408.04
| 408.04A | |
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The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for administering Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. are:
- Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, for Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. documented with the 6000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; and
- Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and…, for Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. documented with the 4000 series Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must be held by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. in a Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , and are intended to pay for necessary replacements of capital items or major maintenance work to the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). over the term of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. .
If the Servicer'sServicer'sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. Limited Power of AttorneyLimited Power of AttorneyLegal document authorizing a Servicer to execute certain Loan Documents related to the asset management of a Mortgage Loan as attorney-in-fact on behalf of Fannie Mae. delegates the authority to amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. to revise the terms governing the Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , only the changes expressly permitted by this Section can be made, and the delegation does not expand the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ability to change or modify any other term of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan Document Amendment to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
For all Replacement ReservesReplacement ReservesCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- retain a copy of the executed Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. and Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. ;
- unless the BorrowerBorrowerPerson who is the obligor per the Note. has requested in writing a non-interest bearing account, hold all funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. that meets the requirements of Part V, Chapter 3: Custodial Accounts and the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- ensure that all required deposits are made to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- process BorrowerBorrowerPerson who is the obligor per the Note. requisitions for funds in accordance with the terms and conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
- perform required inspections of completed work and, if appropriate, work in progress, and arrange, if necessary, for inspections by qualified professionals;
- ensure that work funded from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. does not result in any mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. that have not been acceptably bonded over;
- promptly submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default;
- take appropriate steps to remedy or address any default under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for ReplacementsReplacementsCapital item replacements and major maintenance needs identified by the Property Condition Assessment or otherwise required. , Repairs, or Restoration; and
- reassess the adequacy of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. or the schedule of required deposits; and
- perform all other administrative duties required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
Based on the results of a PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection or a new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. as required below, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may determine that the current level of Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding and scheduled deposits will be insufficient to meet all projected capital item or major maintenance needs. The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must then:
- adjust the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the:
Borrower’s agreement to replace identified capital items and perform required… or the Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the:
Borrower’s agreement to replace identified capital items and perform required maintenance;
terms for funding the identified capital item replacement and… and the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements.
funding to a sufficient level, if warranted, in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan.
and Part III, by requiring the BorrowerBorrowerPerson who is the obligor per the Note.
to:
- deposit a lump sum into the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and/or
- increase the monthly Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposit; and
- give the BorrowerBorrowerPerson who is the obligor per the Note. at least 30 days advance written notice prior to implementing any of the foregoing changes.
Based on the results of the new Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. obtained during the underwriting and delivery of a Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may:
- adjust the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding, scheduled deposits, and Completion/Repair ScheduleCompletion/Repair ScheduleThe Required Repair Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement, or other Fannie Mae-approved agreement, evidencing: the Borrower’s agreement to fund the Completion/Repair Escrow, and perform Completion… of all Pre-Existing Mortgage LoansPre-Existing Mortgage LoansMultifamily residential real estate loan secured by Liens against the Property having higher priority than the Lien securing the Subordinate Loan purchased by Fannie Mae. to match the Supplemental Mortgage LoanSupplemental Mortgage LoanMortgage Loan purchased by Fannie Mae that is subordinated to, and has a Mortgage Loan Origination Date after, the Senior Mortgage Loan that is also owned by Fannie Mae. underwriting; and
- amend the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. accordingly.
1. Timing and Waivers
A new full PCAPCAAssessment of the Property's physical condition and historical operation. per Form 4099 is required for:
- all MAHMAHProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). every 5 years; or
- for any other Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. with a term greater than 10 years, during the 10th Loan YearLoan YearPeriod beginning on the date of the Note and ending on the last day of the month that is 12 full months after the date of the Note, and each successive 12-month period thereafter. , and every 10 years thereafter, while the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. remains outstanding, or per the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Notwithstanding the above, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is delegated the authority to waive the new PCAPCAAssessment of the Property's physical condition and historical operation. for non-MAHMAHProperty encumbered by a regulatory agreement, land use restriction agreement, extended use agreement, or similar restriction that limits rents that can be charged to tenants, or imposes income limits on tenants. PropertiesPropertiesMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as follows:
| Remaining Loan Term | Servicer Delegation |
| Less than 1 Year |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. with a:
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| 1 Year to 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. with a:
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| More than 5 Years |
The new PCAPCAAssessment of the Property's physical condition and historical operation. may be waived for 5 years for a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. with a:
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After 5 years, a new PCAPCAAssessment of the Property's physical condition and historical operation. is required unless the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. continues to qualify for ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. waiver delegation. A PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). may only receive a PCAPCAAssessment of the Property's physical condition and historical operation. waiver twice (i.e., a Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. with a 30-year term may obtain a PCAPCAAssessment of the Property's physical condition and historical operation. waiver after the 10th loan year and the 15th loan year, but a new PCAPCAAssessment of the Property's physical condition and historical operation. is required after the 20th loan year).
All PCAPCAAssessment of the Property's physical condition and historical operation. waivers must be documented in the Servicing FileServicing FileYour file for each Mortgage Loan serviced. , and any PCAPCAAssessment of the Property's physical condition and historical operation. waiver may be rescinded by Fannie Mae or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. at any time if the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). condition warrants a new PCAPCAAssessment of the Property's physical condition and historical operation. .
2. Delivery and Payment of Property Condition Assessment
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must submit any new PCAPCAAssessment of the Property's physical condition and historical operation. to Fannie Mae through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. . Subject to the terms of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the cost of the PCAPCAAssessment of the Property's physical condition and historical operation. may be paid from funds in the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding was partially or fully waived at the Mortgage Loan Origination DateMortgage Loan Origination DateDate you fund a Mortgage Loan to the Borrower. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor the condition of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). to ensure the BorrowerBorrowerPerson who is the obligor per the Note. preserves and maintains the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). as required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or Fannie Mae determines that the BorrowerBorrowerPerson who is the obligor per the Note. is not properly preserving and maintaining the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must require the BorrowerBorrowerPerson who is the obligor per the Note. to begin making monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. in accordance with either the funding schedule set forth in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or an alternative funding schedule determined by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. .
If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. holds the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds in an interest-bearing Custodial AccountCustodial AccountAccounts established by the Servicer for depositing P&I payments, T&I funds, Collateral Agreement deposits, and other similar funds. , none of the interest earned on the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds may be retained by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. . Unless the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. is in default, all interest must be:
- added to the balance of the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; or
- paid to the BorrowerBorrowerPerson who is the obligor per the Note. if applicable law requires or the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. agrees.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are available to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for costs incurred to replace capital items or maintain major items specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds also may be used for discretionary replacements of capital items or major maintenance items that are not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , but which the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines are intended to be covered by a Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required…, such as those that would:
- correct or forestall a problem that may adversely affect the physical condition, livability, marketability, or value of the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
- directly contribute to the maintenance or enhancement of the Property’sProperty’sMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). physical condition, livability, marketability, or value; or
- likely be noted in an updated Property Condition AssessmentProperty Condition AssessmentAssessment of the Property's physical condition and historical operation. .
If Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds are used for purposes not originally contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must monitor and adjust the monthly reserve deposits to ensure sufficient funds are available to make timely replacements of capital items or major maintenance items in the manner contemplated in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. and/or the PCAPCAAssessment of the Property's physical condition and historical operation. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must not use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to reimburse the BorrowerBorrowerPerson who is the obligor per the Note. for any item specifically identified for reimbursement as a Completion/RepairCompletion/RepairRepairs or capital item replacements and deferred maintenance: identified per the Property Condition Assessment; and required per the Completion/Repair Schedule, or Completion/Repair Agreement. , or for any routine maintenance item, routine repair, or cosmetic repair that would normally be characterized as an operating expense. Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds must never be used for P&IP&IPrincipal and interest , T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. , or any other purpose not specifically permitted by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , or the GuideGuideMultifamily Selling and Servicing Guide controlling all Lender and Servicer requirements unless a Lender Contract specifies otherwise. .
| 408.04J | |
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1. General
The Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specify the frequency, timing, and size of disbursements from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. .
2. Required Documentation
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition must be in writing and specify, at a minimum:
- the specific capital item replaced or major maintenance items for which reimbursement is being sought, and if any item is not specifically identified in the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , an explanation of why the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds should be released for the item;
- the quantity and price of each type of capital item replaced (e.g., refrigerators);
- the quantity and price of all materials or parts (grouped by type or category) purchased; and
- the cost of all contracted labor or other services.
Each BorrowerBorrowerPerson who is the obligor per the Note. requisition submitted to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the capital item replacements or major maintenance items covered by the requisition have been completed in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; and
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
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- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence;
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
3. Disbursement of Funds
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may release funds to the BorrowerBorrowerPerson who is the obligor per the Note. only if all required documentation is received, and all applicable release conditions have been met, including, but not limited to:
- all capital item replacements or major maintenance items covered by the requisition have been completed in a good and workmanlike manner;
- all related invoices for capital items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. for issuance of a joint check, made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds;
- no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .
