Section 1804

Streamlined Underwriting

1804.01	Property Condition Assessment (PCA)

Guidance

You may use the Streamlined Physical Condition Assessment Requirements (Form 4099.A).

1804.02	Environmental Site Assessment

Requirements

A Phase I Environmental Site AssessmentPhase I Environmental Site AssessmentEnvironmental report and site assessment performed according to the process described in current ASTM E 1527, including any report summarizing the conclusions of the assessment. is not required if:

an Environmental Professional performs an environmental database review and identifies no
- potential environmental concerns (as defined in ASTMASTMAmerican Society for Testing Materials E1528 - Standard Practice for Limited Environmental Due Diligence: Transaction Screen), or
- adverse conditions requiring further due diligence;
the BorrowerBorrowerPerson who is the obligor per the Note. enters into an Environmental Indemnity Agreement (Form 6085); and
you confirm that the BorrowerBorrowerPerson who is the obligor per the Note. is appropriately implementing any existing O&M PlansO&M PlansWritten plan, document, or agreement containing ongoing operating, maintenance, or monitoring actions for the Property or its Improvements. for 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). .

1804.03	Survey

Requirements

Part II, Chapter 3: Legal Compliance, Section 305: Survey does not apply if the:

new mortgagee title insurance policy includes all title exceptions, including those that would appear based upon the most recent survey provided by the BorrowerBorrowerPerson who is the obligor per the Note. (whether it is the original survey for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. or a subsequent one);
BorrowerBorrowerPerson who is the obligor per the Note. certifies that there have been no changes or improvements 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). since the later of the date of the survey
- referenced in the original title policy, or
- most recently completed; 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). inspection report reveals no evidence of new construction or encroachments on the site from construction on adjoining properties.

1804.04	Borrower Structure and Experience

Requirements

You must:

Obtain a new Multifamily Underwriting CertificateMultifamily Underwriting CertificateMultifamily Underwriting Certificate (Form 6460 series) , and/or other agreement approved by Fannie Mae that provides underwriting information for a Mortgage Loan. (Form 6460 series) from the BorrowerBorrowerPerson who is the obligor per the Note. , any GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , and any Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. .
Obtain updated copies of the organizational documents of the BorrowerBorrowerPerson who is the obligor per the Note. and the Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. , and confirm that the Borrower’sBorrower’sPerson who is the obligor per the Note. organizational structure complies with Part II, Chapter 3: Legal Compliance.
Confirm that no unauthorized change has been made to the Borrower’sBorrower’sPerson who is the obligor per the Note. organizational structure or documents.
Obtain a new good standing certificate from the jurisdiction where the BorrowerBorrowerPerson who is the obligor per the Note. is organized.

1804.05	Borrower Credit

Requirements

You must obtain and review new financial statements for all parties relevant to the transaction.

For Small Mortgage LoansSmall Mortgage LoansMortgage Loan with an original loan amount less than or equal to $9 million. , you must:

confirm that the FICO scores of any such individuals comply with Part III, Chapter 9: Small Mortgage Loans, Section 911.02: FICO Scoring; and
ensure that the net worth and liquidity complies with Part III, Chapter 9: Small Mortgage Loans, Section 910.06: Net Worth and Liquid Assets.

Guidance

If the BorrowerBorrowerPerson who is the obligor per the Note. or any Key PrincipalKey PrincipalAny Person who controls and/or manages the Borrower or the Property, is critical to the successful operation and management of the Borrower and the Property, and who may be required to provide a Guaranty. , GuarantorGuarantorKey Principal or other Person executing a Payment Guaranty, Non-Recourse Guaranty, or any other Mortgage Loan guaranty. , or PrincipalPrincipalPerson who owns or controls specified interests in the Borrower per Part I, Chapter 3: Borrower, Guarantor, Key Principals, and Principals, Section 303: Key Principals, Principals, and Guarantors. submitted financial statements within the past 12 months, then in lieu of new financial statements, you may accept a certification that there has been no material adverse change from the financial condition or credit standing reflected in the financial statements.

1804.06	Property Management

Guidance

You may elect not to review 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). management or agreement per Part II, Chapter 1: Attributes and Characteristics, Section 112: Property Management and Agreement.

1804.07	Replacement Reserve

Requirements

You must ensure the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. is funded as follows:

If...	Then...
The Property is located in a Pre-Review Market that is not eligible for delegation at any Tier per Section II of the Form 4660, and the market was a Pre-Review Market when the Portfolio Mortgage Loan was originated.	The BorrowerBorrowerPerson who is the obligor per the Note. must fully fund the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. .
The Property is located in a Pre-Review Market that is not eligible for delegation at any Tier per Section II of the Form 4660, but the market was not a Pre-Review Market when the Portfolio Mortgage Loan was originated.	You must determine the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. funding per Part II, Chapter 4: Inspections and Reserves, Section 404: Replacement Reserve.
The Property is located in a Strong Market, a Nationwide Market, or a Pre-Review Market that is eligible for Tier 3 and Tier 4 Mortgage Loans on a delegated basis per Section II of the Form 4660.	You must determine the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. funding per Part II, Chapter 4: Inspections and Reserves, Section 404: Replacement Reserve.

If...

Then...

The Property

is located in a Pre-Review Market that is not eligible for delegation at any Tier per Section II of the Form 4660, and
the market was a Pre-Review Market when the Portfolio Mortgage Loan was originated.

The BorrowerBorrowerPerson who is the obligor per the Note. must fully fund the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. .

The Property

is located in a Pre-Review Market that is not eligible for delegation at any Tier per Section II of the Form 4660, but
the market was not a Pre-Review Market when the Portfolio Mortgage Loan was originated.

You must determine the Replacement ReserveReplacement ReserveCustodial Account funded during the Mortgage Loan term for major maintenance and replacing capital items per the Loan Documents. funding per Part II, Chapter 4: Inspections and Reserves, Section 404: Replacement Reserve.

The Property is located in

a Strong Market,
a Nationwide Market, or
a Pre-Review Market that is eligible for Tier 3 and Tier 4 Mortgage Loans on a delegated basis per Section II of the Form 4660.

1804.08	Real Estate Tax and Insurance Escrows

Requirements

You must require T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow deposits for a TierTierTier 1, Tier 2, Tier 3, or Tier 4 per the Multifamily Underwriting Standards (Form 4660). 2 Choice Refinance LoanChoice Refinance LoanMortgage Loan refinancing a Portfolio Mortgage Loan using streamlined underwriting per Part III, Chapter 18: Choice Refinance Loans. unless Fannie Mae waived the T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow for the Portfolio Mortgage LoanPortfolio Mortgage LoanMortgage Loan purchased by Fannie Mae and held as of a certain date regardless of whether it is a Cash Mortgage Loan or an MBS Mortgage Loan. . If you do not require T&IT&ITaxes or assessments that may become a Lien on the Property and insurance premiums. escrow deposits, then you must comply with Part II, Chapter 4: Inspections and Reserves, Section 405: Escrow Requirements for Taxes and Insurance.