414.12
Before disbursing funds, including the final disbursement, to the BorrowerBorrowerPerson who is the obligor per the Note. for each disbursement request, the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must be satisfied that:
- all repair and restoration work has been completed in a good and workmanlike manner and in accordance with any applicable plans and specifications, as evidenced by submissions from the BorrowerBorrowerPerson who is the obligor per the Note. and, if applicable, by the Servicer’sServicer’sPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. or a qualified professional’s inspection of the completed work;
- all related invoices for items and services have been paid, unless the BorrowerBorrowerPerson who is the obligor per the Note. has satisfied any applicable pre-conditions of the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639) for issuance of a joint check made payable to the BorrowerBorrowerPerson who is the obligor per the Note. and the PersonPersonLegal person, including an individual, estate, trust, corporation, partnership, limited liability company, financial institution, joint venture, association, or other organization or entity (whether governmental or private). owed funds;
- the necessary release of LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. or LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. waivers have been submitted by all contractors, and no mechanics’ LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , materialmen’s LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. , or other LiensLiensLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. are outstanding that have not been acceptably bonded over; and
- the BorrowerBorrowerPerson who is the obligor per the Note. is not in default under any Loan DocumentLoan DocumentAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including the Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12B | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must approve and disburse funds related to each BorrowerBorrowerPerson who is the obligor per the Note. request in accordance with the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639). Funds must be disbursed no more frequently than once a month, unless:
- the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. determines that more frequent disbursements of funds are appropriate and can be managed effectively; or
- the disbursement is equal to or greater than $10,000, or is the final disbursement of proceeds.
| 414.12C | |
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Each of the Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be in writing and must specify, at a minimum:
- the specific repair and restoration work for which reimbursement is being sought;
- the quantity and price of all materials (grouped by type or category) or specific replacement items (e.g., appliances) purchased; and
- the cost of all contracted labor or other services.
The Borrower’sBorrower’sPerson who is the obligor per the Note. disbursement requests must be accompanied by:
- a BorrowerBorrowerPerson who is the obligor per the Note. certification that the repair and restoration work was completed in a good and workmanlike manner, in accordance with any plans and specifications previously approved by the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. , and in compliance with all applicable laws, ordinances, rules, and regulations of any governmental authority, agency, or instrumentality having jurisdiction over the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ;
- if the invoice exceeds the lesser of $25,000 or 1% of the UPBUPBUnpaid Principal Balance
:
- a copy of the invoice detailing the covered materials, labor, or services;
- payment evidence; and
- a LienLienLien, mortgage, bond interest, pledge, security interest, charge, or encumbrance of any kind. release from each contractor, subcontractor, or materialman; and
- other relevant documentation required under the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639).
| 414.12D | |
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The amount of each disbursement (other than the final disbursement) may not exceed the lesser of:
(i) an amount equal to:
- the actual cost of the repair and restoration work covered by the disbursement request, or, if the work was done under a contract or subcontract pursuant to which other work remains to be done, an amount equal to 90% of the actual cost of the repair and restoration work covered by the disbursement request (i.e., a 10% holdback is required if the work under the applicable contract or subcontract has not been completed in full); plus
- 100% of the cost of any materials used, or to be used, in connection with the repair and restoration work, if at the time of the disbursement request, title to the materials has passed to the BorrowerBorrowerPerson who is the obligor per the Note. and the materials have been installed, or are being properly stored, on the PropertyPropertyMultifamily residential real estate securing the Mortgage Loan, including the fee simple or Leasehold interest, Improvements, and personal property (per the Uniform Commercial Code). ; or
(ii) an amount equal to the difference between:
- the balance of the Collateral Agreement Custodial AccountCollateral Agreement Custodial AccountCustodial account established by the Servicer for depositing funds received from the Borrower for Collateral Agreements. at the time of the disbursement request; and
- the estimated cost of all remaining repair and restoration work at that time of the disbursement request.
Upon satisfactory completion of all required repair and restoration work, and satisfaction of all other applicable conditions of the Loan DocumentsLoan DocumentsAll Fannie Mae-approved documents evidencing, securing, or guaranteeing the Mortgage Loan. , including any applicable Amendment to Multifamily Loan and Security Agreement (Restoration Reserve) (Form 6615) or Insurance Loss Proceeds Collateral Agreement (Form 6639), the ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must:
- disburse all remaining funds to the BorrowerBorrowerPerson who is the obligor per the Note. ; and
- submit through the MAMPMAMPMultifamily Asset Management Portal used to submit Property inspections, operating statements, requested modifications, asset management reports, and data corrections for loan or property attributes. a final Report of Multifamily Hazard Insurance Loss (Form 178) to indicate that all work was satisfactorily completed.
| 414.12F | |
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The ServicerServicerPrimary Person servicing the Mortgage Loan, including the originator, seller, or a third party. must ensure that all actions taken with respect to each BorrowerBorrowerPerson who is the obligor per the Note. disbursement request are appropriately documented in its Servicing FileServicing FileYour file for each Mortgage Loan serviced. .