requisition have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.  for issuance of a joint check(s), made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds under such invoices;
  • no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist, unless acceptably bonded over; 
  • no default exists under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
  • for each Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. disbursement, the Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. was reported as:
  • for a Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. with a Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored… as an Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. , Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. funds are only released after confirming commercial operation of the Solar PV SystemSolar PV SystemA renewable energy system located on the Property that converts sunlight into electricity and/or a battery storage system containing lithium ion batteries or equivalent technology capable of storing electricity received from the electric grid or a renewable energy system and delivering stored….

The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. for any requisition, other than the final requisition, may not exceed the actual cost of the Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and may be less than the actual cost if, after disbursement, the amount of funds remaining in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. would be less than the anticipated cost of completing all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. plus any holdback specified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

Notwithstanding the above, once 75% of the total dollar amount of Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. is disbursed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , provided:

  • funds are only released for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. that have been fully completed;
  • the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. has complied with all other disbursement requirements;
  • the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. completes an analysis showing that the remaining amount in the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. is sufficient to complete all remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. ;
  • the BorrowerBorrowerPerson who is the obligor per the Note. affirms in writing its obligation to complete the remaining Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. by the required completion dates; and
  • the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents.  is not for a Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasureEfficiency MeasureEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. that must be released per Part V, Chapter 4: Asset Management: Loan Document Administration, Section 408.03I: Green Rewards Efficiency Measure Verification. 

For Green RewardsGreen RewardsMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. included in a Moderate RehabilitationModerate RehabilitationProperty that will undergo at least $8,000 per unit of Rehabilitation Work. Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. , funds may be periodically disbursed from the applicable Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. or Rehabilitation Reserve Escrow as with a non-Green Rewards Mortgage LoanGreen Rewards Mortgage LoanMortgage Loan secured by a Property where the Borrower agrees to undertake 1 or more Energy- and Water-Efficiency Measures that comply with Part III, Chapter 4: Green Mortgage Loans, Section 403: Green Rewards Mortgage Loans. , rather than only after a compliant verification inspection of Efficiency MeasuresEfficiency MeasuresEnergy- and water-efficiency measures that the Borrower agrees to implement per the Multifamily Loan Agreement to qualify as a Green Rewards Mortgage Loan, and which project a reduction in the Property's annual energy or water consumption. .

4.  Final Disbursement of Funds

Before making the final disbursement of funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm and document the absence of any mechanics’ and materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. by requiring the BorrowerBorrowerPerson who is the obligor per the Note. to obtain an updated title report or a title policy endorsement showing that no such LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. exist.  The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may waive the updated title report or endorsement when the total scope of work is less than $75,000.  If the BorrowerBorrowerPerson who is the obligor per the Note. fails to provide the required title documentation, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must obtain a title report or title policy endorsement, and may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost.

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may make a final disbursement of all remaining funds upon satisfactory completion of all required Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , and satisfaction of all other applicable release conditions contained in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for Completion/RepairsCompletion/RepairsRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. .

5.  Maintenance of Servicing File

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must document the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Completion/Repair EscrowCompletion/Repair EscrowCustodial Account funded on the Mortgage Loan Origination Date for Completion/Repairs or capital improvements per the Loan Documents. in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .