414.04

Required Casualty Loss Property Inspection

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must inspect the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , take photographs of the damage, and complete a Multifamily Catastrophic Loss Inspection (Form 4261) if:

  • the casualty loss is expected to exceed the lesser of (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance of the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. as of the date of the casualty; or
  • any of the following conditions exists:
    • a default has occurred and is continuing under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ;
    • the combination of insurance proceeds and BorrowerBorrowerPerson who is the obligor per the Note. funds is insufficient to complete the necessary PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). repairs for restoration to a condition fit for human habitation and meeting all applicable permitting requirements;
    • prior to the commencement of any restoration work, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that, upon completion of the repair and restoration work, the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). will not be capable of generating sufficient income to cover all operating expenses, required Replacement ReserveReplacement ReserveCustodial Account the Borrower funds during the Mortgage Loan term for Replacements. deposits, P&IP&IPrincipal and interest on the Mortgage LoanMortgage LoanMortgage debt obligation evidenced, or when made will be evidenced, by the Loan Documents, or  a mortgage debt obligation with a Fannie Mae credit enhancement. , and required payments on any subordinate debt secured by the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , or will not otherwise meet a DSCRDSCROn an annual basis or any specified period, the ratio of Net Cash Flow to the total of:  principal, interest, and required Mezzanine Financing or Hard Preferred Equity payments. or other test required by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. ; or
    • the repair and restoration work will not be completed by the earlier of (i) the Maturity DateMaturity DateDate all Mortgage Loan amounts become fully due and payable per the Loan Documents. , or (ii) within 1 year from the date of the casualty.

The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. may charge the BorrowerBorrowerPerson who is the obligor per the Note. for the cost of the inspection unless expressly prohibited by the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. .

An inspection by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. is optional if the casualty loss is expected to be less than (i) $500,000, or (ii) 20% of the UPBUPBUnpaid Principal Balance , and none of the above conditions exist.  If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. elects not to inspect the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). , the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must confirm during the next PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). inspection, and document in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. , that the repair and restoration work was satisfactorily completed.  If the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that the repair or restoration work was not satisfactorily completed, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must notify Multifamily InspectionsMultifamily InspectionsTeam that can be contacted at [email protected].  and Multifamily Loss MitigationMultifamily Loss MitigationTeam that can be contacted at [email protected]. ) in writing, as required by Part V, Chapter 5: Surveillance.