The amount disbursed to the BorrowerBorrowerPerson who is the obligor per the Note. must not exceed the actual cost of the capital item replacements or major maintenance items covered by the Borrower’sBorrower’sPerson who is the obligor per the Note. requisition.
4. Maintenance of Servicing File
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that the action taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. requisition for funds from the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. is appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
| 408.04K | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may use its discretion in deciding whether to conduct an on-site inspection before approving any specific requisition for Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds. If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to perform an on-site inspection when a requisition is submitted, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect all capital item replacements or maintenance items covered by the requisition during its next scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection and confirm the satisfactory completion.
| 408.04L | |
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If the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. permit, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may collect and retain:
- a reasonable fee to cover the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. routine costs of administering the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. ; and
- additional fees to cover:
- reasonable inspection costs, including the fees of any qualified professional used by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. ; and
- any other reasonable costs incurred in connection with collecting, holding, investing, or disbursing Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds but which are not adequately covered by the general administrative fees collected from the BorrowerBorrowerPerson who is the obligor per the Note. .
Subject to the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. a reasonable fee for any special inspection services provided in connection with a Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. requisition; however, no fee may be charged if such inspection is made as part of a regularly scheduled PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection.
Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds, including any interest, may not be used to cover fees due to the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. unless:
- the Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. specifically permits the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. to use Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds to pay ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. inspection fees; or
- the BorrowerBorrowerPerson who is the obligor per the Note. otherwise agrees in writing.
| 408.04M | |
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1. Notification of Default to Fannie Mae
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must immediately submit a Non-Monetary Default Borrower Request in the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. for any Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. default.
2. No Release of Funds to Borrower
No funds may be released to the BorrowerBorrowerPerson who is the obligor per the Note. while the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. is in default.
No later than 30 days after the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. is paid in full, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must refund to the BorrowerBorrowerPerson who is the obligor per the Note. all remaining Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funds.
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may amend existing the Schedule 5 to Multifamily Loan AgreementMultifamily Loan AgreementAgreement evidencing Mortgage Loan terms using Form 6001 series Loan Documents, or another Fannie Mae-approved form. - Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… on Fannie Mae’s behalf to match the alternative Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. funding available for newly originated Mortgage LoansMortgage LoansMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or a mortgage debt obligation with a Fannie Mae credit enhancement. if the BorrowerBorrowerPerson who is the obligor per the Note. has a history of adequate property maintenance, and no other concerns are present (e.g., declining PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). condition, declining rents, declining Net Cash FlowNet Cash FlowOn an annual basis or any specified period, the total Net Operating Income, minus the full amount underwritten for Replacement Reserve expense, regardless of whether deposits will be made (per Part II, Chapter 2: Valuation and Income, Section 203: Income Analysis and the applicable products and…). The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must send the executed Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. amendment revising the Replacement Reserve ScheduleReplacement Reserve ScheduleThe Required Replacement Schedule to the Multifamily Loan Agreement (Form 6001 series) and the applicable parts of the Multifamily Loan Agreement (or other agreement approved by Fannie Mae), that evidence the: Borrower’s agreement to replace identified capital items and perform required… or Replacement Reserve AgreementReplacement Reserve AgreementThe 4000 series Replacement Reserve and Security Agreement (Form 4606), or other agreement approved by Fannie Mae, that evidences the: Borrower’s agreement to replace identified capital items and perform required maintenance; terms for funding the identified capital item replacement and… to Multifamily Certification and CustodyMultifamily Certification and CustodyTeam responsible for taking custody of and certifying Mortgage Loans that can be contacted at [email protected], (800) 940-4646, or for submissions: Fannie Mae (Multifamily) Certification and Custody 21240 Ridgetop Circle Suite 125-130 Sterling, VA 20166. within 15 Business DaysBusiness DaysAny day other than a Saturday, Sunday, day when Fannie Mae is closed, day when the Federal Reserve Bank of New York is closed, or for any MBS and required remittance withdrawal, day when the Federal Reserve Bank is closed in the district where any of the MBS funds are held. , and retain a copy in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .
The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is properly maintained on an ongoing basis. If the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). is not being properly maintained, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must reinstate monthly deposits to the Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. and the reimbursement requisition process.